Street Life: Analysis

(Street Life is a regular feature that focuses on what's playing in the stock market.)

* ACT I: The Home Run Gold Reserve Inc. (TSX:GRZ) $9.90 Up 182.9 per cent (year to date).

Just a few months ago, the prognosticators with those forecasts of $1,000 US per ounce gold were the laughing stock. Now everyone wants to own gold stocks. With the gold price starting to surge in leaps and bounds as the U.S. dollar craters, speculators are even willing to bear the political risk associated with companies with projects in Venezuela. Gold Reserve has turned into the favourite among the miners exploring in Venezuela and the stock has been soaring on the gold and copper prospects at its Brisas project. Gold Reserve has even out-slugged Crystallex (TSX:KRY), which has the high-profile Las Cristinas gold project in Venezuela. As for the price of gold, Newmont Mining president Pierre Lassonde recently stated that "$700 gold will look like chump change in a couple of years" and says it could challenge the $850 plateau it reached in the last great bull run in the 1980s.

* ACT II: The Bomb Microsoft Corp. (Nasdaq: MSFT) $24.15 US Down 11.4 per cent (one-day plunge).

Microsoft caught a nasty virus, the stock market strain, when the company said it would increase spending on its Internet unit to compete with Google. It also provided uninspiring quarterly results (earnings of $2.98 billion US or 29 cents a share) and a gloomy outlook. As a result, the stock took its biggest one-day drop since November of 2000, losing $31.6 billion US in market cap. To put that into perspective, that money could buy you the world's largest gold company, Barrick Gold (TSX:ABX), and you'd have enough loose change left over to buy Nortel Networks (TSX:NT). Microsoft chairman and founder Bill Gates, who owned 978 million shares of the company in February, lost some ground as the world's richest person, losing $3 billion on paper in the one-day swoon. Wall Street analysts had the usual tardy response with at least five of them downgrading the stock after the news.

* ACT III: The Big Deal Tembec Inc. (TSX:TBC) $1.95 Up 72.6 per cent (two-month rally).

Shares of the beaten-to-a-pulp Canadian lumber companies soared on news of a tentative deal in the softwood lumber dispute with the U.S. As one of the biggest casualties of the softwood duties, Tembec stock enjoyed a spectacular rebound. It peaked as high as $2.27 before dipping on profit-taking. That high represented a double from two months earlier when investors began to speculate on a settlement of the sawoff between Canada and the U.S. Analyst Jaret Anderson of UBS Investment Research estimated that Tembec stood to receive a refund of $262 million Cdn (after taxes) based on the deal.

* ACT IV: The Comeback Story Sierra Wireless (TSX:SW) $20.17 Up 55.1 per cent (six-month gain).

Sierra stock continued its spectacular comeback with investors cheering the company's latest quarterly earnings. The maker of wireless modems reported earnings for the first quarter of '06 at $2.6 million US or 10 cents a share, a dramatic swing from a $7.6-million US loss or 30 cents a share in the year-ago period. Sierra also forecast revenue of $52 million US and earnings of $2.6 million US for the second quarter. Rookie CEO Jason Cohenour has seen company shares surge 55.1 per cent since assuming the reins from David Sutcliffe. That's a remarkable return, considering the TSX market's disdain for tech and obsession with commodities stocks.

* ACT V: The Trust Bust Superior Plus Income Fund (TSX:SPF.UN) $11.00 Down 63.3 per cent (past 12 months).

Perhaps slow readers shouldn't own shares in an income trust that tends to bury the bad news deep in the press release. You could still be reading whenever everyone else is selling. Take Superior Plus, which said it was slashing its May distribution to unitholders to 13 cents from 18 and a half cents per unit, a 30-per-cent cut. But it didn't admit to this until the 31st line of the press release. The company started out by saying it was initiating a strategic review process, which is often good news. But the shareholders naturally responded to the distribution cut, sacking the units for a one-day drop of 27 per cent. Superior Plus operates five businesses - ERCO Worldwide (chemicals), Superior Propane (propane sales), JW Aluminum (aluminum products), Winroc (construction products) and Superior Energy Management (natural gas retailer).

* ACT VI: The Breakout Aspreva Pharmaceuticals (TSX:ASV) $38.07 Up 111.5 per cent (past 12 months).

The fickle market often punishes stocks for positive quarterly earnings news after pre-earnings rallies, but Aspreva's robust earnings gave the stock a seven-per-cent news pop. The results were that good. Aspreva earned $44.8 million US in the first quarter, a stunning reversal from a $9-million US loss in the year-ago period. Aspreva also raised revenue guidance by 14 per cent, forecasting 2006 revenue of $200 million US. The company, which has a collaboration agreement with giant Swiss drugmaker Roche, identifies and develops new uses for approved drugs and drug candidates.

* ACT VII: The Retail Bail West 49 Inc. (TSX:WXX) $1.14 Down 36.7 per cent (year to date).

West 49 stock was all the rage in 2005, scoring a near triple in the first half of the year on impressive growth, but the party has been shortlived. Shareholders have been bailing as the retailer of skateboarding, snowboarding and surfing clothing and equipment continues to disappoint the market. The latest quarterly results kick-flipped the shares 16 per cent as the company reported flat earnings despite a leap in sales numbers at its 107 stores. For the quarter ending Jan. 28, West 49 had $2.7 million in earnings or four cents a share on $50.7 million in sales.

* ACT VIII: The Penny Jackpot Aurelian Resources (TSXV:ARU) $3.47 Up 375.3 per cent (one-month rally).

Aurelian continues to make huge strides and has become a darling of the junior mining market in a matter of a few weeks.

The Toronto-based company has released encouraging drilling results from the gold-silver discovery at its Condor project in Ecuador while at the same time capitalizing on the market's insatiable appetite for mining plays.

Boasting a massive land position of more than 95,000 hectares in southeastern Ecuador, Aurelian has also tapped into a hot market to raise a total of $30 million from two separate private-placement financings in April.

(Stock prices based on results through April 28)

(Gyle Konotopetz can be reached at gyle@businessedge.ca)