₪ David Pescod's Late Edition January 9, 2008
POINTS INTERNATIONAL (T-PTS) $3.12 -0.38
INTRINSYC SOFTWARE (T-ICS) $1.03 -0.03
We finally found the cure...with so many people talking about recession, so much worry about the banks and their exposure to sub-prime risk, so much concern about a slowing American economy and the same for Canada it’s all a little depressing. And then you get to talk to Peter Hodson who just happens to manage the Sprott Growth Fund which over the last year was the best performing fund we can find over 50 million dollars in assets, up 35 %. And it’s been tough to do 35% in the Canadian market with the huge correction we’ve had in the last quarter. So congratulations on a great year Peter, and for those who like mutual funds it’s probably time to look at his.
But it is the time of year to be asking what they see next and give us some stock picks that might even change a person’s lifestyle. What’s refreshing about Hodson is that he says that with everyone talking about recession maybe the markets already priced to expect the worst.
He suggests “Remember the year 2003 that started out terribly with people’s expectations low and ended up not to be too bad at all.” As far as to the answer to our question, if he could only buy one stock for the coming year, Peter, who you’ve seen on Business News Network and probably warm to, suggests Points International is his favorite pick and suggests the company has a near monopoly and is well-managed, has all the capital it needs and he expects it to become a dominant force in it’s sphere of business.
Not so cheap anymore with 120 million shares outstanding and the chart tells you it’s already had quite a move, but he is still expecting much more down the road.
We ask if he did have a second pick at this time and he admits that even today (January 8th) he was still buying Intrinsyc Software for the new products they are rolling out, and he even gave us his personal target for Intrinsic by year-end of $2.00.
Needless to say from here to there would be a nice return in a market that had us spooked over the last couple of months.
WESTERN WIND ENERGY (V-WND) $1.87 -0.02
CANPLATS RESOURCES (V-CPQ) $2.90 -0.27
It’s that time of year that more than a few brokerage houses, investment firms and stock pickers come up with their selections for the coming year and they are always intriguing as to what their top picks would be.
An interesting package put out by Versant Partners and their top ten picks for 2008 we found pretty interesting reading. Some of their picks aren’t going to be a big surprise to you as they suspect Thompson Creek the miner can see 24-25 next year for a 50% return. They also have big hopes for Geologix Explorations with a target of $4.25.
Other ones you may not follow have BIOMS Medical, the Edmonton based investigator of multiple sclerosis they feel has important “balance points” this coming year and they are suggesting this stock could see $12.25 down the road.
It is an interesting report to read but the one story that stood out to us in an era of high oil and gas prices that at a time when oil and gas stocks aren’t benefiting because governments keep increasing royalties, costs keep going up and the bottom line isn’t what it could have been is alternative energy. Alternative energy seems to be a place you’ve got to examine and Western Wind is one of those players.
In the Versant’s Partner report, analyst Massimo Fiore writes “Western Winds current operating capacity is set to quadruple by 2009 as it holds long-term contractual agreements to sell power to the energy hungry California grid.
They continue, “California Dreaming. Western Wind leases or owns a 25,000 acre aggregate land package in some of the most favorable jurisdictions for renewable electricity generation in North America. The company’s assets are ideally located as the wind and solar resource is abundant, power prices are high and strict minimum renewable energy requirements help projects clear potential red tape.”
Fiore continues, “The current operating base of 34.5 MW provides a springboard for expansion as it holds a 120 MW supply agreement with Southern California Edison. Furthermore, management plans to complement the generating portfolio by entering the solar energy space. The company’s total capacity could reach close to 1800 MW by 2015.”
Fiore ends the piece by writing, “Undervalued as an acquisition target. Utilities seeking to diversify their generating base are looking for wind power as the first foray into the renewable electricity space making Western Wind an ideal acquisition target”….
We note that Fiore has a target on the stock of $4.20 on a one year target and we also note another report out by LOM has a $5.40 target. Either of which would appeal to our sense of greed.
When we caught up with company Chief Executive Office Jeffrey Ciachurski, we find him trying to relax in Puerto Vallarta where he is with the family on a vacation for a couple of weeks. His latest coup was hiring George Salama as President for its new subsidiary, Western Solargenics, which is developing over 250 million dollars worth of solar projects in California and Ontario, Canada and Salama has lots of experience in the business.
While Ciachurski is supposedly on R&R for a couple of weeks down south, one gets the impression that with four kids in tow plus wife and his wife has to put up with a guy who spends most of his working days still on the phone instead of the beach...
But while we have Ciachurski, we ask him our favorite question for this time of year ... if he could only buy one stock, what would it be? Of course, the rules are if it doesn’t double, he owes us a bottle of wine. Straight forward, don’t you think?
His pick is Canplats Resources and we find out that while Ciachurski has spent the last four years in the wind business, much of his previous time was spent in the mining business. Canplats and its Camino Rajo Project in Mexico is a story he’s followed for years and he suggests he’s still added to his position as recently as this week.
The company recently announced some drilling results on their project which intercepted 183 metres which is the good part, but it only came up with 1.6 grams of gold per ton. Ciachurski suggests that remember, this drilling is from surface and they’ve got a good chunk of ground (almost 300 metres by 300 metres) that looks productive with much more to come.
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