Archive for

Feb 18

Terra Energy as a bet on gas

I remember back in 2009 when I had a broker recommend Terra Energy (TT) to me. He thought it was a great play on an improving economy and what was known to be infinite demand for natural gas.

I didn’t quite see it that way and I passed on the opportunity. Soon after that I passed on the broker. AECO gas prices were well above $5/mcf at the time (I wouldn’t be surprised if the number was closer to $7 or $8) and I figured there was no way gas prices could stay up there. The stock was at around $1.50.

Fast forward a few years and I bought the stock about a month ago between 28-30c. As usual I am slow getting around to a write-up and unfortunately the price has increased somewhat in that time. Nevertheless, even at the current price I think Terra represents a good risk/reward with the main element of that risk/reward being the future price of natural gas. Read more

Feb 12

4 Comments

Tracing out Nordion

I’m going to start this post with a short summary of why I took a position in Nordion. I tweeted the following at the beginning of January after establishing a position in the stock.

As I briefly explain in the tweet, Nordion has about $323mm of cash and another $40mm of restricted cash on their balance sheet. They have $41 million of debt. There are 61.9 million of shares outstanding. I bought the stock at a little over $10, so at an enterprise value of a little under $300 million. Read more

Feb 2

9 Comments

Week 135: Retail Changes

Portfolio Performance

See the end of the post for the current make up of my portfolio and the last four weeks of trades.

Recent Developments

During the Christmas break I began to focus my attention on the Canadian market, searching out stocks that had not yet participated in the bull market or that had further room to run. I started to call these stocks my “Venture” ventures but that is not really accurate; I’ve actually only invested in a couple of companies that trade on the Venture exchange. But they do tend to be small and micro and even nano cap companies, so many of them are Venture in spirit if not name.

My thesis was based upon a few pillars. First, the Canadian markets severely underperformed the US markets in 2013 and given the tie between the trade of the two countries I didn’t think this disconnect could continue forever. Second, The Canadian markets were dragged down by a rout in commodity stocks, particularly gold, and I wondered how much of the general downdraft had resulted in non-commodity businesses being dragged down unfairly. Third, the Canadian dollar had fallen 10% and I had to think that this made any kind of export based business much more attractive.

The fall of the Canadian dollar also provided me with another reason to return to my home-country market. I have done really well in the past year owning stocks in American dollars. Its been a 10% gain across the board, even if a individual stock did nothing. But this force can work two ways and I am wary of a 5% correction to the upside that causes my portfolio to take a hit. Read more