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might be interesting to some rts...........macho1
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Subject: per Spec tives - Apr 24, 1998
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per Spec tives
weekly look at speculative stocks
Apr 24, 1998
per Spec tives is a weekly look at the speculative stock markets. The aim
is to examine what stocks are hot and why, and what stocks are worth
watching. The people behind this newsletter are well known and active
players in these markets. This is not a stock advisory and should be
considered for information purposes only. While this product is being
developed, it is offered completely for free with no obligations. Our aim
is to approach the active speculative stocks with the unbiased eye that
comes from our experienced approach to spec stocks.
Subscribe instructions
per Spec tives is offered for free at this time. If someone you know wishes
to be placed on our list, have them send a note to
perspectives@xxxxxxxxxxxxx If a note has been sent in the past few weeks
and they have not been added, please resubmit.
Removal instructions
We are happy to remove your address from our distribution. Simply send an
email with remove in the subject heading to perspectives@xxxxxxxxxxxx along
with your address and any aliases you use.
_________________________________________
We have decided that the Daily Edition is worth continuing, as a lot of you
have taken an interest and the feedback has been very good thus far. So, we
now offer 6 and 12 month subscriptions to our Daily Edition. Each day, we
send out a summary of the day's activity, highlighting the hot stocks of
the day, identifying the stocks we think will lead the way and the stocks
best avoided in the days to come. Plus, we offer our Daily Edition
subscribers the ability to pose questions via email to us on stocks they
are interested in. Issues come out Monday to Thursday, and then of course
the Weekly Edition. From time to time, we send out intra-day alerts on
situations we think have potential.
Here is the deal:
6 month subscription: $75
12 month subscription: $125
If you invest in the speculative markets, this is money well spent. We can
help you find good opportunities and keep you from buying the stocks headed
lower. Our price is less than what many pay for commissions on a single trade.
Please let us know via email if you are sending a cheque, we can get you
started right away. For those who have notified us of a subscription
request, send your cheques to:
per Spec tives
1919B - 4th Street S.W.
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Calgary, AB T2S 1W4
***Include your email address on your cheque please.
*********************************
Some of this week's winners from the Daily Edition:
We have been telling our readers for a few weeks that Pan Global (PGE on
VSE) should be looked at and accumulated. The run started this week, moving
form $0.49 to a close on Friday of $0.67.
Another stock we have discussed on numerous occasions has been Centurion
(CUX on TSE), which we liked in the low $0.70's and upper $0.60's. Stock
finished the week at $0.82, and should continue to do well.
Called the top on Smartire (SES on VSE), a stock we first picked to go
higher at $6.35 (it ultimately ran to a high of $12). It looked likely to
head lower on Tuesday, which it did do.
**********************************
________________________________________
Commentary
Last week's commentary centered on the importance of discipline in having a
trading strategy. Without discipline, a smart market and stock analyst can
turn into a lousy trader. The ability to manage risk and control emotions
is of paramount importance when investing in stocks.
Our advice last week was to establish loss limits on a particular stock and
let that determine the number of shares to be bought. If you can afford to
lose $1000, and you will sell your stock if it goes down $1, you can afford
to buy 1000 shares.
An area of trading psychology that deserves attention is what investors do
after they buy a stock. They often spend a lot of time researching a
company, and realize that everything they have learned indicates that the
company is a solid one. So, they buy the stock and stop doing their
research. Since the company is solid, they put it on autopilot, waiting for
the rest of the market to realize that the stock is undervalued and buy it
higher.
Autopilot is for airplanes. Once they are off the ground, airplanes have
little to worry about. Another airplane won't swerve in front of them, or a
child won't run out from between two parked airplanes on the side of the
airway. Pilots can sit back and let the computer guide them toward their
destination. However, owning a stock is a little more like driving a car.
A road can seem clear and unobstructed. The sky is blue, the birds are
singing, all is well. And then, bamm, the truck in front of you loses half
its load. If you are asleep at the wheel, you can end up with someone's
living room furniture in your lap.
When we look at speculative stocks, we have to realize that there is always
the potential for the stock to fall apart. Primarily, this is because the
company typically has only a few business prospects or products. If one of
those fail, it has a significant impact on the future of the company, and
therefore the stock. As investors, we have to always be on the watch for
signs that there is trouble ahead.
The best way to do this is watch market activity and keep your ear to the
ground. Stocks typically start to discount bad news before the news is
offially out. Those close enough to the company to hear the news before the
rest of us will sell stock to save their hides. Remember that everyone
wants to make money. For someone to sell stock, they have to think it is
going lower. If a stock heads lower than what you would expect, it may be
that there is negative news around the corner. This is why you have to keep
researching and keep studying your investment. A little work will go a long
way.
Finally, remember that there is a difference between good stocks and good
companies. Good stocks are those that don't reflect the greater value of
the company. Good company are those that have good prospects to add
earnings in the future. If a company has great prospects, but their stock
has already run up to euphoric highs to reflect those prospects, you may
have a situation of a good company but a bad stock. Always look at where
the stock is relative to where it has been.
Enough Said.
Vancouver Active Issues
We are trying something new this week. Lots of newsletters tell you what
companies do and how wonderful their stories are, but let's face it,
everyone wants to know what their chances of making money are. The
speculative stock market should be viewed as a probability game, in which
we make our best guesses based on the information that we have. So,
starting this week, we will try and give you our impression of where we
think the stock is going in the short term and what the chances are of that
happening. This should help you get an impression of where we stand, as it
can be difficult just from reading the words. Keep in mind that we are not
investment advisors, and we are not necessarily experts. Do your own
homework, with our information as a reference. Let us know what you think
of this new format.
PCS Wireless (PCS)
http://www.pcswire.com
Last week we discussed how PCS seemed to have a good business through their
subsidiary, Unique Systems, which has been turning in record sales. Our
comment, however, was that the stock didn't seem to have the legs to make a
move higher in the near term. That prophecy held up until Friday, when the
stock had a strong day on strong volume. When we look at the trading
activity, it seems that the promotional efforts may be capturing the
market's interest again. Strong volume, and 179 trades (second most on the
VSE) on Friday indicate that there may be good news around the corner. 65%
chance of heading higher.
El Misti Gold (EMG)
http://www.elmisti.com
Last week's update on EMG was that drilling was expected to start on Monday
and that speculation should start to gain momentum on this stock. We were
right, as the stock moved from $1.49 to $1.85 for the week. That move was
based on the start-up of the Sinchao drilling. We expect we will see
another wave of activity as the market starts to speculate on some results
coming in. It will be hard for even the most astute geologists to predict
how the company will fare, so we advise letting the market tell you what to
do. We think the stock has a 60% chance of being higher in the next two
weeks, but we could see it get cheaper first. Watch for the end of the
first wave of profit taking as a possible entry point, like an up day on
good volume.
Nortran Pharmaceuticals (NRT)
http://www.nortran.com
What a great stock. It has looked healthy for some time and should continue
to do well. However, common sense tells us that a stock which has made a
parabolic rise like this one has to give up some gains some time. We like
the company, and think the stock is in good shape. However, that is for the
people that own it. Buying the stock at these levels has significant
downside risk. So, while we have no reason to think this one is done, we
will say it has a 55% chance of going lower soon. If you own it, enjoy
until you see signs that the strength is getting exhausted. If you don't
own it, wait for another bus.
BMD Enterprises (BMV)
BMV made a huge run on the 21st on news that the company had "a major
breakthrough in the advancement of fuel cell technology for use in the
production of Zero Emission Vehicles. After three years of research and
development the company filed patent applications
with United States patent officer supporting a revolutionary new Zero
Emission power system; a system so advanced it will ultimately adapt to any
commercial environment currently utilizing the internal combustion engine."
That had a market eager to find the next Ballard Power buying shares in
every direction. In effort to cool the speculative fire, the VSE made the
company clarify their exuberantly toned news. The company is working on
getting their product from design stage to prototype stage and needs to
raise money to do that. In other words, they are a ways away from being a
Baby Ballard. That caused the market to come off dramatically on the 22nd,
but the stock has since stabilized and could head higher. The interest in
this sort of technology is high in the markets, and positive developments
will be greeted with some euphoric buying. Keep an eye on this stock, but
we wary of the volatiliy. 55% we will see it move upward in the next week.
Comptec Industries (CIL)
Comptec recently did a deal to aquire their main competitor in the
manufacturing of extrusion equipment. Combined, the company will have
$100,000,000 CDN in annual sales. The synergies of the deal should improve
margins while reducing costs. Sounds like a pretty good deal, but the
excitement may have been priced into the stock at these levels. 60% chance
of heading higher in the short term, but the downside risk is significant
at these levels so we think it best to leave it if you don't own it.
Pan Asia Mining Corp. (PAR)
http://www.panasiagroup.com
This stock has been on a prolific slide since April of 1997 when it hit a
high of $6.95. The stock saw a low of $0.32 about a month ago and is now
showing some signs of stability and perhaps an upside bias. Volumes have
been increasing and so has price. Some of the increased activity may be due
to the recent hiring of a new Investor Relations person. The company is
doing diamond exploration in China, and has more exploration planned. We
may see the stock move on speculation of a discovery, but it could take
time. Short term, we think this one is 50/50, with the stock likely trading
sideways. However, beyond a few weeks we could see this stock do alright.
Worth watching, but wait for signs in the market activity that there is
something good happening.
Pan Global (PGE)
The word we are hearing is that this company has been very busy signing oil
deals and working on some financings. We expect that they want to do the
funding at higher prices, and so the stock has a good chance of heading up.
We loved the stock at $0.50, at $0.67 (Friday's close) it may be getting
little rich. For the nimble traders, there should be some opportunities on
this one. 70% chance of heading higher, a bit more risky at these levels.
Net Nanny (NNS)
The company set their incentive stock options late in March near the
stock's lows and we have since seen the stock start to creep up. The
company has software for filtering internet content, a good story that is
promotable in light of the hot internet stocks in the US. Looks to us like
NNS may be turning the corner and could start to move up toward the $1.40
level soon. 60% chance of being higher.
Alberta Active Issues
Nuvo Network Management (NNM)
http://www.nuvo.com
We thought we would see some profit taking soon on NNM last week. The stock
had one more strong day on Monday, before cooling a bit as traders took
some money off the table. The stock has since stabilized, we think the
market will quiet down in the short term. We are more or less neutral on
this stock right now, as it should trade around the $0.20 mark in the near
term.
First Star Energy
http://www.discoveryplace.com/firststar/
FST, along with Tusk (TKE on TSE), Dalton (DAL on ASE) and Loon Energy (LEY
on ASE) are working on the Strachan Well in central Alberta. The drilling
has reached total depth and the company's are evaluating the drilling
information. The stocks all sold off dramatically two weeks ago when word
leaked out that the upper zone was dry. However, there is a deeper zone
which the market believes has significant gas, and we have seen these
stocks rally back strong. No news out yet, but we expect the stock will
start to move one way or the other shortly before the news comes out. We
think we could see some more weakness in advance of the wait, but do
believe that the upside move could still be considerable. Watch the stock
for an up day with good volume support as a hint that may be good news is
around the corner. 65% chance of being higher, but there is a significant
risk of volatility.
Hegco (HEG)
As many of you know, HEG is working on oil and gas properties in Arkansas
and Oklahoma. The stock made a move when word hit the street that they had
hit gas on their El Grande Well. Since that time, they have been
evaluarting the Arbuckle zone and drilling the Penters zone. The stock has
been moving up in anticipation of the next bit of news, but weakness on
Friday may be telling us that there is something negative around the
corner. We actually think the weakness on Friday is more attributable to
the weakness in the broader oil and gas market after news of oversupply in
the US took prices lower. There is a good chance that we will see the stock
come back next week, but the play right now is not a great risk reward
tradeoff. We expect the stock to trade under $4 until we get close to news
on the latest exploration results. At that time, a break through $4 with
good volume support may telegraph good news. 50/50 at this point.
**************************
Disclaimer:
This is not an investment advisory, and should not be used to make
investment decisions. Information in per Spec tives is often opinionated
and should be considered for information purposes only. No stock exchange
anywhere has approved or disapproved of the information contained herein.
There is no express or implied solicitation to buy or sell securities. The
writers and editors of per Spec tives may have positions in the stocks or
financial relationships with the companies discussed above and may trade in
the stocks mentioned. Don't consider buying or selling any stock without
conducting your own due diligence.
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