Stock Gumshoe

Well, I’ve now been sleuthing out these companies publicly, and tracking the performance of these advertising emails, for long enough to take a little look back and see if anything interesting has happened to these firms. The most widely hyped pick of the last week, for Porter Stansberry’s London natural resources bank, is probably too recent to do a fair look at (see below), but we can examine some others.

I figure I’ll try to do this every month or so — take a look at the outliers and see if anything stands out.

So what can we say about the companies that have been sleuthed out in this space so far?

Well, there have been five really dramatic movers — way down or way up.

The big winners so far? No surprise, they’re in mining and defense, with Force Protection (FRPT), Lynas (LYSCF), and Rusina (RSNAF) all big gainers of near 100% (or more) since the ads teasing the companies started coming from their respective newsletter advisors. Interestingly, those two mining companies are both Australian — though only one of them mines there. And Force Protection gets a little bit of an unfair advantage here because the email I sleuthed out for them was way after the fact — it came out back in November, so they’ve had more time to gain. Just a reminder that this comparison is not annualized or anything, and is anything but fair.

The big losers? Well, you can’t go down more than 100% … but how about falling 60%? That’s pretty bad, and that’s what happened to Atherogenix (AGIX) almost immediately after we sleuthed out the ad on that one (if you remember, this was a company that was supposed to immediately CLIMB by hundreds of percent … pesky FDA!). Seems that “stent in a pill” strategy maybe isn’t the guaranteed blockbuster the newsletter was promising.

The other big faller has been Solomon Technologies (SOLM), which was supposed to have ironclad patents on hybrid cars and was expected, according to the teaser ad, to deliver 1,000% returns over time. It’ll have to be closer to 2,000% now, since it’s dropped 40% since the email touts came out to tease this one.

Other than that, I’m actually surprised at how many of these very volatile stocks, especially the tiny junior miners and others of their ilk, have actually performed reasonably close to the overall market over the past month or so — lots of up or down by 5-15% or so, but nothing terribly dramatic from most of them.

Though it might also be useful to think about the most popular of these posts, which also have been the ones that I expect are most aggressively advertised … how have they done so far for the folks who read the ad, signed up for the service, and bought shares that day?

It’s mixed — here are the most popular posts so far, and the returns of their matching stock:

Africa’s $10 Billion Secret — Geovic Mining — down 5%

Lake Superior’s $2.6 Trillion Secret – Polymet Mining and Duluth Minerals — Polymet up 25%, Duluth up 9%

New American Super Brand — Whole Foods — down 5%

The Coming Great Wyoming Flood — Big Cat Energy — down 27%

The Kingpin Drug Stock: 3000-6000% Profits … — up 12% (still a ways to go there, eh?)

The Company that’s Turning Water into Profits — PICO Holdings — unchanged, though it’s been less than two weeks so perhaps that’s not fair.

Hot Uranium Stock to Buy Now — Unor — down 6% (it’s only been two weeks for this one, too)

And one that’s really too recent to count? The post on Jack Morgan’s Single Best Investment for 2007 from Porter Stansberry has been hugely popular, but it’s less than a week old. So far, their pick, Ambrian, is already up close to 20%. Not a bad start.

So that’s just a quick breakdown of the world of investment newsletter teasers over the past month or so as I’ve gotten this service up and running. There are probably more interesting ways to look at the data that’s being collected in the Gumshoe spreadsheet (linked from the sidebar if you ever want to see the live, updated version) — maybe I should examine which of the “normal” companies have done best (ie, Whole Foods, Radio Shack, White Mountains) and see how that compares with the uranium and cobalt miners … or maybe, as the list grows, I should try to sort it by newsletter and see if any of them develop a consistent record for their teaser stocks. Let me know if you’ve got ideas.

And as always, don’t take this too seriously if you’re examining the newsletters — this may not reflect at all on the ability of the advisor to develop a good portfolio, though it certainly reflects on their ability to cherry pick their best short term idea (I’m sure none of them want to be picking Atherogenix as a gem to get you in the door, then have to answer your emails when it flops three days later).

Thanks for reading, contributing, and sending in your stock spam — all much appreciated. If you’ve got ideas for the Gumshoe going forward, let them fly here. Happy Investing.

So that’s an attention-getting claim, eh?

Wait, it gets better.

This one comes to us from Porter Stansberry at Phase 1 Investor, who would like us to pony up … get ready for it … $5,000 for entry into the exclusive group of investors who are going to find out — in a report released today, Friday April 27th at 3pm, the full details of the “Single Best Investment for 2007.”

So I’d like to know what they think this “best investment” is … but I’m not so much interested in spending five large for that info. Thank goodness for me, I’m the Gumshoe … and thank goodness for you, I’m happy to share the name of this company that I sleuthed out.

And I hope they won’t take offense that the Gumshoe will be beating them to the punch by a few hours.

So what does Stansberry tell us about this firm?

(It’s very exclusive, so I hope you’ve got your top hat and tails at hand.)

This is a natural resources investment bank, listed in London. One of the major owners who holds about 9% of the company, is referred to, pseudonymously, as Jack Morgan … and he gave a presentation to the Stansberry folks in Naples, Florida, with details about this company.

The argument for this firm’s growth is essentially that they have great management, that they have a pipeline of excellent commodity-related deals thanks to the worldwide commodities boom, that they have a new deal to expand in Asia, and that the companies they’re interested in will want to list in London instead of the US or elsewhere, which means more business for this bank.

Here are some of the details shared about the company … or as I like to call them, “clues”:

• market cap of less than $200 million
• No debt and lots of cash (and prodigous cash generation)
• “just announced plans to expand their business in Asia.”
• “Last year they raised $268 million dollars in 14 offerings. Their income from all those deals was $15 million dollars – an amount 167% greater than what they took home in 2005.”

And of course, the exclusive part: “Because shares of this European-based company are so thinly traded, we’re releasing our report on Jack Morgan’s company this Friday, to just 1% of our readers.”

Some quotes regarding management of this firm:

“The business was started by a former stockbroker and financial journalist for the Financial Times. Over the years he’s managed investment banking companies in Australia, North America and the U.K. He’s also served as a Director of over 20 companies – mostly in the gold and mineral resources sector.”

“He joined forces with an exceptional team of investment bankers from JP Morgan’s Metals & Mining Desk. These guys spent their careers, (some 20 plus years), advising major natural resource companies like BHP Billiton, Rio Tinto, and Glencore on acquisitions and capital markets.”

And just to whet your appetite:

“While their investment banking income has been solidly growing, I expect it to easily rise by 400%-500% over the next few years” — based largely on the expected Asian business.

Part of the argument for investing in this company is that they actually own controlling interests in a large number of early stage commodity companies — these are the ones they mention in the email:

“A low cost gold explorer… Right now, this company controls the 1st large scale gold mine ever developed in Egypt… over 8 million ounces are projected.”

“A platinum mining company… [with] projects in an area of South Africa which produces 80% of the world’s platinum.”

“An iron mining company. This group has an 80% interest in 100 million tons of iron ore in Canada.”

“A gold mining company with key projects in Uruguay.”

So what is the name of this investment bank? What is the single best investment for 2007, according to the Phase 1 Investor folks?

The Gumshoe had to pull the trusty Thinkolator 6500 out of the closet for this one, but I can tell you that this firm is …

Ambrian Capital (AMNZF on the pink sheets, AMBR in London)

There are many points to confirm this, but here are just a couple:

The co-founder and current Executive Chairman of the company is Malcolm Burne, who is indeed a former FT journalist and stockbroker.

The executive team does indeed include the folks from J.P. Morgan that are noted above — including Thomas Gaffney, former director of that “metals and mining” team and the current Ambrian CEO. You can confirm this in their annual reports if you like, accessible here. (Don’t forget to come back!)

And the “recent asian expansion” news is the deal by Sun Hung Kai & Co to buy about 9% of the company and cooperate with them on developing deals in China and elsewhere. The press release is here.

And the special Stock Gumshoe bonus of the day is the list of names of the companies that they noted as key portfolio holdings for this bank:

The platinum mining company is Jubilee Platinum.

The Egyptian gold investment is Centamin Egypt.

The Uruguay company is Uruguay Mineral Exploration, Inc.

The iron mining company is Anglesey Mining.

So there you have it! This is indeed a small company, and though the folks in charge do have good credentials I know not much else about them or their competitive positioning. My sense is that if you believe the current mania for commodity-related companies is going to continue, then Ambrian could very well do great on the back of that. After all, when there’s a rush of investment in a sector the investment bankers generally get fat.

So go forth and researchify for yourselves — at least now you know that the company Stansberry and Associates believes to be the single best investment for 2007-2008 is Ambrian Capital … whether or not they’re right, well, only the passage of time will tell. And whether it’s worth an investment, only you can tell.

And to be fair, you do get more for your subscription to Phase 1’s special deal than just the name of the company — they’ll give you a report, and let you sit in on a conference call with company insiders that they’ll be hosting next week. Maybe that’s worth the money to you.

But for the rest of you, now you’ve got $5,000 you wouldn’t have had if you signed up for this newsletter. Isn’t it high time you shared your good fortune with your friendly Gumshoe?

Best of luck, and have a great weekend everyone.

[July 6 update: I personally bought some shares in Ambrian over the past week or so, as noted on my portfolio blog oneguysinvestments.com -- just wanted to go back and get this disclosure in here for folks who catch this post later on. The post where I explain why I bought now is here, FYI]