Even though you could lose your entire investment trading in penny stocks, they could also offer significant opportunities for the astute person. Anyone looking to trade or invest in these low-value stocks should definitely plan on performing their due diligence by thoroughly researching any penny stock before committing their funds.
Buying penny stocks requires care since they are generally cheap for a reason. For example, they might be issued by a company that is insolvent, filing for bankruptcy or embroiled in a costly lawsuit. Penny stocks also often suffer from substantial liquidity issues that can make them more difficult to trade than listed stocks with higher market capitalizations. Despite such risks, some penny stock companies do manage to make spectacular turnarounds and can wind up being extremely profitable investments for people who bought their stock near the bottom when its outlook looked gloomiest.
If you’ve recently considered trading or investing in Healthier Choices Management Corp. (OTCMKTS: HCMC) stock, then keep reading to find out how to buy stocks like HCMC and how much of a risk investing in this particular penny stock represents. You’ll also find out if HCMC stock might make a good fit for your portfolio or as a vehicle for speculation, as well as the best brokers to execute your penny stock trades through.
How to Buy Healthier Choices Management Corp. Stock
Healthier Choices Management Corp. is a holding company based in Hollywood, Florida, that was founded in 1985 by Jeffrey Holman. HCMC claims to provide consumers with healthier alternatives to typical lifestyle choices.
HCMC was formerly known as Vapor Corp. before changing its name to Healthier Choices Management Corp. in 2017. The company’s Vapor segment provides vaporizers, e-liquids and related products.
Its subsidiaries Healthier Choice Markets and Healthier Choice Markets 2 own two Ada’s Natural Markets in the Fort Lauderdale and Fort Myers, Florida areas. In addition, the company owns three Paradise Health and Nutrition locations in the Melbourne, Florida area.
These stores provide their respective communities with all-natural and organic products, as well as traditional grocery items. HCMC’s grocery segment offers fresh produce, meat, dairy products, frozen foods, seafood, bulk foods, packaged groceries, deli and baked goods, in addition to vitamins and supplements, health and beauty products and natural household items.
HCMC also operates Healthy Choice Wellness Centers. These centers offer optimized and premium care and services directed at individuals and tailored to maximize the person’s health and well-being. The services offered at the Wellness Centers include IV Nutrient Drip Infusions and intramuscular injection treatments.
To manage the company’s multiple patents, HCMC formed a wholly-owned subsidiary called HCMC Intellectual Property Holdings Limited Liability Corp. (LLC). HCMC is the owner of an intellectual property suite that consists of patents in the U.S. and Canada that focus on safer vaping technology and also include synthetic nicotine compositions, their processes and manufacturing methods.
Step 1: Pick a brokerage.
Many stockbrokers now provide online stock trading services with many offering commission-free trading. Since some high-end brokerages avoid handling penny stock trades, you should check with any broker you are considering to see if it will execute orders in the over-the-counter (OTC) Pink Sheet and Bulletin Board markets where most penny stocks like HCMC trade.
Also, when selecting a broker for penny stocks, you would be wise to choose one that charges either a low flat fee per trade or executes trades commission-free, instead of brokers that charge per share.
Step 2: Decide how many shares you want.
The amount of capital you plan on trading or investing and the market price will determine the number of shares of HCMC you can buy. For example, if you opened your brokerage account with $10,000, then you could buy 1,000 shares priced at $10, 10,000 shares priced at $1 or 1,000,000 shares at $0.01.
You might need to include a fee or commission if you open an account with a full-service online brokerage. With respect to penny stocks or stocks trading below a penny such as HCMC, your dollar goes a long way when you buy these shares.
For example, HCMC stock is currently trading at $0.0003, so you would be able to purchase 33.33 million shares for $10,000. If the stock then dropped to $0.0002, your 33.33 million shares would be worth $6,666, while a move up to $0.0004 would make your investment worth $13,332.
Step 3: Choose your order type.
The types of orders used for trading stock vary, and not all order types are supported by all brokers. To initiate a position in a stock, you will probably want to place either a limit order or a market order. To close out a position, you can choose either a stop-loss or limit order. These order types make up the bulk of orders present in the stock market at any given time.
Step 4: Execute your trade.
After placing your order, it is up to your broker to execute and then confirm the trade based on your instructions.
Where to Buy HCMC Stock
Buying penny stocks like HCMC that trade over the counter on the Pink Sheets require a broker authorized to execute orders in that market. Since not all brokers allow you to trade in penny stocks, Benzinga has provided a helpful table of suitable brokers that give customers access to this market.
HCMC Stock History and Value
As you can see from the graph below, HCMC stock began trading with notable volatility in January 2021. The stock’s meteoric rise in early 2021 came from a combination of factors.
The driving force behind the early 2021 rally was a patent infringement lawsuit HCMC filed against tobacco giant Philip Morris International Inc. (NYSE: PM) in the U.S. District Court for the Northern District of Georgia on Nov. 30, 2020. The lawsuit involved a popular Phillip Morris alternative tobacco product known as “IQOS®” that has over 14 million users.
HCMC’s stock price has been under considerable pressure since its February 2021 peak, however. The stock fell soon after HCMC sold $5 million of Series D preferred convertible stock at $0.0024 in a private placement announced on Feb. 8, 2021, which represented a 150% premium over its common stock’s February 5 closing price of $0.0016.
Other corporate developments included the formation of the company’s intellectual property subsidiary and an exclusive rights offering for shareholders. In July 2021, the stock fell further after the dismissal of HCMC’s Philip Morris lawsuit, although HCMC then filed an appeal to that ruling. A motion to amend its complaint in the case was also denied in December 2021.
As the chart above shows, most of the past 18 months have seen highly volatile trading in HCMC. Speculative buying activity first pumped up the stock’s value in early 2021, and the price then waned as those same buyers dumped the stock later that year. HCMC stock has since fallen into a tight trading range of $0.0002 to $0.0003 per share, slightly above its 2017 to 2020 trading range.
Given possible concerns over the large stock issue in February 2021, the stock’s current price seems to be holding up quite well. Since the stock seems to have found its fair value at this level, a neutral outlook seems warranted at present. Still, future developments in its business or the Philip Morris case could spark another rally in HCMC stock if they seem favorable over the long term.
Pros and Cons of HCMC stock
Because of its extremely low share price, HCMC stock could present an opportunity for the right investor with a bullish view on the stock. Also, if the stock’s intraday volatility spikes again, it could offer short-term traders speculative gains. Keep in mind that the large number of shares needed to make a worthwhile trade could cost commissions and fees that can substantially diminish short-term gains.
- The stock price is so low that you have an implied put option at $0.
- You can control a large amount of stock for very little money.
- It shows considerable upside potential with limited downside.
- Comes with high risk.
- Possesses potentially high intraday volatility.
- Per-share fees are high.
Is HCMC Stock a Buy, Sell or Hold?
Stocks like HCMC that trade way under a penny present their own set of risks and opportunities to a trader or investor. Whether HCMC stock is a buy, sell or hold can also depend on the price at which the trader or investor has established a position in the stock.
While the near-term outlook seems quite neutral for this stock since its current levels remain near the stock’s historical average price, it could also be a buy at these depressed levels. Buying the stock could yield considerable gains if the company’s current and future ventures, including its patent lawsuit against Philip Morris, begin paying off.
With that noted, the company’s enormous stock float of 187 billion shares tends to present a limit to its upside, unless perhaps the company announces a reverse stock split. Also keep in mind that HCMC lost $3 million last year, and its stock shows a one-year return of -93.02% at current levels, neither of which look very good from a fundamental standpoint.
Frequently Asked Questions
Is HCMC stock a pump and dump stock?
According to the stock’s price chart, the stock’s performance in 2021 certainly fits the pump and dump profile, although the buying phenomenon seems to have now ended after heavy disappointment selling and a large stock issue. At the current rather stable levels, the stock could be due for an increase in price if fundamentals shift favorably. Keep in mind that the largest group of shareholders in the stock are company insiders, so it would make sense to keep an eye on any notable shift in their transactions.