Investor message boards have become all the rage, but many traders don’t know how to use them.
If you see a message on the Stockhouse.ca’s popular Bullboards that screams, YOU’RE NUTS IF YOU DON’T BUY HORSEFEATHERS.COM, GET IN NOW FOR A TRIPLE OR YOU’LL REGRET IT!!!! go on to the next message.
This is probably a desperate hypester flogging a dead horse.
If you see a message that cries, GET OUT NOW, BEFORE YOU LOSE EVERYTHING!!!!, you might want to do some due diligence.
This is probably a desperate basher who has shorted the stock. Bashers seldom target a loser.
Message boards have become a source of great angst to company CEOs, many of whom monitor their boards for bogus news releases, false and misleading information, slanderous or libellous attacks on management and, yes, even pornography. If you use them, be aware that few posters provide any pertinent information and be wary of pump-and-dump schemes.
A message board can be useful in gauging investor psychology. If long-time posters on a company board are whining and losing patience in a stagnant stock, it may be worth a look.
Mass fear and anxiety often are the symptoms of a prime buying environment. Meanwhile, our portfolio remained even for the week. There’s a temptation to take a 20 per cent profit on Twin Mining (TWG-TSE), but a recent pop to 65 cents and a spike in volume (282,000 shares Friday) indicates there may be more upside near term. Twin boasts two intriguing diamond prospects in the exploration stage — Torngat in Northern Quebec and Jackson Inlet on Baffin Island.
So we’re standing pat. Soon they’ll be calling us Warren Buffett.
ANALYST'S THREE STARS
Calgary oil and gas analyst Peter Linder of Research Capital Corporation is bullish on natural gas.
“Our industry average gas price (forecast) for 2001 is now $5.50 mcf (per 1,000 cubic feet) and we will likely increase that to $6 shortly,” says Linder. “I’m the most bullish analyst on gas. The rest of the street is in the low to mid-$4.00s (price).”
Not surprisingly, Linder’s picks are all Calgary-based companies with strong natural-gas exposure — Anderson Exploration (AXL-TSE, $31.00, Yr range, $14.75-$35.70), Bonavista Petroleum (BNP-TSE, $28.00, Yr range, $13.75-$32.00) and Ketch Energy (KCH-TSE, $3.70, Yr range, $2.00-$4.40).
Linder has a 12-month target of $60 for Anderson, noting it is the senior producer most heavily weighted on natural gas.
His 12-month target for Bonavista is $45. He cites an approximate 90 per cent weighting in natural-gas production and management that “includes some of the smartest people in the oil patch.”
His 12-month target for Ketch is $8.00, a stock he says is trading at a ridiculously low multiple of well under two times next year’s estimated cash flow per share.
TRADING TIP
There are enough risks in the market but placing a limit order, requesting a specific price, eliminates one of them.
Many traders have been burned by placing market orders, meaning that the stock will be bought or sold at the price when the order is accepted for trade. If a stock is trading at high volume, there could be a considerable delay before an order hits the market. Early this year, when online brokerages were paralyzed by massive volume of trades, some traders waited hours for trades to execute, often with disastrous consequences.
SITE OF THE WEEK: * Globeinvestor.com
This popular site is jam-packed with information and tools, including a personal portfolio that is easy to use and packed with stock data.
HOT STOCK TRANSGLOBE ENERGY TGL-TSE ($1.51, +.50, +50%)
Investors are betting that the Calgary-based company will tap in big time on an oil discovery in Yemen as they drove the price to $1.51, four cents off its year high.
A speculative-buy recommendation by Yorkton analyst Frederick Kozah and a $2.25 target lit the torch early in the week and by week's end 2,845,000 shares had changed hands. TransGlobe, which also has interests in Alberta and Saskatchewan, announced its discovery early this month. There is some added risk with this play as Yemen has a history of political unrest and conflict.
(Prices based on Friday close)
COLD STOCK
GLOBAL LINK DATA SOLUTIONS GLK-CDNX (.21, -.09, -30%)
Oil-service companies continue to underachieve in a thriving sector and it would be difficult to find a company that has had a harder landing than Global Link, which rents and develops technological equipment to drilling companies. The recent swoon has the Calgary-based company’s stock price down 92 per cent from its March high of 2.52 and one cent off its year low. Global recently announced year-end financials showing a net loss of $313,616, prompting a critic on a chat-board to ask: “Will they be serving Canadian or French champagne at the annual meeting Nov. 30 at the Palliser Hotel?”
(Prices based on Friday close)
