Hello and welcome back to CRI's OnlyDoubles New Trades blog.
This post has more to do with a reiteration of how much I like one company rather than an entirely new stock. The company specifically is PanTerra Resource (traded on the Cdn. Venture exchange, symbol PRC.V)
Fundamental criteria
The stock first came to my attention when the company announced they were going to roll their stock back on a 1:15 basis in October, 2009. (news link).
The company has recently announced substantial grant of options to directors at $.25 in November, 2009 (news link), $.24 in September, 2011 (news link) and again at $.21 here in January, 2011 (news link).
Currently (at $.25) the company is trading at a rediculous .325 price to tangible book value. Today they announced they have a 90% increase in NPV from a little over $6 million to now over $11 million (news link)
Technical Criteria
The charts really speak for themselves. It looks like there is a serious pivot on the stock at $.25. Considering the fact that so many directors are long from in and around that area, I am more than happy to go bottom fishing here.
Momentum looks text-book here. The market is working a double bottom from today's break above $.25. The last piece of the puzzle here is volume. Should buyers come along in size - look out...
Fortunatly or unfortuantly (I don't really know) many popular investment sites (like stockcharts.com) havn't taken into account the roll-back so their weekly charts are totaly wrong. This could work in our favor but I really don't know at this time. Anyway, the above chart is from the TSX themselves so I feel good it is ligit. As one can see, this stock tanked in the 2008 bear and never came back. While I am reluctant to suggest we are going back to $11/share, technically speaking, this stock will eventually want to get back to the multi-dollar area. As well, they always say, the longer the base, the bigger the run. If that is the case, this one has got a long way to run!!!!
Summary
Based on the fact that the company is trading at a huge discount to their asset base and the fact that the company has been slowly loading the insiders pockets with stock over the past year, I am more than comfortalble to suggest there is solid fundamental reason to be in PRC. Additionally, the technical picture supports higher prices going forward, with a near term target in the $.355 area and a long term target well north of that.
I will submit that I have been buying this little one along the way for some time now and my cost is about $.21. Considering the double bottom breakout on the news today, I would be more than happy to add to that position. And while it is tough to make the technical argument for $.50 in the near term, I have no problem shooting for that some time over the coming spring rally. Similarly, if you consider yourself a slick trader, work open orders in and around that $.21 area and see if you can pick up some panic/month-end selling pressure stock.
Remember, make sure the system you are using is at least 66% accurate and for heavens' sake, don't put more than 5% of your risk capital into any one play.
That's all for this post,
Brian Beamish FCSI
The Canadian Rational Investor
the_rational_investor@yahoo.com
the-rational-investor.com
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