My pal Bre-Xer, fresh from his tropical hiatus, had an unusual gleam in his eye.
“Say, you been into grandpa’s medicine?” I asked my good friend.
“Haven’t had a drop,” piped my pal. “I’ve got a new lease on life. I’m starting a dot-com company.”
“Oh, so you have been in the sauce . . . OK, if you must, tell me about the brilliant concept that’s going to make you an overnight zillionaire.”
“My company’s going to provide support to Internet companies with low-inferiority complexes,” said my beaming pal.
“Get to the back of the line. I think I know some companies that beat you to the punch, like T&E Theatre.com. Cute Web site but it’s a nine-cent stock on the CDNX. Down 95 per cent. Any other bright ideas?”
“Sure, I could sell groceries online . . . ”
“Millennium Network Corporation has been pumping that concept, among others. If you bought their story in March, it would’ve cost you $1.20 on the CDNX.
“It’s a nickel now. You’d have lost 96 per cent of your investment. You’d have been better off with Cell-Loc! It’s only down about 93 per cent.”
“Well, I could open the ultimate investment site . . . ”
“Sorry, my friend, you’re a tad late on that one too. Global Investment.Com Financial has a wonderful site. Only it seems they haven’t quite figured out the old revenue concept. If you jumped into this baby in March in the height of dot-com fever, you’d have paid $2.74 on the CDNX. Now it’s a dime, down 96 per cent.”
My pal orders a double vodka martini.
“Betcha nobody’s thought of selling art on-line,” says my pal, brightening.
“ArtGalleryLive.com. Cute Web site. A two-center on the CDNX. Down 98 per cent. You’d have been worse off, though, with BlueStar Battery Systems, an e-commerce company with a catchy slogan. Driving at the speed of business. Except they’re down 99 per cent — from $6.10 to eight cents. Get the picture?”
“OK,” choked ol’ Bre-Xer, swallowing the olive. “How about NODOTCOM.COM????”
“Oh, that one. I tried calling their Web site the other day. It said: PLEASE WAIT WHILE LOADING. I think that’s their mission statement. Or bank statement.”
ANALYST'S THREE STARS:
While natural-gas prices have been soaring, some oil and gas companies with high exposure to gas have only shown marginal gains, if any.
Andrew Boland, an oil-and-gas analyst with Calgary-based Peters & Co., covets three smaller companies focused on gas that trade on the Toronto Stock Exchange.
“Companies with a large exposure to gas have an upside that will be attractive,” said Boland.
His top pick, as a strong buy, is Ionic Energy (IOI), which has a 70-per-cent exposure to gas and had a recent price of $3.60 and a year trading range of $2.40-$5.25.
Boland’s one-year target for Ionic is $5.50. The company’s wells are in west central Alberta. “This is a very good company with strong management,” Boland said of Ionic, which recently hired a new chief financial officer, Jerry Sapieha.
Boland has buy ratings on Ketch Energy (KCH) and BXL Energy (BXL).
Ketch, which has a 50-per-cent exposure to gas, had a recent price of $3.85 (range, $2-$4.40). Boland’s 12-month target is $5.
“Ketch has experienced management with good ability to control costs,” said Boland.
BXL, which has a 67-per-cent exposure in gas, recently accumulated 300 sections of land in northeastern Alberta in the Tweedie area, near Lac La Biche. The stock recently traded at $1.70 (range, .68-$2).
“They have potential for significant growth,” said Boland.
TRADING TIP:
Hope is a dangerous word in trading.
A wise trader focuses on reality, not hope. An unwise trader hopes. If a stock looks hopeless, it usually is.
If it’s screaming at you — SELL! — you might want to bite the bullet and do just that.
SITE OF THE WEEK:
redherring.com
Techies will want to bookmark this financial site, packed with insight and candour.
What separates this one from others is that it doesn’t shy away from venturing bold forecasts for the long-term future of the markets.
For instance, it features a fascinating in-depth Top-10 list of trends for 2001. And, unlike many investment sites, it also features writers with vocabularies of greater than nine words.
HOT STOCK: PARAMOUNT RESOURCES POU-TSE $17.50 Up $2.60 (+18%) on 464,000 shares (based on the week ending Dec. 8)
No surprise here. Paramount’s stock price is rallying on double-barrelled momentum with natural-gas prices in the stratosphere and word out of California of a huge, unexpected gas reservoir out of the East Hills project. Calgary-based Paramount is one of several companies with a stake at East Lost Hills, operated by Berkley Petroleum. Berkley also showed a big gain for the week, up 15 per cent. Westminster Resources, another Calgary-based company, was up 13 per cent after garnering hot-stock-of-the-week honours the previous week with a 23-per-cent spike.
COLD STOCK: EARLYRAIN ERN-CDNX .40 Down .45 (-53%) on 34,000 shares (based on week ending Dec. 8)
This is no penny stock from heaven. While Nasdaq stocks were rallying, the penny tech stocks continued to flounder, but none worse than EarlyRain, a Calgary-based company that has only been publically-traded for about seven months. Investors rained on EarlyRain despite its recent alliance with Telus. EarlyRain has a smart-card technology and a deal with Calgary's Glencoe Club. The cards are used for physical access to the club and points of sale in the club. At 40 cents, the young company is at its year low and down about 70 per cent from its year high of $1.25.
