Here are some new ideas, with information as of October 21, 2011.
Buy Husky Oil (HSE) at about half of its peak price of a little over $50 in mid 2008. Since then, the price has hovered between $25 and $27, sometimes reaching as high as $30 before falling back. Over the last three weeks, the price has fallen to a new low of $21 and jumped back up to $25, a 20% gain. The momentum is impressive, and the fundamentals are sound (P/E of 12, debt-to-equity of 21%). All I worry about is that $21 was the lowest price the stock has reached since 2005.
Buy Metro (MRU.A) near a new high. The all-time high price is $49.15 and the stock now trades at $47.75, not much of a discount. However, the earnings are good because the P/E is only 12; the debt-to-equity ratio is a little more worrisome, but manageable, at 40%. The momentum isn’t great, but it’s positive, which is better than many other stocks.
Sell short Agnico-Eagle (AEM). This is not certain by any means. It already fell 25% over the last week. I haven’t looked at the news. It’s likely to recover all at once, but it’s hard to say whether it would drift up or down.
The last time I shared short sale ideas was October 7th. Here’s how they have fared since. For reference, the TSX has climbed from 11,588.36 to 11,949.49 over the same period.
|Company||Price Oct 7, 2011||Price Oct 21, 2011|
|First Quantum (FM)||$15.70||$15.99|
|Inmet Mining (IMN)||$49.21||$50.61|
|Research in Motion (RIM)||$24.30||$23.00|
|Teck Resources (TCK.B)||$33.65||$34.80|
|Yellow Media (YLO)||$0.22||$0.26|