LOL! Not much I can add to the TA of GSS that Charles provided since he's presented a thorough analysis. He's presented a solid rational for trading the chart and for his method/style. He makes several very important points about trading that should be remembered. Print out and save his posts on this topic today - good stuff there!
All I would add is some FA perspective - which relates to POTENTIAL only.
GSS has a market cap (MC) of ~600 MM. This appears to be below the range of "average" for a population of some of its peers (CG.to, RBI.to, NXG, GRS, NGD, OGC.to, SMF.to & MFN) That said I do note that several CG, RBI and GRS are trading at 2 to 4 times the market cap of GSS and as such GSS could be viewed as "under valued." Also if one analyzes MC per ounce of projected 2009 production GSS is well below the average for this peer group and as such could be viewed as "under valued."
So from the raw fundamentals it looks like GSS is "under valued" compared to its peers. That said it doesn't take one long to drill down and figure out why that happened.
GSS has been bogged down with the commissioning of its BIOX plant, you know, the one that treats those sulfide ores AND it had to deal with power cuts just as the price of fuel was sky-rocketing. GSS has had some problems and investors have been skittish. If one thinks this management team is different, has made changes and has turned the corner, then it might make sense to ride the play and see if it "catches up to" the level of its peers. But that would be ones reason for buying it and one should set performance goals for the company - IF the company flunks the performance goals - FIRE IT! Look you are hiring management to make you some money: increase share price. If they flunk the test fire them and hire somebody else! If you do not hold the stock, management or yourself to these criteria then all one is doing is trading on "hope"! I could write a book on why that is a DUMB thing to do, but it is also the reason many show up on MBs and trade their own portfolio. If one can master trading the masses they can make a fair living.
BTW - since I've already mentioned it here.....OGC has the lowest M/C on any of these in this peer group. That is why there are those on this thread mentioning it a potential play. They have mines in New Zealand and one or a development property in the Philippines. I'm no fan of the Philippines.
I would want to look at the number of ounces of RESERVES and Resources GSS has relative to its peers before I locked in a LT play.
Finally I'd look at some chart of GSS relative to the POG and its movements - both a St daily chart and a weekly chart. I'd be looking of it to be "relatively cheep" versus the movement of the POG. I think such an analysis would show an upside potential, relative to POG of >65%.
But with the above in mind, GSS goes on my watch list as a ST trader. There it sits right now waiting for a TA signal or sector signal (in competition with others) for some trading capital. Still trying to get my bearings in the market so haven't taken much action on the list yet - but plenty of plays there!
Hope this helps.
H3
TA = Technical Analysis
FA = Fundamental Analysis |
