I think we have breakout. Currently at $9.50.
From Investors Digest Peter Hodson
Global Thermal Electric (GLE-TSE, $8.90, 403-236-5556) has been one of the best-performing TSE stocks this year, due to speculation on the huge potential for its fuel cell potential.
I also like the potential, but I also like the fact that Global has a real business supporting its fuel-cell development, is profitable at that core business, and has a dominant world market share already.
Global's core business is the thermal electric generator business, supplying power units for remote locations. Global estimates it has close to 90 per cent worldwide market share for this industry.
The company also supplies units for military uses.
Last year, Global was profitable, and boasted a 44 per cent return-on-equity, one of the highest in Canada
In my opinion, the underlying business is worth $4 per share perhaps, considering a recent $19 million contract received, the company's largest ever contract.
With the stock at its current price, investors have high hopes for the company's solid-oxide fuel cell developments.
Delphi, the former parts division of GM, liked the technology so much that it has already given Global a fuel-cell purchase order, even though Global is a few years away from a commercial product.
Global's balance sheet is strong, and it has yet to raise capital in 1999, despite a share price that is up 600 per cent or more this year.
The lack of financing to date seems to indicate the potential for a solid long term relationship with Delphi is strong.
Global is a buy.
Peter Hodson manages the Synergy Canadian Small-Cap fund. He or his clients may have a position in any securities mentioned.
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