Interesting Stocks-Follow Up-
[March 5, 2004 Follow up]
Using, AXXel Knutson’sVTAR™
December 5th, 2003
[“Volume Trade Analysis Research”™]
“Manage the risk…the profits will take care of themselves”
“In this business, being right is not as important as making money…consistently, and one of primary tenets of the quest is the avoidance of the ‘obvious risk’”
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[“Tradingweapon.com” is the business name for AXXel Knutson, who is a Registered Principal of an independently owned office of Supervisory Jurisdiction [OSJ] with Cantella & Co., Inc. TradingWeapon.com offers all of its securities business through Cantella & Co., Inc., a member of the NASD/SIPC. Cantella is a correspondent of Bear Stearns
Here is what I babbled July 11th, 2002 about the market:
“ UPDATE July 11, 2002: This index is OVERSOLD. We may dislike it…but there is money to be made here we think and that overrides bias.
……………………………………………………………………………………………..
January 7th, 2003
“Our” bottom of July was tested again in October [you may recall that “sinking feeling” but nevertheless those are good bottoms unless one is referring to M. Monroe, of course.
Additionally, the consolidation of the advance in the fall further confirmed the lows and with 11 quarter point rate drops and one 50 point rate drop courtesy of Big Al and the “I am asleep at the switch boys at the Fed” [can you really believe that it took them 12 rate drops? Can you imagine just how sleepy this group really is? Of course you can…. I can.
And here is that index [the Nasdaq 100] we have loved to hate so much and with Nasdaq throwing in the towel, it is now A BRAND NEW index…if you throw out a third of the stocks and start over…just what kind of an “index” is this anyway? Very icky mathematics for sure…we will call this the “Index that will remain an index as long as the junk in the index keeps going up…then when the stocks in the index crash, we will simply replace all the stocks and start over thus giving the investing public renewed faith in our index [for awhile anyway].” I know it is a long name for an index, but we will simply call it the “icky index” for short and you will know what we mean.
It being the icky index that it is, retested with a vengeance in October of 2002 but we do have a bottom…”
UPDATE: AUGUST 22, 2003: The Nasdaq 100 which was under 800 in the last quarter of 2002 is now at 1300 or an increase of over 60% from the trough and about 50% from our buy signal of July 11th, 2002. Just who in July of 2002 suggested we were at a bottom? Well, who? Are we selling? No. That should tell you volumes about where we think the market is going.
UPDATE December 3, 2003: The overall market has taken the last 60 days off consolidating the strong advance of the market and now appears ready to press the advantage to the upside. This is particularly true in the case of the small to mid-cap stocks and the positive divergence in the Russell 2000 is fairly clear when compared to the Nasdaq Composite and somewhat less clear in terms of the broader based S & P 500. We remain very constructive. You can also see the positive divergence in the S & P Midcap 400 and the S & P Small Cap 600. We continue to recommend the sale of most mutual funds in favor of individual stock investment in these stocks. We continue to recommend that the liquidation of mutual fund shares as we believe that most fund companies cannot effectively manage money in an environment that has rapid industrial groups going in and out of favor and where the investment philosophy of the fund manager is still mired in the tactic that worked well from 1981 to 1999-that “buy and hold” strategy is dead in our view and the age of investing along the lines of Warren Buffett has passed. This, of course remains a minority view. We can’t help that. The November Jobs Report came in on the light side this week and the catalyst to the upside is still in the wings. Profit-taking this year is likely over, but that is not the case in January. We are cautious short-term to Ground Hog Day.
UPDATE: MARCH 5TH, 2004: No change. The market is consolidating the advance of 2003 by going sideways. OK with me.
NOW FOR SOME STOCKS…
Tivo, Inc. [TIVO-6.48] The Group's principal activity is to provide television services for Digital video recorders (DVR's). Their subscription-based television service provides consumers with an easy way to record, watch and control television. Below is the weekly chart and the consolidation from the advance to nearly $15 appears nearly complete. We would appreciate a break of five to add to positions. Accumulate.
UPDATE: MARCH 5TH, 2004: $12.75 = + $6.27= + 96%. Average up. We consider this stock still to be in a “strong buy” category and the highs for the year at $14.51 appear a target that we think will be surpassed with reasonable patience. No guarantees, mate.
Imax Corp [IMAX-7.67] The Group's principal activities are to design, manufacture, market and lease proprietary projection and sound systems for IMAX theaters. The Group develops digital re-mastering, post-production and distribution of films in the IMAX theater network. The stock has been strong because of the recent release of "The Matrix Revolutions," presented in the unique Imax format. The base of the stock is at the $7 ½ level with the spike to just over $10. We think that is a target that can be surpassed and this is the level to acquire the stock. We rate accumulate here and a strong buy on a break of $5.00.
UPDATE: MARCH 5TH, 2004: $7.45. -$0.22 = - 2.9% the stock continues to trace in the base and we are going to take our licking and get kicking.
Priceline.com., Inc. [PCLN-17.68] Bad news, price destruction, analyst downgrades and a break of an important decade number [$20]. What could be better? Buy. Here is the new that sunk this stock into our buying range on November 5th, ’03: “Priceline ( PCLN ) stumbled $7.59 to close at $21.66, on volume of nearly 16 million shares. Priceline warned that fourth-quarter net income would come in at 2 cents to 8 cents a share, shy of the 11-cent average estimate of analysts polled by Thomson First Call. The company said it swung to a third-quarter profit of $9.7 million, or 24 cents a share, on revenue of $243.4 million, from a loss of $24.3 million, or 64 cents a share, including charges, on revenue of $240 million.” Well that was November…and this is December and the stock is not near the recent high of $33, but under $20. Accumulate here and a strong buy on a break of $15.
UPDATE: MARCH 5TH, 2004: $24.20 + $6.52 = + 36.8%. We will hold. Current prices still appear rational and a push toward $30 appears equally rational.
Imco Recycling, Inc. [IMR-8.10] The Group's principal activity is to own and operate aluminum recycling and alloying facilities and zinc manufacturing facilities. The Group operates in two segments: Aluminum and Zinc. The Aluminum segment includes processes such as aluminum melting. With improved metals prices and an improved capital structure for the company, we expect a successful attack on the double-digit level. Buy.
UPDATE: MARCH 5TH, 2004: $.9.64 = + $1.54 = + 19%. Average up as we think the recent high at $10.15 looks rational as a short-term target and somewhat beyond.
North American Palladium [PAL-7.27] The Group's principal activities are the exploration and mining of Platinum Group metals and certain base metals. The platinum group metals are palladium, platinum, gold, copper and nickel. Palladium is used in autocatalysts to reduce harmful engine exhaust emission from automobiles. With a solid base at the $5-6 level, the stock looks like an attack on double digits will be successful. If so, the percentage accomplishment for us will be quite acceptable. Strong Buy.
UPDATE: MARCH 5TH, 2004: $9.01 = + 1.74 = + 24% and we will hold expecting a push back to the double digit level.
Northgate Exploration, Ltd. [NXG-2.07] with record quarterly earnings and a solid short-term base at the $2.00 level, this stock looks ready for the next up-leg and that could mean a rather meaningful move. No guarantees mate.
UPDATE: MARCH 5TH, 2004: $2.34 = + $0.23 = + 11% and we will suggest account average up and look for a move toward ten.
Richmont Mines, Inc. [RIC-4.96] The Group's principal activity is to acquire, explore and develop mining properties, principally gold. The Group operates in two Canadian provinces: Quebec and Newfoundland. The Group's mining properties consist of Nugget Pond Mine and Mill, Hammerdown Mine, Francoeur Mine, Camflo Mill and Louvem Mines. Precious metals accounted for 96% of 2002 revenues and other, 4%. The previous high in October at $5.29 surely looks like the target and we suggest accumulation here and upon any break of $5.00. Buy.
UPDATE: MARCH 5TH, 2004: 4.40 = - $0.56 = - 11%. We upgrade to “strong buy.”
Durban Roodepoort Deep [DROOY-2.54] is a high cost gold producer-certainly not a plus, but the stock has a discount that reflects that fact. We think that it will play catch up. The writer’s family holds a long position in this stock. DROOY operates gold mines in South Africa and Papua New Guinea. Gold is the Group's main product, derived both from deep-level and open-cast gold mining, and from the retreatment of surface material. The Group's South African operations comprise: Blyvooruitzicht Mine, Consolidated Crown Gold Recoveries, the North West Operations (Hartebeestfontein and Buffelsfontein Mines), and the curtailed West Wits and Durban Deep Mines. Its operation in Papua New Guinea is the Tolukuma Mine.
UPDATE: MARCH 5TH, 2004: $3.38 = + $0.84= + 33% with a high over $4.00 this stock has performed well and the consolidation appears nearly complete. Strong Buy.
AXXel Knutson
DISCLAIMER
Investment decisions should not be based solely on our proprietary indicators, which are intended as an adjunct to your additional analysis. Please accept these comments as market commentary. We do not intend these comments to replace detailed fundamental analysis. We urge you to accomplish that additional research via your contacts on the Internet or through a trusted financial advisor. If you want additional information on any of the securities discussed within, we will give it upon your request.
This report has been prepared from original sources and company data we believe to be reliable, but we make no representation as to its accuracy or completeness. This report is published solely for information purposes. It is not to be construed either as an offer to buy or sell or the solicitation of an offer to buy or sell any security or the provision of or an offer to provide investment services in any state where such an offer, solicitation or provision would be illegal. Any opinions expressed herein are statements of our judgment on this date and are subject to change without notice and we likely not update that change to you. The opinions expressed are that of AXXel Knutson and are not necessarily representative of Cantella & Co., Inc. Cantella & Co., Inc., its affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold, or sell a position in the securities mentioned herein. Brokers with Cantella will likely have differing opinions.
The author of this report, Axxel Knutson, very rarely invests in any of the securities mentioned in these reports nor does his immediate family unless such securities are management companies of mutual funds or indirectly if such equities are included in mutual funds or index options. Equity investment involves risk of capital loss. We recommend that your portfolio be diversified by company size, industry group, and geographic region and by currency.
It should not be assumed that future selections will be profitable or will equal the performance of past selections. Securities listed herein illustrate selections made using proprietary indicators known as VTAR™ [Volume Trade Analysis Research™]. These names, VTAR™, TradingWeapon, www.TradingWeapon.com Trading Engine™, www.tradingengine.com ™, Volume Trade Analysis Research™, are service marks/trademarks of AXXel Knutson.
All recommendations and commentary are directed toward sophisticated, aggressive traders who have significant experience trading in a volatile market and who possess the financial resources to risk a loss of some or all of their invested funds. Commissions and, if you use margin, interest charges will lessen any return on investment. VTAR [Volume Trade Analysis Research] centers around the proprietary analysis of trading volume, price, general fundamental analysis, beta concerns, group rotation and detailed analysis of risk as it relates to entry and exit points in reasonably liquid stocks.
AXXel very rarely trades in the same stocks as clients or those written about in his newsletters or spoken about in media appearances with the exception of stock index options and mutual fund management companies. AXXel will disclose positions personally held in any such stocks in newsletters when published. Cantella & Co., Inc. Securities, its brokers and its officers may take and have positions although they receive no advance notice of new recommendations or changes in opinion. Those interested in additional information on any stocks discussed within may call at 908-647-5750 or email AXXel at axxel@cantella.com. We do not deal in BB stocks [with the exception of some ADR’s]. Refreshing, isn’t it?
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Stock charts provided through the good offices of www.clearstation.com. Our research can also be found at WWW.Multex.com and on www.ibes.com on a pay-per-report basis. AXXel's VTAR Newsletter-March 5, 2004 |
