"Stock-picking will play an increasingly important role in separating winning investors from those trailing the market in 2021..."
--Business Insider, Nov 16, 2020
COVID has created the perfect market for savvy stock pickers. In fact, some of my readers have already been rewarded with an insane 519% gain from DRD Gold, 330% from Jubilee and tallying up our closed portfolio at Jan 2021, we’ve generated average gains of 64% across a portfolio of 13 stocks.
We’re on the hunt for more. Care to join us…?
I’ve been picking stocks long enough to see recurring patterns.
And if what I’m seeing right now is correct, 2021 will be a a super year for small cap enthusiasts.
I’d like to show you why in a moment.
And, if you can see the opportunity, I’ll give you MY TOP FIVE PICKS .
It’s Red Hot Penny Shares analyst, Francois Joubert here.
I’m writing to you today to illustrate how history repeats itself in the stockmarket.
Specifically, I’m going to share with you the track record since launch of our flagship publication, Red Hot Penny Shares.
It’s the research advisory we began back in 2001 — back when the rand crashed to R13.86 to the dollar.
Our goal was to put penny stocks on the map for a small group of like-minded speculative investors, eager to take a risk in exchange for large rewards.
After all, we wanted to capitalise at the bottom end of the JSE where institutional investors feared to tread. Looking to capture the minnows of the JSE, before they took off.
In our first issue back in 2001 the editor at the time made this opening declaration:
Always remember that volatility brings opportunity and, with it, profitability and wealth.
This is a world of financial hostility, where maneuvering within rapidly changing political and business environments are daily occurrences. But it is an exciting one — and need I say, a highly profitable one. This is the world I want to make yours too.
And it’s been quite the stock-picking journey.
Red Hot Penny Shares has helped readers capitalise since 2001, taking advantage of every small-cap boom along the way.
(African Dawn — SOLD 1,117%. DRD Gold — SOLD 519%. Pan Af — SOLD 270% November 2013. Pan Af — SOLD 274% August 2020. All Joy — SOLD 354%. Santova — SOLD 221%.)
We also leveraged the great resources boom between 2008 and 2011. Highlights there were Coal of Africa’s historical rise from 515 cents to 2975 cents in just 15 months… Sanyati’s 208% surge in 12 months… and Esor’s rise of 167% in 12 months.
Occasionally, Red Hot Penny Shares discoveries that were complete nobodies on the day of recommendation…evolved into household names by the time we sold.
AfDawn (a gain of 1117%) and DRD Gold (519%) are two great multi bagger examples. It’s rare. But it happens with experience (and a bit of luck thrown in, too!)
Most recently, we helped subscribers clock an eye-watering 102% on an 8-month trade on Quantum Holdings.
That kind of quick win is the stuff small-cap dreams are made of.
Right now, we have multiple holdings in the portfolio that are thriving — even as we wade through the next covid flood.
That’s the beauty of this kind of investing.
Get your stock picking on track, stick to a strict stoploss strategy, and it doesn’t matter how volatile the markets are.
Because you can STILL find these kind of gains we’ve talked about above, knowing what SA has gone through in the last 2 decades.
Of course, I’m not going to sugar coat the ride we have had, there have been losses and poor choices in our 20-year history, too.
We have a number of losers in the current portfolio, one of the biggest being CSG.
R1,000 into that recommendation would now be worth R300.
That’s not what we want.
But as stock pickers — especially SMALL-CAP stock pickers — we know that’s just how this game is played.
These stocks are small and volatile.
You try to cap your losses with a trailing stop-loss strategy. But you also don’t want to exit a stock at a 40% loss…only for your initial research to be proven correct, and have it jump 2,000% after you’ve sold.
That’s the art of small-cap stock picking.
The aim is to ensure a profit irrespective of our win rate
Overall, Red Hot Penny Shares is killing it in these unpredictable conditions.
The average gain across all sold stocks since Jan 2020…that’s 13 sells in total…including the losers…is 64%.
And as chief analyst for FSPInvest, I can tell you that is a great track record.
Of course, this is a sales letter and you may think that I’m only telling you our best years performance…
But that’s not the case as I’ll illustrate for you below…
Yes, near the end, I’ll invite you to subscribe to Red Hot Penny Shares.
It’s as low as R870 for an annual subscription.
(With the first 30 days to get that R870 refunded, if you choose to.)
But, this sales letter is a little different…
- 1. You’ll see why we believe this is a STOCK PICKER’S MARKET and I’ll pinpoint in this letter how you can take advantage with or without me.
- 2. And, I’ll share with you some key lessons I’ve learned about successful small-cap investing in South Africa over the last 20 years.
Now let’s get back to why 2020 is not just a once off hit for
Red Hot Penny Shares…
You see we’ve been here once before.
VERY similar conditions.
Conditions we fed off to string together the most impressive series of wins in this publication’s history.
Over the course of a single year, we made a series of fearless punts on 26 tiny companies.
The results: 27 winners. Just two losers.
Average gain across the winners: 143%.
Average gain overall, including the losers: 112%.
That is SOME portfolio…
And this all happened in 2007!
Now, there are a lot of similarities to the market now and back then, like stimulus packages, freefall economies and low interest rates but with one significant difference — No Pandemic!
But if there’s one thing that is true to both these markets… it’s ripe for stock picking if you know where to look.
Like I said you learn to recognise when a pattern is repeating and being a longtime investor, I'm able to spot the nuances of the market and like Buffett said:
You have to turn over a lot of rocks to find those little anomalies
In this letter, I’ll share a few of my best small-cap trade secrets with you.
And, I’d also like to share with you five stocks I believe carry potential to double in 2021.
An overlooked small-cap backed by one of South Africa’s richest families…a little known JSE penny stock set to plunder the cannabis market and my #1 pandemic recovery share that could make you 5 times your initial investment…
These five 2021 plays are TRULY special.
I’ll show you what I mean in a moment.
First let me explain a 'stock picker’s market'?
There are certain moments in history where the odds fall into the individual stock picker’s favour.
Hence the term 'stock picker’s market'.
Strategists at Morgan Stanley say, "2021 will be much more about stock picking".
And I agree :
You CAN outperform the market by massive margins picking stocks who have the best underlying growth potential that the market has just not priced in yet — or in the case of the current market has not yet repriced.
I know this because I’ve been helping many subscribers do it for years
Instead of slotting up a few double-digit gains in a six-month period...you’re suddenly nailing triple- and quadruple-baggers...and your win-loss ratio leaps higher.
I believe we’re in such a window now.
And that’s why I’m writing to you.
I am the current custodian and editor of Red Hot Penny Shares.
And I believe:
That this stock picking paradise is the upside of the pandemic.
It’s in the markets of 2006 to 2008 that my fortunes were made and it propelled me into the stock picker I am today!
And now it’s your turn to take part if you’d like…
Believe me, it’s much easier to sift out big small-cap winners when everything is going all over the place.
The last time stocks were all over the place like this was back in 2007.
All in all...RHP recommended 29 stocks over that time period...and they made AN AVERAGE GAIN OF 112%.
Where your average gains are FIVE TIMES HIGHER than the passive indices.
You simply don’t often see that.
Even more impressive was the win-loss ratio.
27 winners. Just 2 losers.
That’s virtually unheard of in a portfolio of over two dozen small-caps.
In normal times, you’re lucky if you get 50/50!
Of course, don’t forget there were trading costs to subtract there. And taxes to take into account on any banked gains.
But the point is, this was all done in the lead up to the global financial crisis.
Now we find ourselves in the midst of another crisis.
COVID-19, has fundamentally changed the world we live in.
But, in doing so, I believe it has created, for the first time in just over a decade.
ANOTHER STOCK PICKER’S MARKET
It doesn’t happen often as I’ve shown..
But when it does, it makes it much easier to cherry pick the winners from the losers.
If you’re keen to join us for a second go at this, let’s get going.
How do you go about picking stocks in a stock picker’s market?
Here are some lessons learned…
STOCK-PICKING LESSON #1:
Multi-baggers come from targeting
future HOUSEHOLD NAMES
This year, we sold two massive ‘bagger’ gains.
A multi-bagger stock is one that gives you a return of more than 100%.
A five-bagger is a 500% gain. And a 10-bagger is a 1,000% gain.
These are what we aim for.
We don’t get them often. Like I said, they are hard to find.
It’s just that a stock picker’s market makes them SLIGHTLY easier to identify.
Small-caps are by far some of the riskiest investments you can ever make.
And you CAN conceivably lose 100% of your investment if a small-cap play completely implodes.
Thankfully, that’s never happened to our readers.
But I have learned over the years to try and seek out that X-factor.
Just like DRD Gold…
What a story.
DRD Gold does reclamation of old gold dumps on the witwatersrand. It’s not a glorious kind of business, in fact — most mining companies simply can't wait to get rid of their old mine dumps.
But DRD saw this as an opportunity…
Back in January 2019 DRD’s share price had been in a slump for around 3 years. It had spent a lot of money acquiring additional mine dumps, and building a new plant to process all the materials. It had been years of expenses — with no extra income.
But my research uncovered that DRD would shortly see a huge boost in gold production from these old dumps — and I was bullish on the gold price as well.
So, in June 2019 I recommended my readers buy DRD Gold at 265c a share and hang onto their investment for 12 months to double their money.
Just look at the chart below to see what happened next:
Sure enough, by May 2020 DRD share price shot up to 1577c a share — and my readers bagged a 519% gain plus some dividends!
That’s FIVE times their Money in just 11 months!
STOCK-PICKING LESSON #2:
Look for stocks with ‘COVID immunity’
The star attraction of small-caps is, if you find the right ones, you can get paid even if the wider market is taking a beating.
Quantum Food Holdings is a little-known food producer. Its focus is specifically on egg production and broiler chicks for other poultry producers.
Back in January 2020 Quantum‘s price looked pretty flat and unexciting. It remained between 300c and 400c for the first six months of 2020. Not many investors were interested in this little company with big potential…
But I saw that it was GROSSLY undervalued compared to other producers…
So, in January 2020 I recommended my readers buy Quantum Foods at 360c a share and hang onto their investment for 12 months in anticipation of a 102% gain.
Just look at the chart below to see what happened next:
Our Quantum pick, was immune to the market chaos. In fact it actually benefitted as demand rose for its product thanks to shortages created by covid.
Sure enough, by August 2020 Quantum’s share price shot up to 730c a share — and my readers bagged a 102% gain plus some dividends!
That’s Double their Money in just 8 months!
The point is: It’s possible to find small-caps that rise to the surface and ride high, no matter what’s going on everywhere else.
STOCK-PICKING LESSON #3:
Picking your SELLS is almost more
important than picking your buys
Remember the DRD Gold story I was telling you about?
The stock that rose 519% after we tipped it?
Well, there’s a downside to that story.
We hit the eject button too early.
The gain we sold for, 519%, is still one for the record books.
But DRD Gold kept rising after we exited.
My reasoning at the time was sound.
DRD Gold had become everyone’s favourite. It had made us a tremendous gain for a stock held for just 11 months.
I felt the value of DRD Gold was pretty much priced in. And it was time to realise those profits and exit the position.
I even warned readers 'the stock may continue higher'.
I just didn’t expect it would still go up another 200%.
But that’s what makes small cap investing truly special…
If YOU owned DRD Gold from the get go…and you see, day by day, the sudden uptick in coverage propel a stock price from cents to rands… it’s a euphoric feeling that’s very hard to describe!
Don’t take my word for it, though.
Why don’t you join us and experience for yourself this stock picker’s market?
I invite you to take an R870 annual subscription to Red Hot Penny Shares today.
Again, this comes with our usual 30-day 'get-out clause'.
Meaning you can get a full refund of that R870 within the first 30 days.
Pretty decent deal.
Especially considering you’ll receive instant access to three just-published reports:
Five small caps stocks I expect to double in 2021; The Investor’s Toolkit
And: A Beginner’s Guide to how to buy and sell penny stocks for profit!
The five stocks profiled in the first report are our main picks for 2021.
They’re getting very little coverage at the moment. I reckon very few people are reading their statements other than me.
Read the reports.
Do your your own research.
Go through the the Red Hot Penny Shares archive.
Study the current portfolio and all the active buy recommendations.
Then make the call.
You can either stick around for the ride. Or request a full refund in the first 30 days.
Of course, this kind of action isn’t for everyone.
Even when you’re in a stock picker’s market.
Even the pro investors tread super carefully with small-caps.
And THAT leads me to your fourth small-cap stock-picking lesson…
STOCK-PICKING LESSON #4:
Use your ‘little guy advantage’
Small-caps are often simply way too small for big fund managers to get into and out of with ease. They simply have too much money to invest. There are SOME dedicated small-cap funds out there, but they’re in the extreme minority.
So, which little companies
are we targeting for 2021?
Here is a snapshot of what’s getting me excited about 2021. You’ll learn the full details of these five small caps in your first special report, which you can claim today.
Why cannabis could easily become as lucrative as Scotch is to Scotland!
Did you know the Scotch Whisky industry makes Scotland around as much money as the entire platinum mining industry makes in South Africa.
That’s if you combine its contributions from whisky exports and tourism!
Now what if I told you Africa could soon get a very big boost to its economies on the same scale as Scotch to Scotland… Most probably even bigger!
What am I talking about?
Cannabis of course.
You see, according to the latest estimates, the cannabis market will grow from being worth only $10 billion in 2018 to around $40 billion by 2023!
And consulting company, Prohibition Partners estimates the South African domestic market for CBD products will be worth R27 billion by 2023 as well!
Now I’ve uncovered a little known JSE listed company that owns growing facilities and extraction labs for Cannabis in Lesotho.
What’s more — the company just secured supply agreements for its CBD products to both Asia and Europe to the value of around R1.7 billion in the next two years. This is massive — especially since the company only reported R40 billion in revenue back in February 2020!’
Stand by to double your money… or more in the coming months!
A R9 stock at less than R2?
Read on to find out why I expect the share price to soar
This company has gone from a R7 million loss to a R70 million profit, but the share price is down 78% from its high?
So, what happened…
Weeks after listing at R5, the company’s share price hit R9…
While this niche business is a great company, the growth in share price exceeded its profit expectation in the short term. As a result, it was seriously over-valued.
Its share price then plunged to 195c!
Simply put — the share price ran ahead of the business.
Today the company’s latest full year profit came in around R70 million.
So now, the company is cheap, and SUPER attractive compared to a couple of years ago.
In fact, right now its market value is lower than all the money it has invested into new developments since 2016!
All in all this company fits the criteria for strong growth and selection to my Double your Money Playbook for 2021.
My #1 Property Share for 2021!
Get hold of SAs largest property portfolio — at a 54% discount and you could net as much as 119% gains!
While everyone has run for the hills when it comes to property stocks, I’m saying now is the time to get back in.
But you have to know which ones to buy into!
This particular property business had a market value of R52 billion in 2019.
Today, it’s sitting at R18 billion having dropped a whopping 65% thanks to Covid.
Yet the company’s debt levels are down.
Its streamlined operations and revenue levels have remained intact.
Simply put — you can get hold of a world class business right now, at a third of the price…
There’s as much as 119% upside potential on the cards in this one!
Now you can double your money on this grudge purchase in 2021!?
You’re probably thinking how is that even possible, so let me explain.
There’s a list of things we all need every day to survive.
Water, food and ideally a roof over our head…
Now if you live in South Africa there’s another essential expense linked to how we live.
And that’s called…
We all need security round our homes. Burglar proofing and security gates are crucial as the crime rate spirals. And that’s what makes this little JSE company such a great buy…
In the months since the hard lockdown, it has seen sales boom.
In fact, it generated R15 million in cash resources in its first two months. That’s R90 million on an annualised basis.
To put that in context — its full market value is only R260 million right now. So, it generates more than a third of its total value in cash, in a bad year.
The truth is, I expect it could generate R100 million+ in the coming year.
That’s because this share is what I call a Double Dipper!
Not only do I expect massive growth in its share price, it’s also set to pay out 10% in dividends.
When you add in the share price growth I’m expecting, you’ll be double dipping to the tune of 121% return on your money in a matter of 12 months.
How does a 127% gain from a stock with almost NO downside risk sound?
In fact, the richest family in South Africa has committed to buying its shares at a certain level…
No matter what!
I expect they might even step in, acquire and de-list this company. If they do — there’s a tidy 127% gains on the cards.
This is one for the speculators but it could be a sweet double your money deal if you have the nerve to take the punt!
As I have said, a stock-picking market is by no means a safer market.
None of these are anywhere near sure bets.
With all these weird distortions that send small-caps flying all over the place.
Stimulus distortions like central bank money printing.
Low interest rate distortions.
And the ultimate distortion of a once-in-a-century pandemic.
You can come unstuck in the
So, if the thought of making an investment and watching it go down in a matter of months (or even days if things get really hairy) leaves you cold, you shouldn’t buy these stocks.
But if you have a small bit of capital you’re willing to put on the line in the hope of spinning it into R20,000, R35,000, or even more — these are probably your best options on the entire South African market at this time.
But they could also tank.
Those are the rules of this game.
So, by now you’re either in or you’re out.
R870 for a whole year of recommendations.
30 days to get that transferred straight back to you, if you so desire.
You can even download and keep your three reports…
Five Small Caps Stocks I Expect to Double in 2021; The Investor’s Toolkit
And: A Beginner’s Guide to How to Buy and Sell Penny Stocks for Profit!
…and then refund.
Have my best ideas for the year ahead, and still not be out-of-pocket
That’s kind of crazy from a financial publishing perspective.
But hopefully it shows you how confident I am that, once you get a closer look at Red Hot Penny Shares, you’ll want to stick around.
If you’re not satisfied, just ask for a refund in that first month.
You’ll have gained access to all of my current holdings, plus my five bounce back recommendations for 2021.
You can get all that, and, if you’re still not quite at ease with the whole thing, request a refund.
I honestly don’t mind if you do this.
I wouldn’t want you to feel compelled to stay on if you suspected this might be a little too risky…or if you think the financial uncertainty around the pandemic makes it imprudent for you to be punting on small-caps.
Stock picking is for the BRAVE ONLY.
It always is…but especially so right now.
R870 will get you one brand-new share tip in each monthly issue for a year.
I will tell you what I believe the risks and rewards are, when to get in, and what I think is a realistic target price.
PLUS, I’ll tell you what action to take on your existing shares, whether to buy more, sell completely, take a portion of profits, or hold your position for the time being.
I will also send you a weekly email update, where I pass on time-sensitive tips, developments or changes to your holdings with the COVID crisis in mind, plus any ‘market whispers' that might affect your share tips.
R870 is nothing for all that.
As the chief analyst of South Africa’s leading independent financial publisher, I can tell you right now that, rand for rand…
This is among the best small-cap research in South Africa
And man, if you’re EVER going to try your hand at this game, NOW IS THE TIME!!!
Both I am absolutely sure these conditions are only going to intensify in 2021.
That makes this arena even more risky.
REMEMBER: An ‘Upside Down’ stock picker’s market means some small-caps can get obliterated.
But OTHER small-caps can rise thousands of per cent at the same time.
I have my five top stock picks for 2021 ready and waiting for you.
You’ve got a 30-day window for a full refund, if you decide it’s a bit risky for your blood. (If you want, you can ‘paper-trade’ those first five picks in that 30-day window.)
Click on the big ‘SUBSCRIBE NOW’ link below. You’ll be taken to a secure order form where you fill in a few details. As soon as that’s processed, you’ll get the official welcome email with your first five picks.
Francois Joubert Editor,
Red Hot Penny Shares
SOME QUESTIONS YOU MIGHT HAVE
What will you send me?
First off, you’ll get instant access to three just-published reports.
Five Small Caps Stocks I expect to Double in 2021;
The Investor’s Toolkit
A Beginner’s Guide to How to Buy and Sell Penny Stocks for Profit!
You’ll then be handed the ‘keys’ to the entire Red Hot Penny Shares archive. All of our previous share tip reports and our current buy recommendations can be found there.
You can get all that, and, if you’re still not quite at ease with the whole thing, request a refund within 30 days.
From there, you’ll receive a new issue and stock recommendation (occasionally two) per month. I will tell you what I believe the risks and rewards are, when to get in, and what I think is a realistic target price.
PLUS, I’ll tell you what action to take on your existing shares, whether to buy more, sell completely, take a portion of profits, or hold your position for the time being.
I will also send you a weekly email update, where I pass on time-sensitive tips, developments or changes to your holdings with the COVID crisis in mind, plus any market whispers.
Is this a scam?
No. Red Hot Penny Shares has a proud history dating back to May 2001.
No financial publication could have anywhere near that longevity if it was a scam. The FSB would have closed it down long ago.
We started out as part of a publishing group that’s been around since 1979. And became independent in 2018.
Some people will no doubt be wondering if RHP is a 'pump and dump' scheme…or whether I am 'front-running' stocks.
No. Absolutely not.
It is completely against the rules for me, or anyone at FSP Invest, to invest in any of the companies at the time of recommendation and if I do have an interest in one of the stocks then I will make sure I declare that to you.
We get that people are sceptical. If you are, please read the newsletter over the next month as part of your subscription.
You’ll quickly see that this is the real deal.
What guarantees can you offer me?
No one can guarantee you success in the markets. If someone offers you this, run a mile. There are no guarantees with any form of investing. No one can see the future. Small-cap stocks are high-risk.
You could lose money. Be sure you’re comfortable with that. If you want to be in the running to make big money from the winners, you have to be comfortable with that risk.
The stock market is uncertain. That’s because LIFE is uncertain. No one can see the future. That’s why you should never invest more than you can safely afford to lose.
All we can do is provide the best defence against that uncertainty: Meticulous research.
Of course, I can guarantee you that if you don’t like what you see, for any reason, you can walk away with a full refund of your subscription cost any time in your first 30 days.
What are the risks?
All stock market investing involves risk. There’s no point avoiding that. And anyone who tells you otherwise isn’t being honest with you.
A stock picker’s market is a very risky market.
Because the winners can be bigger than normal. But the losers can be bigger than normal too.
The specific risks involved with this kind of approach depend on exactly what stock opportunity I find. This varies depending on exactly what theme he’s I'm looking at. But I will always highlight the risks along with each recommendation.
My only brief is to find stocks with really big gain potential. That means small caps. You should know they tend to be much riskier than blue-chips because they are hyper-sensitive to news and announcements.
The value of these stocks can jump up rapidly, but can fall back just as rapidly.
In other words, never invest more than you could comfortably afford to lose on any one recommendation.
What if I get stuck?
First of all, don’t panic!
Second of all, read the report How to Buy and Sell Penny Shares for Profit.
That contains a whole bunch of great content that will help you in many areas of small-cap investing. Practical stuff that even experienced small-cap investors should find useful.
When you join Red Hot Penny Shares , you’ll also receive phone access to our member services team, plus access to our facebook page through which you can ask questions related to your subscription (although we can’t give personal investment advice).
Be clear: I want this to work for you. I want you to make a ton of money from my research advisory recommendations.
And I want our service to be easy for you to follow, so that it doesn’t take up too much of your time — or fill your head with stress — every time you buy a stock.
Ready to get started?
Click the link!
(You can review your order before it’s final)