Ehow/Demand Studio Stock (DMD)

Last month I got an e-mail from the old Ehow article site saying that they were closing their compensation plan which paid me monthly passive income for articles I had written. Initially I thought this was a bad thing but after reviewing the e-mail they offered to buy my articles or I could remove them and place them at another article site.

Since many of my articles were written when I first started trying to make passive income online the quality wasn’t the best so the decision to sell them was a relatively easy one. I decided I would just write new articles at other article sites. I then thought maybe I should invest that money into the companies stock since it was a publicly traded company. I also have a theory that since this company would no longer have to pay passive income every month to the writers but instead would now get to keep 100% of the earnings that this could have a significant impact on thier earnings.

After doing some research on DMD (Demand Studios/Ehow) I realized that they were losing money currently but after buying all these writers articles that may change very soon, possibly in two quarters. In my opinion this company is significantly undervalued since much of their revenue is based on Search engine searches. The earnings have already taken a big hit a few months ago when Google changed up its search results and placements so that is already discounted into the stock.

The good news is that their page views keep going up which translates into higher earnings and management is already addressing the issues with Googles new search engine rankings. Goldman Sacks just upgraded the shares from a neutral to buy recommendation which sent the shares higher a few days ago by 16%.

Bottom line is that this may be a good time to pick up some shares of this company. I will tell you that I picked up some shares myself so I don’t want to leave that out of this post so you know my position ahead of time. That being said any old Ehow writers might want to take their pay outs and invest in the company themselves.

100 Free Stock Trades

Many stock brokerages offer special limited time programs and this includes free stock trades however few also don’t require a minimum initial deposit to open an account and trade for free.

Options House is running a special 100 free stock trades to any new account and the free trades are good until August 1 2011. These trades are free regardless if their market, limit, or stop loss orders. The free trades are good for any type of stock including penny and OTC stocks.

If your on a limited budget or are looking to make some small risky penny stock bets this type of account would be ideal. It is also a great account for experienced investors as well since their ease of placing orders and research platform is one of the best in the business.

When the free trades do expire on August 1, they charge only $3.95/trade so its a keeper. This is a little known firm so jump on this deal if you have a chance.

Why You Should Invest Opposite of Everyone Else

Being popular and following the crowd may have many benefits but when it comes to investing it’s the worst thing you can do.

By the time everyone is following the investing crowd many of the big profits have already been made. If you really want to make money go opposite of the investing crowd. Think back a few years ago after the stock market crashed and everyone was withdrawling whatever money they had left from the stock market.

Fast forward to today and you can see what a big mistake that action was. For the rare few that stayed in the stock market and looked at it as a opportunity to buy high quality stocks at a discount it paid off in a big way.

The stock market may go higher from here but the big profits have already been made. Instead the beaten down real estate market could be the way to invest. No one wants to own real estate, period. The only people investing in it are the long term investors.

If your looking to flip real estate this is definitely a bad time to invest however if you can buy a fixer upper for little money, rehab it, and rent it you can flip it later down the road when the market improves. Worse case scenario, the real estate market doesn’t fully recover in several years but you still have the rent coming in every month.

When everyone is buying sell,when everyone’s selling buy. More investors have made money doing exactly opposite of the crowd that following it.

Sara Lee Spinning Off Company

I love companies that spin off companies since the spun off company normally outperforms the market. Recently Sara Lee released some news indicating that they intend to do just that.

Now might be a great time to buy this stock since shareholders will automatically be getting the spun off company shares as well.

The company will pay its normal $0.12 dividend but the split will also result in a $3.00 per share cash special dividend that should be completed early in 2012.

Sara Lee’s North American retail and food services will be spun off in a tax-free manner to shareholders into a new public company. That entity will keep the Sara Lee name and will consist of the Sara Lee desserts, Jimmy Dean brands, and other popular brands.

The spun off company will include Sara Lee’s beverage and bakery units. The shares are obviously trading higher on the news but there could be much more upside of this stock.