₪ David Pescod's Late Edition December 17, 2007
STOCKS THAT COULD CHANGE YOUR LIFESYTLE...
With it being that time of year that one is probably suffering from the last few months, but looking forward to next year with a little hope, it’s time to go to some of our favorite markets seers for their thoughts on this one simple question: If you could nominate only one stock as a situation that could change a person’s lifestyle, what would it be?
In the last year there has been one or two like that, such as Timminco, so we are always hoping to find the next one ... So here we go with some of our favorite market seers and their nominees. Be very aware that any story that might have a lot of upside, also (usually) has a lot of risk. (Our Comments in Brackets)
CORRIDOR RESOURCES (T-CDH) $7.40 -1.04
ANDY GUSTAJTIS of Dominick and Dominick has been one of our favorite market seers over the last few years and his selection is Corridor Resources which has recently suffered because of some production numbers that were a little less than expected. Gustajtis says that the company has a multi-TCF gas field in New Brunswick, the majority of which is 100% owned and has much of the infrastructure to develop it.
In fullness of time, he suggests, this stock could become a $50.00 story as he is assuming that production from the shale zones could work. Meanwhile, they have a deep hole testing the Dawson Settlement that should be at that locale some time in late January with results sometime in February. If the Dawson hits, he then suggests $50.00 would be an easy target with much more potential.
CORRIDOR RESOURCES
PETROLIFERA PETROLEUM (T-PDP) $9.55 -0.44
Analyst WARREN VERBONAC has done awfully well this year with Pan Orient Energy, one of the few stocks that has seen huge moves in the oil and gas sector as it’s almost quadrupled in the last year. But looking ahead, and answering the question, what could change a person’s lifestyle over the next year, he suggests companies such Ithaca Energy (IAE) and Pan Orient (POE) still have great potential. But for the question of what could change a person’s lifestyle, Verbonac says simply “you have to go with a company with some of the biggest targets” and for that he suggests it is Petrolifera Petroleum which they won’t be coming up with results as soon as other companies as Petrolifera won’t be drilling its big targets in Peru until later next year.
PETROLIFERA PETROLEUM
GULF SHORES (V-GUL) $0.235 +0.035
INTL. FRONTIER RES. (V-IFR) $0.61 -0.04
It’s the topic of picking a stock that change a person’s lifestyle and CLIVE STOCKDALE has already done that ... in spades. The former oil and gas analyst with Loewen Ondaatje, Pemberton and Dominion and currently for the last few years has been with Canaccord’s Corporate Finance department and for much of the last decade has been coming up with great ideas for us (at least up until this past year).
He was the guy that came up with the Ultra Petroleum story way back at $1.00 a share, before its recent two for one split. One dollar over the last several years has suddenly become as much as $100 or $120. It did change people’s lifestyle.
When we ask him for his pick right now, he goes with Gulf Shores/International Frontier. “One way or another it’s going to be either a big hit and we’re on the gravy train, or we are back to square zero” Stockdale suggests.
The two juniors are involved in the Ridgewood play in the North Sea which should be spudded within a week (it’s about two to three weeks behind schedule now) with Lundin as the operator. It’s a big play that if it hits, Stockdale suggests, “could make IFR worth as much as $4.00 a share and GUL as much as $3.00 a share.”
Those estimates are a little higher than others, but you get an idea of what it could do for some pretty cheap stocks. What’s also of interest is that they have another high impact play, the Maria, in the North Sea with Petro-Canada in the first quarter of next year, so the next few months for these two cheapies could be very, very interesting ... or not.
GULF SHORES
INTL. FRONTIER RES.
ARISE TECHNOLOGIES (V-APV) $1.99 -0.08
SARA ELFORD is Canaccord’s prize-winning special situations analyst and goes along with the idea that Arise Technologies would be her nominee for something that could change a person’s lifestyle.
But she does note “the analyst in me has to point out that any opportunity that involves growing revenue from near zero to almost $1 billion, over five to six years, naturally carries above average execution risk. With that said, we think that solar opportunity is bright and that Arise is very well positioned to shine over the longer term.”
For a copy of her latest analyst report on Arise, please e-mail Debbie at Debbie_lewis@canaccord.com.
ARISE TECHNOLOGIES
BEAUFIELD RESOURCES (V-BFD) $0.23 n/c
JOSEF SCHACHTER is one person who has been in on the Oilexco story over the last while and has also done well suggesting it to people. When we ask him for his one story that could change a person’s lifestyle and he hears who else is trying to pick stories, he wanders from the oil and gas sector (which is his forte) and into a sector that has caused him a tad of grief over the last few years into mining.
The symbol of the stock is BFD (and you can tell that people have had fun with that symbol), a company that he suggests John Embry plays a significant role in, commences a drilling program in January that he thinks should be watched. They have another project to be drilled next summer as well, but he has big hopes for the base metal play in Quebec and is looking for 2% or better copper plus associated mineralization. The price is definitely cheap, but then there’s a lot of cheap junior mines these days.
BEAUFIELD RESOURCES
POINTS INTERNATIONAL (V-PTS) $3.55 -0.22
PETER HODSON runs one of the best performing mutual funds in Canada, the Sprott Growth Fund and its had an incredible run, up almost 49%. Or at least that was for their last reporting period, but I suspect that might suffer a bit when some of the recent months are added on, but still, that’s been an amazing performance and he’s had some huge winners such as Timminco.
So we go to Peter and these are his words in describing his pick… “it is rare to get a chance to buy a potential global monopoly in its early stages. We have yet to see ANY competition to Points's exchange system, and with Microsoft and Google as partners already they are quickly expanding into different verticals, and already have a global presence. They have transacted 33 BILLION points so far, which will make it extremely hard for any new entrant to achieve any sort of liquidity in comparison.
Revenues are expected to double, despite the so-called slowdown in North America. Further, they have very solid shareholder support, with IAC owning part of the company, and they have no need for capital. Gotta love it!"
POINTS INTERNATIONAL
CGX ENERGY (V-OYL.U) $3.50 +0.08
It’s only appropriate that we ask JOHN CLARKE for a stock that can change a persons lifestyle because he previously came up with one. Currently Vice President with Candax Energy, he’s had more than a few trials though over the last few years (2006 was just an awful year with rig delays at Candax, 2007 was a turnaround and 2008 he suggests, should be lots of fun).
Before joining Candax he used to be one of Canada’s top ranked oil and gas analysts and something that made him so well-known was his picking of Niko Resources, as a stock you had to have for its huge exploration play in India. He started saying you should have it at roughly $6.00 a share and we’ve seen it recently at $100. For those who got a bunch and were patient, there could be a Mercedes in the driveway or a condo in Mexico.
But what now? He suggests if you are looking for something with huge upside, you have to find a big target. “A big-Kahuna” he says, but there is a second part of the equation. You also have to be in an area where the fiscal system allows you to actually make a dollar once you found something and he points to one company, which he feels sorry for as he watches them raise a billion dollars for their operation in Algeria, but are operating under such a hostile fiscal regime, he just wonders if they’ll ever make money for anyone.
For his pick, he goes with CGX Energy for their parcel of massive targets offshore Guyana. It currently does have a fairly rich market cap considering there is no cash flow, but should the targets come in….He points out that the USGS has suggested that offshore Guyana is one of the basins that has some of the highest potential anywhere in the world (there is another basin offshore Greenland he talks about as well).
(Kerry Sully tells us they should have a resource report out in a few weeks and then lots of wheeling and dealing for joint ventures and drilling in 2009).
CGX ENERGY
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About the general market and the resource market in particular, we had expected bumps along the road, but what we are seeing in the market right now is much more than a bump. You would expect tax-loss selling to be hurting stocks this time of year, but what’s going on is now bigger than that.
Add on concerns about margin calls, mutual funds being redeemed as we’ve seen a market go from greed to fear in rather short order.
By our own calculations, there are an awful lot of stocks now selling particularly cheap. But fear is still out there and this asset-backed mess in the U.S. has a ways to go before it’s out of the way.
In the meantime, the question is, how cheap do some good stories become? Maybe it’s the perfect time to be doing an article that might attract some greed...instead of all the fear.
To receive the Late Edition and be on our daily circulation simply e-mail Debbie at Debbie_lewis@canaccord.com and give your address, phone number and e-mail and we’ll have you on the list tonight. |
