Subject:
per Spec tives - May 8, 1998
Date:
Sun, 10 May 1998 23:51:15 -0600
From:
"perspectives" <perspectives@shaw.wave.ca>
To:
(Recipient list suppressed)
per Spec tives
weekly look at speculative stocks
May 8, 1998
per Spec tives is a weekly look at the speculative stock markets. The aim
is to examine what stocks are hot and why, and what stocks are worth
watching. The people behind this newsletter are well known and active
players in these markets. This is not a stock advisory and should be
considered for information purposes only. While this product is being
developed, it is offered completely for free with no obligations. Our aim
is to approach the active speculative stocks with the unbiased eye that
comes from our experienced approach to spec stocks.
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We have decided that the Daily Edition is worth continuing, as a lot of you
have taken an interest and the feedback has been very good thus far. So, we
now offer 6 and 12 month subscriptions to our Daily Edition. Each day, we
send out a summary of the day's activity, highlighting the hot stocks of
the day, identifying the stocks we think will lead the way and the stocks
best avoided in the days to come. Plus, we offer our Daily Edition
subscribers the ability to pose questions via email to us on stocks they
are interested in. Issues come out Monday to Thursday, and then of course
the Weekly Edition. From time to time, we send out intra-day alerts on
situations we think have potential.
Here is the deal:
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If you invest in the speculative markets, this is money well spent. We can
help you find good opportunities and keep you from buying the stocks headed
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*********************************
Some of this week's winners from the Daily Edition:
Our best winner this week was Kik Tire (KIK on ASE), which we first alerted
our Daily subscribers to under $0.50. The stock hit a high of $0.90 this
week and closed at $0.75.
A quick trade was to be had on Consolidated Magna, which we alerted at
$0.49 and then saw it go to a close of $0.59 the following day. The stock
has since come back, but could make another leg up soon.
**********************************
________________________________________
Commentary
Suppose you were presented with two investments.
The first, gave you a 70% chance to return 20%. The second, gave you a 10%
chance to return 100%, or a double of your money. If you could only invest
in one, which would you take?
When presented like this, many people would say the first. After all, the
expected return (in consideration of probability) is 14% for the first and
10% for the second.
However, if you listen to speculative investors and watch their actions
enough, you will realize that most would rather take the second. It is much
more exciting to make the double, or triple, or 1000% return than the
boring but less risky low return. And it is for that reason that most
speculative investors can't consistently beat the market.
Everyone wants the big kill.
If you were stranded in the wilderness, would you try and kill a bear for
food, or go to a river and catch a salmon that practically jumps into your
arms? When it is a matter of survival, a person will do what makes sense
and take the fish. But put a penny stock speculator in this situation and I
sometimes wonder if they would try and strangle a grizzly with their bear
(sic) hands. (pun intended.)
I have met a lot of investors in the years that I have been a pro trader.
The ones that consistently make money rarely have had the big kill. Not
because they don't pick stocks that makes strong runs, but rather, because
they usually sell the stock long before it hits the high. They know that to
stay in business, you have to make profits consistently. And so, in the
long run, these people are the ones who have the envy of other traders, who
never realize their slow methodical method to making money.
You'll never go broke making a profit, and, you can't buy a Big Mac with a
share certificate. Cash is king.
In these rather mundane speculative markets, there are not that many high
flying stocks. But, because of the inherent volatility of penny stocks,
there are a lot of opportunities to make 10% to 20% in a very short time
and have a nice gain every month.
I am not saying you should avoid the strong running stocks or sell them
before they have reached their prime. Rather, just be smart, and don't get
too greedy. It clouds the judgement.
Enough Said.
Vancouver Active Issues
Smartire Systems (SES)
smartire.com
These guys make electronic tire monitoring systems, and have a development
partnership with Ford. We have followed the stock for a while, calling the
first run, the pullback, and the subsequent run which we are seeing right
now. The stock closed at an all time high on Friday, and looks good for
those that own it. We think the stock can do more, but buying at these
prices is much more risky and we think that there could be a pullback soon
as investors take some profits. 50/50 here.
Pan Global (PGE)
Looks like Pan Global is going to make another run, likely into the $0.70
to $0.75 price range in the near term. The company has been putting
together some financings and have negotiated a number of new oil and gas
deals recently. Very good management, look for this stock to be higher next
week. We think insiders have been buying stock at the end of last week. 70%.
Rock Resources (RKR)
rockresources.com
RKR is getting ready to drill their copper property in Chile, which is
expected to begin some time in May. The market seems to be building some
momentum in anticipation of that. Watch the stock carefully in the weeks to
come for signs that things are progressing well. Based on how the market is
shaping up right now, we think RKR has a pretty good chance of going higher
from here. 65%
Range Petroleum (RAN)
Companies have a tendency to grant options at prices low relative to their
future price. RAN recently granted options at $1.69 and we have seen the
stock start to make a turn higher since. The company is involved in oil and
gas exploration in Canada and is currently waiting on some drilling in
Saskatchewan, which is being done by Renata Resources. Decent chance to go
higher, but the short term upside should be limited to $2.15 - $2.50. 55%.
Velvet Exploration (VLV)
velvetvlv.com
Velvet is an oil and gas explorer working in South Central Alberta. They
have two wells being drilled right now, and the market activity is
indicating that they may have hit something and positive news may be soon
in coming. Good potential for a positive change in the fundamentals, we
think this stock can do well in the short term. 65%.
Ultra Petroleum (UP)
Our expectation last week was that UP would come off a bit as the news had
taken the short term speculative expectations out of the market. The stock
has come off but rebounded nicely on Friday, indicating that we should at
least see it stable in the short term. Look for the stovck to trade between
$5 and $5.65 in the next short while. 50/50.
PCS Wireless (PCS)
pcswire.com
Large bids came into this stock on Friday and it came back a bit after
faltering earlier in the week. The stock is at its technical support level
and should make a bounce higher soon. This stock has a tendency to have a
strong day periodically and does look like it can make a move soon. Watch
PCS for a good trading opportunity. 65%.
Nortran Pharmaceuticals (NRT)
nortran.com
NRT had a rough day on Friday, on very strong volume. That indicates to us
that the run may finally ready to make a pause, and perhaps head lower.
Good company, but perhaps too much good has been priced into the stock.
Don't be afraid to take profits on NRT. 40%.
Alberta Active Issues
Kik Tire (KIK)
chps.com
KIK manufactures non-pneumatic tires, primarily for industrial and bicycle
applications. They have grown sales 81% in the last year and are on pace to
continue that strong growth, particularly if they can close a deal to set
up a manufacturing facility in China. These sort of industrial deals are
relatively hot in the market these days, and we have seen KIK make a nice
move in the past week, going from $0.41 to $0.75. We have heard some rumors
which give us a very positive feeling about the direction of KIK in the
next week. News is expected early in the week and we anticipate substantial
buying may come in after the news is announced. KIK should definately be
watched next week as it can make a substantial move to the upside. Very
tightly held. 80%.
Roper Resources (RRN)
Looks as though Roper has changed their business direction, and is now
entered into a deal with Safe Environment Engineering who manufacture a
personal safety monitoring system for people working in dangerous
environments. An order for the Portable Safety Monitor product was recently
sold to Boeing. The stock has made a great move lately, but with the
announcement of news recently we think that the stock will come off soon.
Look for weakness early in the week as investors take profits. 35%
Info-Interactive (IIA)
interactive.ca
IIA has been the hot stock in the speculative markets for the past two
weeks. The gains have been phenomenal thus far and have us concerned that
the euphoria may be over soon. Based on some of the late day weakness we
have seen in the past two trading sessions, we think IIA has a good chance
to head lower this week. 35% at these levels.
Anvil Resources
anvilltd.com
Anvil has been drilling a well in Webb County, Texas, and has reached total
depth. Logging results were announced on Thursday, indicating the prescence
of 9 potentially productive zones. Production casing is being run and the
well is being completed. The question now is how much gas there is in the
zones (if at all) and what the total value of the well will be. The market
is indicating that they have hit something quite substantial, but we think
buying at these levels is too risky. The stock does look as though it can
still go higher, but investors should be cautious as there could be a good
deal of price volatility in the near term. 60%.
**************************
Disclaimer:
This is not an investment advisory, and should not be used to make
investment decisions. Information in per Spec tives is often opinionated
and should be considered for information purposes only. No stock exchange
anywhere has approved or disapproved of the information contained herein.
There is no express or implied solicitation to buy or sell securities. The
writers and editors of per Spec tives may have positions in the stocks or
financial relationships with the companies discussed above and may trade in
the stocks mentioned. Don't consider buying or selling any stock without
conducting your own due diligence.
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