Very recently, War Room members took advantage of a dip in gold prices by adding to our recommended position in microcap gold stock Americas Gold and Silver (NYSE: USAS).
Microcap stocks trade differently from small cap, midcap or large cap stocks. These stocks are not followed as broadly, usually have smaller floats (tradable shares) and tend to make outsized moves.
Microcaps are usually very speculative stocks that act as great trading vehicles. Americas Gold and Silver is a little different…
First, it’s a company that produces gold and silver.
Second, it’s well-capitalized thanks to outside partnerships and has an investor following that provides it with good liquidity. Liquidity is very important, as it reflects the ease with which we can get in and out of a trade.
On September 27, I wrote this to War Room members about Americas Gold and Silver:
This is a microcap gold stock. It has a tight float. That is one reason why you MUST use limit orders for this play. It will go up and down with the price of gold, but it will likely outperform on the upside and get hammered harder on the downside. But trying to predict a bottom in the stock is not a worthwhile endeavor, as there are major players involved in the stock (Eric Sprott has invested more than $30 million in the company in the past three months – if you don’t know who he is, please do a Google search). We are now buying it at prices less than he paid. I am good with that. It will have several catalysts in the coming months as well from new operations coming online. This is a very SPECULATIVE play, so position size accordingly. BUY Americas Gold and Silver (NYSE: USAS) for $2.70 or lower, GOOD FOR THE DAY.
Last week, members took profits on the position as the shares jumped up to $3.30.
The best part about the Americas Gold and Silver trade was that everyone was able to get in and out at our recommended price – a testament to the liquidity in the situation.
Action Plan: Americas Gold and Silver also established a nice trading channel that we will exploit for future trades in the shares.
In The War Room, we look for opportunities wherever we can find them, from options and stocks to exchange-traded funds – you name it. Join me in The War Room now so you don’t miss the next trade!