With brokerages and their research analysts under the microscope in recent years, one might have expected that the research game would have gotten somewhat of a facelift.

No such luck.

It’s business as usual, for the most part. Which is to say there are still too many cheerleaders and not enough straight shooters on the Street.

Consider, for example, some of the shoddy Canadian coverage of Biomira, the wildly volatile Edmonton biotech company (see Cold Alberta Stock, below).

Biomira’s recent news that its marquee drug had failed to achieve targets in Phase III trials caused a commotion at a couple of brokerages reminiscent of the Calgary Stampede’s wild cow milking contest.

Two biotech analysts scrambled to close the barn door as the news broke.

That was the good news.

The bad news was that, although the barn door was closed, the barn is empty, the cow is dry and shareholders in the speculative stock have been left holding the empty milk pail yet again.

Biomira (BRA-TSX) will continue to test Theratope in other trials, as the vaccine has shown some promise in some patients with metastatic breast cancer.

Still, the outlook appears bleak for a company that has yet to get a drug approved despite running up a deficit of about $331 million since its inception.

On the day Biomira stock tanked 60 per cent, analyst Karen Boodram of Pacific International Securities pulled a 12-month target price of $5 and a buy recommendation, switching to sell.

She also noted that target price was under review, which is what analysts generally do when they’re not quite sure what to do.

Yet, when Biomira busted through Boodram’s target the week before in a wildly bullish biotech market, hitting $6.60 with investors anticipating favourable results, there was no recommendation change to alert shareholders.

No wonder many investors have learned to ignore analyst recommendations and focus mainly on the research in the reports. Research Capital’s Andre Uddin anticipated disappointing results from Biomira back on May 9 when he chopped his 12-month target in half, from $3 to $1.50.

Yet, Uddin didn’t downgrade his recommendation from hold to sell until after the news, matching strides with Boodram.

When Uddin slashed his target on May 9, investors didn’t seem to care as the stock tripled over the next five weeks.

Another analyst who covers Biomira, Cosme Ordonez of Dlouhy Merchant Group, beat his counterparts by nine months by issuing his sell call last September.

However, even Ordonez was behind the eight-ball. Ordonez’s timing was also dubious as his Sept. 19 revision came after the stock had plunged on interim results of the Theratope trials and, prior to that, he had a lofty 12-month target of $11.60. Ordonez has maintained his sell recommendation and his revised 12-month target of $1.95.

Analysts, to their credit, have discovered a new four-letter word – sell – a recommendation that was virtually non-existent at the height of the last bull market.

There’s just one problem.

Unfortunately, more often than not, by the time the analysts get around to hollering sell, the stocks are screaming buy.

* SUNKEN TREASURE: Wonder when investors in Visa Gold Exploration (YVL-TSX Venture), the treasure-hunting play that is at the centre of a massive Bay Street stock-manipulation probe, got the hint they’d been had?

Could it have been when they saw the company was hunting for sunken shipwrecks off Cuba’s coast with Cuban President Fidel Castro as a sidekick?

Or could it have been when they saw the cesspool of pump-and-dump artists doing their business on the Visa Gold chatboards on Stockhouse’s Bullboards?

Or did they get suspicious over the extraordinary trading patterns of the stock?

Or perhaps it was when they found out the company office was located in a building in Toronto above a pool hall named Shark’s and next door to a massage parlour.

Or was it when the company stopped answering its phone?

Or when the stock was suspended from trading, or when it was delisted?

Many speculators in Visa Gold never did get the hint. If somebody writes a textbook on how not to run a public company, they ought to pick the brain of Visa Gold president Paul Frustaglio.

Stay tuned.

* SAGE WORDS: “We’ll probably see this one on 60 Minutes.”

– A poster on Stockhouse’s Visa Gold chatboard, Dec. 19, 2002



HOT ALBERTA STOCK: CANADIAN SUPERIOR ENERGY
SNG-TSX $1.67
Up 25 cents (+17.6%) on 2,022,800 shares (for week ending June 20).
Investors backed up the tanker truck and loaded up when Canadian Superior laid out its game plan for drilling the Mariner natural gas play, the offshore program in which it is partnered with El Paso Oil & Gas Canada. Canadian Superior has lagged many of its counterparts and is still more than 50 per cent off its 52-week high of $3.41.



COLD ALBERTA STOCK: BIOMIRA
BRA-TSX $2.29
Down $3.59 (-61.1%) on 11,302,100 shares (for week ending June 30).
Investors who didn’t want to miss the Biomira train as it was departing the station and didn’t bail in time got a rude awakening. The Biomira train derailed when the Edmonton company revealed hugely disappointing results in testing of its cancer vaccine, Theratope. The shares had spiked 88.7 per cent the previous week as investors anticipated positive results.