KSA.V makes this list from Cannacrap as a buy for 2001 (in with some impressive company):
XXVII
2000 - 2001
Seasonal List
This is the 27th year that we have prepared a Seasonal List of year-end stock purchase recommendations.
Normally we draw up a list in early November but because of the severe bear market in PC and internet stocks we decided to wait until the end of the calendar year.
Traditionally the list has been made up of Resource stocks only. Because of the strong seasonality of High Tech stocks and the severe seasonal decline of many great companies we have decided to include many high tech stocks in the list.
Since the market crash of 1987, one of the most profitable strategies has been to “buy and hold” and to buy on the dips. In 2000 such a strategy would have backfired on the investor.
2000 saw the end of the “Goldilocks” economy and return to strong seasonality, as the dot.com bubble era came to a calamitous end and the so called Old Economy showed that it had not gone away but was merely in hibernation.
The seasonal trader would have exited the market in March /April when High tech stocks peaked and missed the carnage on the NASDAQ. It is not the end of technology so much as the end of a valuation era, however one should not expect great companies and top stocks such as Intel, EMC, and Sun Microsystems to trade at ten times earnings as they did in 1990.
As Louis Naviller in the MPT Review observed the market is now back at the same fundamental level it reached in October 1987, October 1990 and October 1998. If we could go back in time and buy at these seasonal lows, those three months they would have provided the best buying opportunities in the past fifteen years.
The NASDAQ posted its worst year to date in its 29-year history and overall it was a poor performance for the broader market. The almost 40% decline was the largest of any North American Market Index since decline of the S&P 500 in 1931.
The S&P itself was down 10%, year over year the worst performance of the index since 1977 and back to where it was in March 1999.
All was not doom and gloom. The TSE was up 6.2% year over year. This is only the second time in the past 25 years that the Canadian market has one of the best performers worldwide and bonds returned double digits for the first time in 11 years. Unlike Technology stocks the overall market trades at sound fundamental value on a historical comparison basis. The current median Price Earnings ratio on the S&P currently stands at 15 to 16 times earnings. In 2000 value stocks were up 6% versus a decline of 22% in growth stocks.
Since 1982 the secular bull market has been defined by a series of interlocking mini bull and mini bear markets where individual sectors gained while other sectors declined. It has been a rotational and tiered market with strong seasonal tendencies; investors have abandoned individual sectors but not the overall market.
2000 was no exception. Investors fleeing high tech found refuge in value stocks.
In base metals, consumption still exceeds production.
Metal and mineral shares in 2000 did not exhibit their normal seasonality. Demand for basic materials was still suffering from the melt down in South East Asia economies. However with the London Metal Exchanger inventories of zinc, copper and aluminum standing at their lowest levels in 10 years the outlook for base metals is positive. A declining US dollar could also help this group.
Natural Gas was the star performer of the year setting new all time highs. The first cold winter in 4 years, increased usage for generating electricity, low prices for a decade caused an exponential increase in price as demand surged.
Oil stocks did not perform as well as the commodity itself. In the past when this pattern has persisted as in 1973-1974 it usually foretells the onset of recession.
On the oil patch, 2000 was a year to harvest cash and clean up balance sheets rather than to discover new reserves and speed up development of existing reserves. Fearing recession or a collapse in prices the industry is only now confident enough to increase exploration activity.
The gold mining sector, despite suffering from historical low prices is still holding production levels steady and offers little short term potential price appreciation.
Unlike previous business cycles when most commodities moved in lock step with each other each commodity group tends to move on their own distinctive fundamentals and supply demand criteria.
In High Tech the dominant factor was the maturing of the PC industry cycle. For the first time in twenty years sales declined at double-digit rates. Consumers switched their buying to peripherals such as MP3’s and digital cameras. The PC instead of being the center of the High Tech universe became just another product as the communication and bandwidth era took over growth momentum.
2000-2001 Purchase Recommendations
Stock Name
2000 High/Low
Exchange 2000 Close & Symbol
Resources
Georgia Ventures - GVI
0.64 - 0.02
CDNX
0.27
Pinewood Resources-PNW
4.25 - 0.46
CDNX
0.90
Hellix Ventures-HEL
0.65 - 0.36
CDNX
0.45
Petromin Resources-PTR
0.68 - 0.21
CDNX
0.26
Oracle Energy-OCL
0.85 - 0.27
CDNX
0.70
Gitennes Exploration-GIT
0.50 - 0.10
Toronto
0.50
Valerie Gold-LVG
1.11 - 0.40
CDNX
0.46
Sultan Minerals-SUL
0.18 - 0.05
CDNX
0.07
Compton Petroleum-CMT
3.80 - 1.31
Toronto
3.77
Goldcorp Inc.-G
10.80 - 6.25
Toronto
9.30
Andean American Mining- AAG
0.79 - 0.13
CDNX
0.25
Lorex Minerals- LRX
0.75 - 0.35
CDNX
0.40
High Tech & Industrial Technologies
KSAT Satellite Networking- KSA
4.50 - 0.35
CDNX
0.49
Senco Sensors- SSZ
0.90 - 0.15
CDNX
0.20
Motorola Inc. - MOT
61.61 - 15.88
NY
20.25
Mitel Cp.- MLT
48.25 – 10.90
Toronto
12.10
Jenosys Enterprise-JET
0.90 - 0.18
CDNX
0.20
Nortel Networks- NT
124.50 - 46.25
Toronto
48.25
Corning Inc.- GLW
113.29 - 50.75
NY
52.81
Icron Systems- ICM
2.60 - 0.19
CDNX
0.33
Lucent Technologies- LU
67.19 – 12.19
NASDAQ
13.38
International High Tech-IHI
1.82 - 0.65
CDNX
.98
Abington Ventures-ABV
2.30 - 0.17
CDNX
0.48
Abington Ventures
Misc. Company reviewed several projects over the past year for potential acquisitions, management expected to decide on one in next few months.
Andean American
Gold - Recently the company signed a joint venture with Placer Dome on the SANTA ROSA property in Southern Peru.
Compton Petroleum
Oil & Gas - Western Canada
Rapidly growing - Controls 150 sections of land in Hooker area Southern Alberta - Deep gas play.
Corning
Fiber Optics
Largest manufacturer of black fiber, fast growth projected over next 2 - 5 years.
Georgia Ventures
Resources
Recently share consolidation 1 for 8 & stock for debt issued.
Goldcorp
Highest-grade gold producer in North America.
Helix Ventures Inc.
Rollback shares consolidation 2000. Oil & Gas Interests S.E Saskatchewan, Alberta.
International Hi-Tech Industries
Revolutionary robotics based non-form utilizing concept for prefabrication of panels composed of reinforced concrete, preformed Styrofoam & cold-formed metals. $27 million invested to date.
Jenosys Enterprises Inc.
High Tech gaming & manufacturing
Despite low price company very successful, estimated sales revenue 2001 $10,000,000, 25,000,000 2002, 75,000,000 2003.
KSAT Satellite Networks
Satellite communications China - Majority of shares owned by Gilat Israeli company that is world leader in commercial satellite operations.
Lorex Minerals
Company reviewing several projects for acquisitions or development.
Mitel Corporation
Designs manufactures and markets networked systems ands specialty semiconductors for the communications industry.
Motorola
High Tech
Shares sell for 1 times sales versus 6-7 times sales for Nokia. Still number two in cellular phones. New Internet Radio coming out in 2001.
Nortel Networks
World leader of Fiber Optics. Despite shakeout of high tech companies still growing at rapid rate for a large corporation.
Oracle Energy
Oil
Large wildcat play in Yemen to be drilled in 2001.
Petromin Resources Ltd.
Heavy oil, Alberta main project Frog Lake on aboriginal land.
Pinewood
Company looking for large oil/gas projects in Africa.
Senco Sensors
High Tech
Designs manufacture state of the art carbon monoxide sensors. Infomercial campaign planned in January 2000.
Sultan Minerals Inc.
Gold
Interesting trenching results on Kena property or Nelson B.C Part of hanging group.
Valerie Gold
59 cents per share. Reviewing several base metal & precious metal projects.
Gitennes
Base metals - Recent discovery property polymetallic massive sulphides. Black top prospect between Merritt & Kamloops. High-grade zinc-copper.
Lucent Technologies
Still largest telecommunications manufacturer in the world. Turnaround candidate. All bad news already out.
Icron Systems
Technology – Designs and manufactures several products for corporations and major companies’ end products.
The information contained in this report is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed nor in providing it does Canaccord Capital Corporation (“Canaccord Capital”) assume any liability. This information is given as of the date appearing on this report, and Canaccord Capital assumes no obligation to update the information or advise on further development relating to these securities. This report is intended for distribution in those jurisdictions where Canaccord Capital is registered as an advisor or a dealer in securities. Any distribution or dissemination of this report in any other jurisdiction is strictly prohibited. Canaccord Capital and it’s affiliated companies and holdings of their respective directors offices and employees and companies with which they are associated may from time to time include the securities mentioned in this report. Please also be advised that past performance of past seasonal lists is not necessarily an indication of future performance. |
