Catching Up… Ferris’ “One Company to Buy” Plus Lots of Updates
by Travis Johnson, Stock Gumshoe | May 8, 2015 4:25 pm
Ferris says, "If I had to pick one stock to put all my money in - this would be it." Plus a smorgasbord of blather for the Friday File
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Source URL: https://www.stockgumshoe.com/2015/05/catching-up-ferris-one-company-to-buy-plus-lots-of-updates/
$ATUSF Thanks, Travis. Long $ATUSF. What commodity moves do you think would be necessary to kick off a significant change in the valuation of Altius ? Are iron ore and potash the keys for them ?
$ATUSF, other miners: A number of mining stocks have a very similar candlestick chart patterns ending last week that look bullish to me. NEM, VALE, CCJ, UEC, ATUSF all look like they have completed bottoms and are into a previously higher congestion zone.
In passing the same pattern appears with OGZPY, the Russian natural gas company.
I don’t trust the Russians but I have been watching this stock and the move over $ 6 seems for real.
The upmove in $ATUSF is more pronounced, maybe because of Ferris’ promotion.
The charts on most of the precious metals miners are much different, they made an upmove earlier and seem to be oscillating in the new range.
Coal stocks have not followed suit, they still look pretty dead, bumping along near multi-year lows. Cleared out of BTU, will re-enter if it starts to show signs of life.
Long all tickers named except BTU.
In the near term, copper, nickel and potash prices would have the most meaningful impact on cash flow, though their largest single “commodity” is coal (that royalty isn’t based on coal prices, but on coal tonnage produced for electricity generation in Alberta) — but when it comes to valuation, probably iron ore has the biggest catalyst possibility if it rises substantially. If it looks like iron ore will return to $100 or so and remain near that level for years, their mines could get funded and generate a couple hundred million in capital gains from Alderon shares and increase the royalty cash flow by 50% or so once the Kami mine is operating. Iron is a big “if” though right now, of course, thanks to huge production increases in Australia and iffy demand in China.
Thank you very much, Travis.
Your explanation gives some comfort and patience on this holding…as noted, coal still looks moribund and could stay that way for an indefinite time…but the other commodities are showing signs of life.
The price spike on Friday was pretty sharp. Hoping for a breakout.
Long $ATUSF
What are you smoking. 62% iron ore at $100 this year? The reason I don’t believe the hype about Altius is that most of their exploration has been confined to Labrador which I know from personal experience working on the Defense Canada Due Line upgrade is one of the most expensive areas to build a mine or infrastructure in the world which affects capex and schedules for development. If you think the Ontario Ring of Fire project is expensive to develop you are wrong. Labrador is tougher, weather is terrible and work force from NFL is used to high wages and lots of time off for unemployment benefits. The iron ore is too far to market. Coal outside of Alberta is dead. My 2 cents.
My 2 cents.
Hi Ken,
No one is predicting high iron ore prices…I think Travis’ point was that the
iron resources are aleady counted as nil in the Altius valuation.
So what do you think caused the spike in prices on Friday ?
Ferris is causing all of this spike in Altius, there’s no real change in the business other than that the Callinan deal has now closed. Altius confirms that there’s no fundamental reason for the spike, FYI: http://www.juniorminingnetwork.com/junior-miner-news/press-releases/768-tsx/als/6905-altius-confirms-no-material-change.html#.VVS6ZmTBzRY
When you send emails to a couple million people about a stock, as Stansberry can in a heartbeat, it doesn’t take a huge response rate (or a huge number of them coming to Stock Gumshoe to find out what the actual stock is) to create added buying pressure, particularly when it’s a small cap stock like Altius.
Travis – A key argument of the shorts in $INVN was that they lost out in the Apple Watch, and while its apparently extremely difficult to separate the fused components in the watch during the typical “tech product teardowns”, and its possible they are a secondary supplier, the consensus now is that Invensense is NOT in the watch. In fact, I read a blog comment (never 100% reliable) that claims the CEO Behrooz Abdi answered a question about why they lost to $STM by commenting that “What we’ve said in the past is that our product shines in the wearables that need to be very, very power conscious and need to be recharged, maybe, once a week or once every two weeks. So as long as you’re not doing something like that, as long as you have to charge it every day, there’s different sets of values, different sets of requirements for that.” If the quote is accurate it sounds like a not so subtle slam about Apple’s watch, which I happen to agree with. If the negative swipe at Apple hurts them with business in the future, that is probably a good thing. At least they won’t go the way of the now bankrupt GT Advanced Technologies ($GTAT). Both were hyped big time by newsletters and analysts in 2013-2014. It also shows how ridiculous Zack’s rating systems are; why does anyone rely on them?
I sold out of my remaining token position in $INVN early Tuesday when it was clear the “prayer” that a short covering would send the stock higher did not materialize (a quick spike was followed by a massive fall). Personally I think the only reason to own the stock now is praying for a buyout, which could still happen. I replaced most of my stake in $INVN at year-end with $AMBA Ambarella which has shown what can happen when you have a good product AND you diversify among multiple end markets and customers. Now I have to hope mentioning one of my few big winners does not jinx me.
I can’t be a very active trader for a number of reasons (not least of which is that I follow trading blackout rules when I write about a stock), but Altius is one where Dan Ferris has a lot of sway and a large number of subscribers — and Stansberry, of course, has access to the largest email lists in the investing world — so it’s no big surprise that Altius shot up by 10% this morning after Ferris loudly teased it as “the one stock he would buy if he had to pick one” — but as his attention dies down, the stock ebbs and flows. He has driven it up many times before with similar pitches and it has come back down a bit in the following months — doesn’t mean it’s not a good stock, or that buying at these prices will be a mistake, but generally you can buy at better prices when he’s not touting the stock aggressively. If I were more nimble, I’d sell a bit after he touts it and try to buy it back a bit later when the marketing machine has moved on to something else — it wouldn’t work all the time, to be sure, particularly if the company has real news, but it would have worked well over the past couple years with Altius.
Thanks, Travis. Don’t have a good feel for how much these newsletters can move stocks,
we’ll just have to wait and see. I’m already swing trading with UEC. Will stay put with Altius.
Long ATUSF
Follow up on 5/13 from post 1: $NEM gaps up into resistance zone above $27 with gold over $ 1200. Upmoves in $UEC, $ATUSF, and $CCJ maintaing. $VALE not joining the party though, and I suppose that $UEC could fall back with reduced short interest. It hit $2.70
and I sold some at $ 2.65
I have not been receiving your Gumshoe publications for the last 10 days and am missing all of your good blather. What’s up?
Hi Merv-
Sorry you’ve been missing the emails. I just sent you an email with information to help get it straightened out.
Lynn
Does Dr. KSS follow up on his recommendations? Impressed with his write-ups, I’ve bought SPHS, AUPH, and TLOG; I have no idea whether he still believes in them, but the investor response has been underwhelming, to say the least.
Thanks in advance for your response.
Hi Michael, Dr. KSS does not maintain a “portfolio” of suggested biotech stocks or give ongoing buy/sell/hold advice, but he is usually quite active in the discussion sections following his posts, including comments about past ideas he has shared and any changes that happen with them.
Hi Michael,
I’ve been following Dr Kss for several months. He will state very clearly when he changes his opinion on a company. The notes that I have show that he still believes in AUPH, describing it as undiscovered. Also my notes indicate that SPHS does not have a favorable opinion, and neither does TLOG (opinion changed May 9).
My suggestion is that if you are not inclined to follow his thread closely, you will be better
served investing in large or mid- cap stocks he recommends. It is unfortunate
that your first three selections are not working out…it happens. You selected very
small companies, and they are risky.
Since following his thread, I have made about 18 investments on his top picks,
of which 14 are ahead. On the ones that are under water, his conviction for medical and scientific reasons has helped me stay with them. There were one or two others that I sold out of quickly at small losses, when an unfavorable announcement came or Doc changed his opinion, which he is certainly entitled to do.
The community on his thread is very involved, and if you follow it you will get plenty of other ideas that will be better for you.
Kind wishes