What is a pea?

The term chicharro is a vulgar term that refers to that which is small (by number of workers or turnover), operates on the stock market and has high volatility and low liquidity. In general, and from what we have indicated, this company tends to present a low valuation and a high risk if it is intended to invest in it. The origin of the term is found in themackerel,a fish that is usually sold at a low price and which is also known by this word, chicharro.

In general, the peas are companies that tend to have no luck and, despite their size, they produce goods and services that are not entirely of good quality. Furthermore, they produce them at the expense of losses to the company.

However, the investment is usually given with speculative criteria in this type of company, since sometimes strong rises in price can be registered in a short period of time. This raises the alarm, especially of those who are not very specialists in the field of investment.

The downside of the existence of this type of company is that they are listed with such terrible values ‚Äč‚Äčthat individuals are not very specialized in bag those who are attracted to them. For this reason, many people can lose large amounts of money if they are not sure what they are speculating on.

It is recommended to do a preliminary study of the situation of the company, review profit and loss accounts, and observe the trend it has been having in recent years to assess how effective it may or may not be to invest in it.

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