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| Lesley Marks of Jones Heward Investment Counsel |
|---|
| 77 King Street West, Suite 4200 |
| Toronto ON |
| M5K 1J5 |
| (416) 359-5000 |
| Fax: (416) 359-5950 |
| WAIT | Aecon Group Inc | ARE-T | 9.520 | Were very comfortable with the investment. Recently they fell on hard times due to profitability. They bid too aggressively in projects. Usually new management comes into the business and turns it around but it will take some time. 2 – 3 quarters. | 2011-03-09 | ||
| WAIT | Labrador Iron Mines Holdings Ltd. | LIM-T | 75.500 | Will be producing near term. Iron ore is a crowded space in Canada. Short-term outlook in markets is volatile. But long-term demand for Iron Ore in China is strong. You have to be willing to ride out the volatility. New Millennium and Champion are alternates. | 2011-03-09 | ||
| BUY | Mosaid | MSD-T (Dead) | 30.350 | Positive on it. Has had some significant strategic deals but there will be good news flow out of this one. Great cash flow, great balance sheet. | 2011-03-09 | ||
| BUY | Wi-Lan Inc. | WIN-T | 5.730 | Prefers MSD-T. Positive on this kind of company. Recently they had a flurry of great licensing news, which has boosted it. They recently financed. Feels they over financed. Great balance sheet and great cash flow. | 2011-03-09 | ||
| N/A | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Market: It’s all about small caps right now. Small cap market is very resource oriented. Volatility is in the commodities. She focuses on growth opportunities. She sees the strength on the commodities as well as tech sector. | 2011-03-09 | ||
| TOP PICK | Bear Creek Mining | BCM-X | 50.130 | They will be producing in 2012. One of her favorites. They will go through a multiple expansion. She is also positive on Silver. | 2011-03-09 | ||
| TOP PICK | Eastern Platinum Ltd. | ELR-T | 1.490 | Likes the platinum aspect and there are very few options. There industrial as well as consumer demand. Balance sheet looks good. Offers growth in production. It was overheated in ’08, which it is below at this point. They are back on track now. They are more likely a takeout target than Bear Creek. | 2011-03-09 | ||
| WAIT | Enablence Technologies Inc. | ENA-X | 0.275 | Rocky period recently, based on disappointment on earnings and contracts. She is positive on the new management team. Given current value of stock it is best to wait on this one. | 2011-03-09 | ||
| DON'T BUY | Quadra FNX Mining Ltd | QUX-T | 13.160 | Has everything you would want in a stock right now. Copper, right jurisdictions. Problem is operation results. Great stock to own in between results. Over next 18 months she would like to see a joint venture on that asset to confirm it has a future value. Wants to see more consistency with this company. | 2011-03-09 | ||
| BUY | Bankers Petroleum | BNK-T | 8.650 | Street was disappointed. Expectation was for higher reserves. She doesn’t think there is a lot more downside. She would be looking at it as a buying opportunity. If management starts to buy stock, street will have confidence in management. | 2011-03-09 | ||
| PAST TOP PICK | Air Canada (B) | AC.B-T | 2.690 | (Top Pick Nov 24’10, Down 28.61%) Concerns were about union negotiations but oil price is now more of a concern. Jet fuel is about 25% of their operations. | 2011-03-09 | ||
| BUY | Fortress Paper | FTP-T | 50.700 | Specialty paper company. Not a lot of people are talking about forest products. She likes it. Excitement in the story is about a pulp plant that they are converting to a product that will be used with rayon, and since cotton products have taken off, there is a lot of interest in rayon. Company will do well after they convert in the summer. It can be rolled out to other plants. | 2011-03-09 | ||
| PAST TOP PICK | Perseus Mining Limited | PRU-T | 3.060 | (Top Pick Nov 24’10, Down 3.44%) Moving towards production and expect valuation to increase. Feels it is getting hit due to what is going on in Libya. | 2011-03-09 | ||
| DON'T BUY | Great Western Minerals Group | GWG-X | 0.830 | Rare Earth (she is not familiar with this one in particular): Quotas on exports of Rare earth out of China. She is not as positive on this commodity because it is a quota-related play. | 2011-03-09 | ||
| PAST TOP PICK | Copper Mountain Mining | CUM-T | 6.560 | (Top Pick Nov 24’10, Up 43.71%) Was a top pick last time. Still likes it. Positive on outlook for copper. Generally when they move from pre-production to production, you see am example in multiple. If you can ride out this movement you will do well in this name. | 2011-03-09 | ||
| BUY | Allana Potash Corp | AAA-T | 1.660 | This is the one she has chosen of this sector. She likes the asset and the management team. Can be brought into production with lower CAP-X than in Canada. It’s a good opportunity to enter at this level. | 2011-03-09 | ||
| TOP PICK | IMRIS Inc. | IM-T | 7.270 | Medical imaging company. Cross between health care and technology. They sold about 40 of their MRI units, which can be wheeled into surgery. Great management team. Strong investment in the company – management owns 30%. Just starting to hit profitability. | 2011-03-09 | ||
| Comment | Aastra Technologies | AAH-T | 18.450 | Canadian tech play that has struggled with very weak results. Good support because of the 4.36% dividend, which is sustainable, so probably not a lot of downside from here. Doesn’t like growth outlook but an attractive yield for a yield investor. | 2010-11-24 | ||
| HOLD | ATS Automation | ATA-T | 6.260 | 2 business including automation systems business and solar. She attributes no value to the latter. She’ll continue to Hold for 2 quarters in hopes the economy will bring them back on side. | 2010-11-24 | ||
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| WAIT | Bennet Environmental | BEV-T | 2.150 | Solid management but concerned about lumpiness and lack of diversification. Did an equity offer to raise monies for an acquisition. 80% of the value of the company is now in their cash position so there is very little downside. Currently negotiating an acquisition but would wait to see what this will be. | 2010-11-24 | ||
| PAST TOP PICK | Linamar Corp | LNR-T | 19.500 | (A Top Pick April 7/10. Up 2.43%.) Still likes. | 2010-11-24 | ||
| PAST TOP PICK | Canaccord Financial Inc | CF-T | 11.710 | (A Top Pick April 7/10. Up 3.01%.) Still likes. | 2010-11-24 | ||
| HOLD | Western Canadian Coal Corp. | WTN-T (Dead) | 10.500 | Possible takeover by Walter Energy (WLT-N). | 2010-11-24 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Gold. More optimistic on base metals so has shifted some of funds out of gold. | 2010-11-24 | ||
| BUY | Romarco Minerals | R-T | 0.220 | A pre-production gold company. Exploration results have been very positive and will continue to be a very newsy story. Could be a prospective takeover target. | 2010-11-24 | ||
| HOLD | Neo Material Technologies Inc. | NEM-T | 6.540 | Rare earths. Stock price fully reflects outlook, which is very positive. | 2010-11-24 | ||
| TOP PICK | Air Canada (B) | AC.B-T | 3.670 | Very pleased with recovery of air travel in Canada. Benefiting from higher priced business travel and increased Atlantic and Pacific travel. Very inexpensive. | 2010-11-24 | ||
| PAST TOP PICK | RuggedCom Inc. | RCM-T | 17.400 | (A Top Pick April 7/10. Down 12.65%.) Released a quarter that was disappointing versus expectations. Still likes. | 2010-11-24 | ||
| WATCH | BioExx Specialty Proteins Ltd. | BXI-T | 2.230 | 2010 has been a very eventful year. Brought Saskatoon plant into production and now going into continuous production, which has to continue for 2 months before they can sell product into the food industry and the market is nervous. Very important milestone. Also looking to add a 2nd plant in 2011, which will require more capital. | 2010-11-24 | ||
| HOLD | Southern Pacific Resource | STP-T | 1.480 | Could be a takeover candidate in the next 12-24 months. Could be eventful as they go through their permitting and financing in the next few months and think this could be positive. | 2010-11-24 | ||
| HOLD | Canacol Energy Ltd. | CNE-T | 1.650 | Exceptional business plan and talented management. Fairly valued at this time and wouldn’t Buy more unless it got into the $1.40 level. 2011 will be a very exciting year, particularly on their Colombian prospects. (She has taken a little bit of profit.) | 2010-11-24 | ||
| TOP PICK | Perseus Mining Limited | PRU-T | 3.200 | Very attractive gold asset in west Africa. Expects to see production in the next 12 months. Did very well at meeting milestones. Could be a potential take out. | 2010-11-24 | ||
| TOP PICK | Copper Mountain Mining | CUM-T | 4.690 | Copper in Canada. Expected to start production in mid-2011. Very cheap compared to cash flow potential. | 2010-11-24 | ||
| TOP PICK | Linamar Corp | LNR-T | 19.650 | Loves the North American auto parts industry. About $1 billion in additional revenues coming on. Expecting an increase in auto sales. | 2010-04-07 | ||
| TOP PICK | Canaccord Financial Inc | CF-T | 11.480 | There is improvement in the wealth management side, retail brokerage as well as on the institutional side. Merged with Genuity and thinks they will work well together. | 2010-04-07 | ||
| BUY | Keegan Resources | KGN-T | 6.520 | Could be a lot larger based on their recent drilling and there could continue to be more drilling news throughout the year that could double the NAV. If they get up to 5 million ounces it could become a $10 stock. | 2010-04-07 | ||
| Comment | Capstone Mining Corp. | CS-T | 3.030 | Very strong restocking of copper in China but there is speculation there could be a de-stocking now, weakening copper prices. Growth in the US could be the next leg for commodities. She prefers other companies that give her a better picture. | 2010-04-07 | ||
| HOLD | Bankers Petroleum | BNK-T | 9.120 | Oil play in Albania. Strong management team. Stock has had such a great run back analysts’ expectations are in the range where the stock currently is. | 2010-04-07 | ||
| BUY on WEAKNESS | Questerre Energy | QEC-T | 4.010 | Quebec Utica natural gas shale play. Just had a huge run. Had a large financing and raised $30 million. Just announced very strong results on a well that they partnered with Talisman (TLM-T). 2 to 3 more wells they will be drilling this year with results coming out in 2nd or 3rd quarter 2011. | 2010-04-07 | ||
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| DON'T BUY | Zenn Motor Company Inc. | ZNN-X | 2.300 | Seems very speculative and she couldn't validate the technology that this company was using. There has also been a lack of news. | 2010-04-07 | ||
| TOP PICK | RuggedCom Inc. | RCM-T | 19.690 | Q2 wasn't great from a growth perspective but Q3 was very strong. Now looking for a resumption in growth and then big profitability. | 2010-04-07 | ||
| SPECULATIVE BUY | BioExx Specialty Proteins Ltd. | BXI-T | 2.100 | Now moving from pilot project towards commercial production. Recently raised money. Expecting to know in the 2nd quarter if they can achieve production. 2nd step will be if they can get the same results consistently that they had in their pilot followed by a look at margins. High risk. | 2010-04-07 | ||
| TOP PICK | Aecon Group Inc | ARE-T | 17.890 | (A Top Pick June 26/07. Up 59.1%.) A name you can put away and not worry about currency or US economy. Lack of infrastructure over the last 10 years is a strong undercurrent for this company. Margins look very strong. | 2007-11-15 | ||
| WAIT | ATS Automation | ATA-T | 4.460 | A bit of a mixed picture. You have the manufacturing side as well as the solar business. They have a lot of workout to do here. Still have to put in a new CEO. | 2007-11-15 | ||
| DON'T BUY | Breakwater Resources | BWR-T (Dead) | 1.990 | This one has had a good correction because of 1) a correction in zinc prices and 2) poor results and bad news coming out of the company. Not sure this is the best zinc play in the market right now. Missing of their numbers is not a huge deal. Risk/reward is not that attractive. Prefers Farallon Resources (FAN-T). | 2007-11-15 | ||
| SELL | Labopharm Inc | DDS-T (Dead) | 1.230 | Has been a major disappointment. Guided that approvals would be fairly easy to receive, which didn't happen. Trials have been okay, not all that inclusive, so there is a lot of uncertainty. | 2007-11-15 | ||
| TOP PICK | Great Canadian Gaming Corp | GC-T | 14.560 | Not much Cdn$ exposure. Most of the assets are in British Columbia, where the 2010 Olympics are going to be held. Have the growth potential to add slots in their casinos, which are very accretive additions. | 2007-11-15 | ||
| WATCH | Martinrea | MRE-T | 12.930 | Reported decent earnings, but guidance was poor for the 4th quarter. Just raised equity and the market does not like this when followed by poor guidance. However, a lot of this is related to volumes in the big 3, which is not in their control. Strong Cdn$ did not help, but if they're looking for US acquisitions, this is quite appealing. Can't see any upside right now. Watch for announcements for any US deal, which would be accretive. | 2007-11-15 | ||
| DON'T BUY | Mosaid | MSD-T (Dead) | 16.800 | 2 names operate in the intellectual property world that investors like to talk about. Mosaid (MSD-T) and Wi-Lan (WIN-T). The space is attractive, but the difficulty is forecasting the outlook. Some of their contracts come up in 2009 so you could see a cash flow shortfall. | 2007-11-15 | ||
| PAST TOP PICK | SXC Health Solutions Corp. | SXC-T | 12.200 | (A Top Pick June 26/07. Down 60%.) Had just announced a possible $27 million contract at that time. They also missed on their quarter. Sold her holdings when they didn't get the contract. | 2007-11-15 | ||
| DON'T BUY | Wi-Lan Inc. | WIN-T | 3.130 | 2 names operate in the intellectual property world that investors like to talk about. Mosaid (MSD-T) and Wi-Lan (WIN-T). The future is hard to predict. Recently announced they are going to be announcing lawsuits. Extremely long-term you could probably do well. | 2007-11-15 | ||
| BUY | Uranium One Inc. | UUU-T | 8.540 | Had some production shortfalls. In spite of the fact that most uranium companies have performed quite well over the last month or so, this one has not. At a riskier stage as a producer. Most of the bad news is probably behind it now, but they still have to digest their acquisitions. Feels uranium will trade slowly upwards. | 2007-11-15 | ||
| Comment | Allen-Vanguard Corp. | VRS-T | 9.930 | Interesting technology to detect and detonate roadside bombs. Did a large financing to acquire Med-Eng. Expect to see continued contract announcements. Stock should trade up, but the one caveat is the integration issues. | 2007-11-15 | ||
| BUY | Hanfeng Evergreen | HF-T | 13.660 | Really likes the outlook for this company. The fertilizer they manufacture is of a higher quality and will increase the yields for the farmers, especially as the intensity and usage of grain increases in the Chinese economy. Long-term outlook is positive. | 2007-11-15 | ||
| BUY | Farallon Resources | FAN-T(dead) | 0.740 | Near-term production would be in the next year. Located in Mexico, which is attractive from a currency perspective. Trades at a discount to its net asset value. | 2007-11-15 | ||
| Comment | A Comment -- General Comments From an Expert | A Commentary | 0.020 | Base Metals - Commodities are correcting. Expects to see some upside, but feels you have to ride out some volatility. Focus on US economic growth is affecting commodity prices, but with continued demand coming out of China and India and the need for commodities over the long term, investors should do very well in commodity plays. Long-term outlook for copper and zinc will be positive. Zinc seems to be in a pretty firm downtrend but thinks it will bottom out here. Copper is moving more sideways and doesn't expect a big uptick in the near term. | 2007-11-15 | ||
| TOP PICK | Ag Growth International Inc | AFN-T | 26.300 | Normally doesn't invest in income funds, but this is a unique situation. Manufacturer and distributor of agricultural equipment. With the strong undercurrent on agriculture, this company will become more of a growth company. 6.4% yield and payout ratio is quite low. Could be a special distribution. | 2007-11-15 | ||
| HOLD | Equinox MineralsLtd. | EQN-T (Dead) | 4.920 | On the copper side this is her choice and it also has a uranium spin also. Expects production in 2008 and thinks the stock will continue to do well through that period. There are rumours that the company may do some sort of off-tick agreement which would crystallize the uranium. | 2007-11-15 | ||
| Comment | Anvil Mining Ltd. | AVM-T | 15.210 | Copper producer in the Democratic Republic of the Congo and is already producing. Fairly stable. Contracts should be okay. | 2007-11-15 | ||
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| WAIT | Bankers Petroleum | BNK-T | 0.800 | Warrants -This is the most leveraged play, so you would be looking at some pretty decent upside if the stock turns out well. A new management team (from Rally Energy) has come in. Investors are playing the prospect that the new team will be able to surface shareholder value. May be a better opportunity after the market cools off of the excitement of the new management team. | 2007-11-15 | ||
| Comment | Lundin Mining Corp. | LUN-T | 10.310 | Diversified mining. Has been quite volatile over the last year. They have been an acquirer and consolidator. You are better to own the target rather than the buyer. You might be better off in and more pure play, smaller company. | 2007-11-15 | ||
| DON'T BUY | Timminco Ltd. | TIM-T (De-Liste | 13.150 | Attractive solar play. Very high risk. Solar valuations globally are ridiculous right now. This is being dragged up by that. If the market continues to correct, this will be one of the companies hurt the most. | 2007-11-15 | ||
| BUY | Thompson Creek Metals | TCM-T | 19.330 | Molybdenum play. Likes this one. Q3 earnings were not so great. Long term, she is quite bullish on Moly prices, which tends to trade with stainless steel. | 2007-11-15 | ||
| PAST TOP PICK | Sandvine Corp. | SVC-T | 5.660 | (A Top Pick June 26/07. No change.) Current market correction in technology names affected the stock. Still likes. | 2007-11-15 | ||
| BUY on WEAKNESS | Arise Technologies Corporation | APV-T (Dead) | 2.340 | Lots of positive news/momentum in the solar space and the stock has benefited. Has been good news with respect to contracts and their ability to build out solar capacity. Also looking to new technology for higher efficiency in solar cells. Building a manufacturing plant in Germany, which always creates a little risk in the story. Be prepared for volatility over the next 6 months. | 2007-11-15 | ||
| DON'T BUY | Katanga Mining Ltd. | KAT-T | 16.000 | Merging with Nikanor, which is a good deal and good for the Congo. Could be an interesting play in the future. Prefers Anvil Mining (AVM-T), which is already producing copper. | 2007-11-15 | ||
| BUY | Migao Corp. | MGO-T | 9.250 | Potash play in China. Increase of yields will be beneficial for the farmers, especially as the intensity and usage of grain increases in the Chinese economy. Long-term outlook is positive. | 2007-11-15 | ||
| TOP PICK | Aecon Group Inc | ARE-T | 11.130 | Infrastructure. Have great contract momentum on the oil sands side. Also benefiting from the demand for infrastructure on utility side. Margins are expanding. | 2007-06-26 | ||
| BUY | Aurelian Resources Inc | ARU-T (Dead) | 26.680 | Has been very volatile with respect to the political situation. Long-term, they will probably be taken out. Drill results look very positive. | 2007-06-26 | ||
| BUY | Canadian Western Bank | CWB-T | 28.310 | Likes the growth outlook in Alberta and B.C. More commercially based type loans. | 2007-06-26 | ||
| Comment | FNX Mining Company | FNX-T(Dead) | 30.400 | Has had a bit of a correction. Expects it will be consolidated. There is a ton of growth in this company. Over the long-term, expects there will be a lot of players interested in it. | 2007-06-26 | ||
| DON'T BUY | Laurentian Bank | LB-T | 35.170 | Doesn't see the growth potential. Prefers Canadian Western (CWB-T), because of the Western focus. | 2007-06-26 | ||
| BUY | Mega Bloks | MB-T | 21.030 | A knockoff of Lego. Acquired Roseart about 2 years ago. Company was sued on the death of a child. Got involved and a recall situation. Most of the problems are behind them. Stock trades for a much cheaper multiple than comparable companies. | 2007-06-26 | ||
| Comment | Mosaid | MSD-T (Dead) | 24.040 | Prefers Wi-Lan (WIN-T), which has a better outlook. There are a lot of positive changes going on in the company. Very good patent portfolio. | 2007-06-26 | ||
| DON'T BUY | Open Text | OTC-T | 22.980 | Has been a strong consolidator in the software industry. Most of their growth has come through acquisition. Finds these situations to be a bit higher risk. Prefers organic growth. | 2007-06-26 | ||
| TOP PICK | SXC Health Solutions Corp. | SXC-T | 29.490 | Healthcare information technology. Not a cyclical business. Good underlying growth. They can sell into their customer base to offer value added to decrease costs. | 2007-06-26 | ||
| Comment | Osprey Media Income Fund | OSP.UN-T | 7.280 | Doesn't really follow this one, but believes it's in the middle of a takeover. Not very heavily weighted on the trusts it in general. | 2007-06-26 | ||
| BUY | Cineplex Inc | CGX-T | 17.430 | Moving to the digital advertising models in the movies, which gives them huge margins. | 2007-06-26 | ||
| BUY | Yamana Gold Inc. | YRI-T | 12.630 | Has a bullish outlook on gold. Gold stocks have under performed the commodity itself. Generally, August, September tends to be positive for gold stocks. | 2007-06-26 | ||
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| DON'T BUY | WebTech Wireless Inc. | WEW-T | 2.430 | Tracking devices for retail and commercial vehicles. Built into Volkswagens on Brazil assembly lines. Had been a strong performer but has recently been hit with a couple of negative news events. Doesn’t look too good right now. | 2007-06-26 | ||
| BUY | Reitmans (Canada) Ltd. (A) | RET.A-T | 23.400 | Has started to trade at a premium multiple because its execution has been so strong. Expect it will continue to generate good cash flow and they'll strong dividends. | 2007-06-26 | ||
| BUY | Farallon Resources | FAN-T(dead) | 0.720 | Zinc play in Mexico. Very high grade. Good growth profile. Not producing but targeted to start in July 2008. | 2007-06-26 | ||
| Comment | Hudbay Minerals Inc. | HBM-T | 21.620 | Zinc play. Found better opportunities for higher growth. The profile is not for very high growth and production. Great quality company. | 2007-06-26 | ||
| DON'T BUY | Lundin Mining Corp. | LUN-T | 12.760 | The market is going into a corrective phase right now. Hasn't been as great a performer as some of the other names. Long-term, this is a great company and has a history of creating value. Dead money in the short term. | 2007-06-26 | ||
| HOLD | Timminco Ltd. | TIM-T (De-Liste | 5.390 | Produces raw material that goes into solar panels. Has had a spike and this is not the best entry point. Long-term, the fundamentals look quite good. Going through a plant expansion right now, which always creates an element of risk. | 2007-06-26 | ||
| HOLD | Thompson Creek Metals | TCM-T | 16.570 | Her outlook on molybdenum is very positive and feels prices going to go higher. A very high-quality name. If there is a market correction, it would be a buy. | 2007-06-26 | ||
| TOP PICK | Sandvine Corp. | SVC-T | 5.740 | Channelling of broadband products by prioritizing data so networks don't get bogged down. Dominating the marketplace. Looking for them to get into the DSL space. | 2007-06-26 |
