Folks on the street have been asking the same question: How’s your pal Bre-Xer holding up through the stock-market carnage?
I am pleased to report that my pal has finally heeded his analyst’s warning — that’s psychological analyst, not stock analyst — and unshackled himself from his life’s ball-and-chain, the computer.
In this case, the red-flag alert was when my pal began to take his contrarian investing strategy to the extreme. For example, when CNBC reporter Maria Bartiromo wore red on the floor of the New York Stock Exchange at the Opening Bell, ol’ Bre-Xer would see green and go on a buying spree.
“There’s more to life than a ticker symbol,” I told my pal. “Listen to your doctor. Gimme your cellphone. Get out of town. Get a life!”
At the moment, my pal is reluctantly filling his doctor’s prescription. He is stark naked without his cell on a remote Mexican beach with his mouse hand massaging a ripe coconut charged with an exotic refreshment known as a Coco-Loco.
Of course, with his luck, my pal is bound to bump into Maria on a cobble-stoned street.
Is the stock market holding you hostage?
Here are some red flags:
* You go to place a sell order online and find you inadvertently hit the buy order. Of course, your order was filled in a jiffy;
* You’ve had to switch mouse hands after your regular mouse hand went numb from those paralyzing 18-hour click days;
* You’ve averaged down 10 times on Cell-Loc in the past month, accumulating the stock from $18 to $8;
* You can’t remember the names of your children;
* You sang Happy Birthday to your partner on your anniversary;
* You were doing due diligence on your laptop and a Flames’ game broke out;
* You took your last vacation in a new 1964 Chevrolet Biscayne.
If any of these ring a bell, you, like ol’ Bre-Xer, may need to be saved from the rat race.
ANALYST'S THREE STARS
Toronto-based Bob Leshchyshyn, head of capital markets at Northern Securities, has strong-buy recommendations on three TSE-listed companies — Envoy Communications Group (ECG), FirstService Corporation (FSV) and Mosaic Group (MGX).
Envoy has weathered the dot-com storm incredibly well compared to most other e-marketing communication services companies. It had a recent price of $7.75, down 25 per cent from its year high of $10.35 (its year low is $6).
Leshchyshyn has a 12-month target of $12 for Envoy, noting the the relative strength of Envoy’s share price in comparison to similar companies such as Razorfish, Poppe Tyson, Cyberplex and Microforum. Razorfish has crashed from $58 to just above $4 in the past eight months.
Envoy is driven by acquisitions, notes Leshchyshyn, adding that any future acquisitions are not reflected in the target price.
Leshchyshyn has a 12-month target of $27.50 for FirstService, which had a recent price of $22.50 (year range, $15.50-$23.75). The company provides outsourcing support to banks, insurance companies and governments.
“We believe that the strategy of strong internal growth, running at 12 to 13 per cent, combined with strategic acquisitions will provide long-term investment potential,” said Leshchyshyn.
Envoy and FirstService also trade on Nasdaq under the symbols ECGI and FSRV. Mosaic, which provides outsourced marketing services to leading corporations serving international markets, has a 12-month target of $17.75. It had a recent price of $12 (year range, $8.90-$22.05).
Leshchyshyn notes that about half of Mosaic’s revenue comes from Europe, but “we believe it has been oversold in reaction to the decline of the Euro currency.”
TRADING TIP
If you’ve been fully invested through the recent market plunge, it may already have donned on you that CASH IS KING.
If you have money sitting on the sidelines these days, take a bow.
But you might not want to celebrate too lavishly and blow your wad in one day. No one — no, not even Abby Joseph Cohen — can read the market’s rock bottom.
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HOT STOCK
PEAK ENERGY SERVICES PES-TSE $3.10 Up 70 cents (29%) on 515,000 shares (week ending Nov. 17)
Peak’s stock was aroused early in the week on record quarterly earnings results ($1.5 million), but the share price of the Calgary-based oilfield services company spiked big time later in the week, possibly on speculation that the company was a takeover target. While many other oilfield-service companies have languished in a hot energy market, Peak is trading near its year high of 3.20 and has doubled off its year low.
COLD STOCK
DYNETEK INDUSTRIES DNK-TSE $4.00 Down $2.40 (-37%) on 265,000 shares (week ending Nov. 17)
Nothing much happened with Dynetek, but the stock ran out of gas anyway which isn’t surprising considering the combustible nature of fuel-cell technology stocks. Even an announcement that Dynetek’s new fuel-storage system will increase the driving range of direct hydrogen fuel-cell vehicles by 30 per cent compared to existing designs failed to prevent a selloff to a new low. Dynetek soared over $8 recently when it announced an alliance with Ford in which the Calgary company will supply compressed hydrogen tanks for the auto maker’s fuel-cell vehicle program.
