Price Don’t Lie: Investors Looking Closely at ERBA DIAGNOSTICS (ERBA)

November 30, 2016 - By Dolores Ford

Price Don't Lie: Investors Looking Closely at ERBA DIAGNOSTICS (ERBA)

Upon recent trading, ERBA DIAGNOSTICS (OTCMKTS:ERBA) shares caught focus of OTC traders as the price moved $0.002, touching the $0.303 price point. Analyzing past data, ERBA DIAGNOSTICS’s shares price was big mover in the last 1-year with the 52-Week low of 175.45% and 52-Week high of -85.43%.

Measuring a firm’s market value, also known as market capitalization allows investors and financial analysts assess the size of a firm relative to the market. Market capitalization can be understood as a statistic reflecting the public’s confidence in a firm because the calculation highlights the public’s investing arrangements. Financial institutions can put similarly-sized firms into groups such as mid-cap, small-cap AND large-cap by establishing a firm’s market capitalization.

Market capitalization is a vital financial indicator for two main reasons. Firstly, it helps investors in establishing value comparison between firms with their stocks trading at different levels. Secondly, it helps decide a firm’s size in relation to its peers. A firm’s market cap varies as its shares price changes, so financial editors compute market capitalization for public firms daily. ERBA DIAGNOSTICS (ERBA)’s market capitalization is currently $23.32 million.

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ERBA DIAGNOSTICS’s shares has traded at $-12.98 month over month. The short interest of stock currently stands at 34,200 against short interest of 39,300 last month. Investors have 1.0 days to close the position.

The over-the-counter market is a place where stocks that are not listed on the NASDAQ, NYSE, or AMEX are traded. This term is referred exclusively for marginal or small firms that don’t fulfil the listing guidelines of the regulated stock exchanges. These stocks are sometimes called ‘pink sheet’ stocks, a term coined from the old days when such stocks lists were published on pink paper (now exclusively online). Since these equities are small and frequently financially suspect, OTC stocks are stated to be risky and, thus, are poorly traded. They are rarely traded, which indicate that the prospect of getting a bargain price is better over the stocks listed in an organized market. As a result, some traders are inclined to purchase OTC stocks in anticipation of making fast gains. The possibility of fast money becomes easier following the cheap prices of most of the OTC shares, often under $2.00-$1.00 per share, though it’s made tougher by the fact that detailed information on these equities is scarce and often undependable.

Trading in OTC securities is no different from straight gambling, and it is not suggested for beginners. Over-the-counter market is a decentralized market, with no central physical location. Market participants use communication methods like the telephone, email and proprietary electronic trading systems for trading. The exchange market and over-the-counter (OTC) market are two simple ways to establish a financial market.

Within an OTC marketplace, dealers are termed ‘market makers’ when they quote equity prices where they will sell and buy a currency or security. Trades can be carried out between two members in an OTC market without others being made informed of the transaction price, making OTC markets less reliable than exchanges. They are subject to fewer guidelines, which means increasing problems for investors. OTC markets are used mainly to trade currencies, structured products, derivatives and bonds. OTC markets can be used to trade stocks, such as the OTCQB, OTC Pink and OTCQX marketplaces in the U.S. Dealers that function in the U.S. markets are controlled by the Financial Industry Regulatory Authority, popularly named FINRA.

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OTC marketplace is a platform where clients and dealers trade with each other just like institutions and corporations do. The price a buyer gets from a seller may vary from the price received for same equity from another seller. The ask-bid margin is often wider for the OTC stocks. OTC markets operate smooth during the normal times, however, their lack of transparency becomes a vicious factor that can result in financial stress, and it was the same case when the 2007-2008 worldwide credit crisis happened. Mortgage-backed equities such as CMOs and CDOs, which were traded solely in the OTC markets, could not be dependably priced as liquidity was poor, and buyers were reluctant to trade in this market. This resulted in an increased count of dealers backing out from market-making activities, increasing the liquidity issue while driving a global credit crunch. The regulatory measures created in as the outcome of the crisis resolved this problem with the setup of clearinghouses for post-trade activities.

Disclaimer: The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Where quoted, past performance is not indicative of future performance.

More notable recent ERBA Diagnostics Inc (OTCMKTS:ERBA) news were published by: Globenewswire.com which released: “ERBA Diagnostics, Inc. Announces Non-Reliance on Previously Issued Financial …” on November 20, 2015, also Businesswire.com with their article: “ERBA Diagnostics, Inc. Appoints Mohan Gopalkrishnan as Chief Executive Officer …” published on May 27, 2014, Globenewswire.com published: “ERBA Diagnostics, Inc. Appoints Ernesina Scala as Chief Financial Officer and …” on May 06, 2015. More interesting news about ERBA Diagnostics Inc (OTCMKTS:ERBA) were released by: Globenewswire.com and their article: “ERBA Diagnostics Inc. Annual General Meeting CEO’s Speech on the Company’s …” published on December 17, 2015 as well as Globenewswire.com‘s news article titled: “ERBA Diagnostics, Inc. Announces Notice of Noncompliance With NYSE MKT …” with publication date: May 20, 2016.

ERBA Diagnostics, Inc., through its subsidiaries, develops, makes and markets diagnostic test kits, or assays, and automated systems that are used to aid in the detection of disease markers primarily in the areas of autoimmune, infectious diseases, clinical chemistry, hematology and diabetes testing. The company has a market cap of $23.32 million. The Company’s divisions include Domestic and European. It currently has negative earnings. The domestic region contains its subsidiaries located in the United States and in Latin American and corporate operations.

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