Reminiscences of a Stockblogger

Sep 10

Some Cheap Canadian Stocks (PART I)

I’ve been finding bargains harder to come by. Six months ago I was finding it almost too easy to come up stocks that were worthy of consideration. The problem then was more one of pruning. Now it seems like the stocks I find all have a bit of hair.

Rather than venturing further afar to find ideas, I’ve been looking closer to home. I have mostly ignored the Canadian market over the last year and a half. I found a couple of special situations, like Yellow Media and Extendicare, but for the most part the opportunities in the US were more compelling. But that has changed. Over the last couple of months I have been finding and adding more Canadian stocks to my portfolio. I’ve already had some good luck with the endeavour, as both Novus Energy and Ainsworth Lumber received takeover offers in the last few weeks. In the next two posts I am going to talk about some of the names I’ve been adding in my portfolio. In this one I’m going to talk again about Axia, and introduce Vecima Networks.

Axia NetMedia (AXX.to)

Axia is a stock I’ve written about on a couple of occasions (here) and lately I’ve been adding to my position in whenever it has dipped to $1.90. A major overhang has been lifted. When I wrote my last post on Axia, I highlighted the renewal of the Alberta Supernet contract in June of 2015 as my one major area of concern. Axia removed that concern last week when they announced an extension of the contract to 2018. Read more

Aug 31

8 Comments

Waiting for Novus and adding more Canadian Oil Juniors to the Portfolio (Pinecrest, Palliser)

I have been adding more Canadian oil junior positions.

If you recall, I started my endeavor into the domestic oils a month and a half ago, when I purchased Lightstream Energy and Penn West. That didn’t last long; I quickly jettisoned those names after doing more research, deciding that neither was particularly cheap, and recognizing that there were other, smaller names that were more attractive.

The first names I went with was Novus Energy and that was followed by Longview Exploration, and Rock Energy. Of the three I felt the most comfortable with Novus and made that position the largest. This week, an article came out in a Hong Kong paper (I believe if was the Economic Times) that Novus was about to be taken out by a Chinese company called Yanchang Petroleum (you can access the translated article here, and one version of the original here). The news was clearly leaked, Novus wasn’t ready for it to be released, and the stock has remained halted for the last 3 days.

If the article is to be believed, the value of the transaction is going to be a windfall for shareholders. According to the article the purchase price is $500 million, which after subtracting debt and accounting for stock options would still mean over $2 per share. Given that Novus is an 8% position for me, this would be a huge gain. Read more

Aug 26

6 Comments

The Thesis has changed but I remain Long Axia NetMedia

Last weekend I wrote a nice little piece summarizing the investment thesis for Axia NetMedia (AXX.to). Would have made a great post, was concise, clear, short. Perfect… except that the company came out and sold the asset that I had centered the entire post on.

So the post lost some of its relevance. Still, it presents a good starting point with which to discuss the post-OpenNet version of Axia, so I have included the main body of it below, followed by a discussion of what’s next for Axia.

A big thanks to @17thStCap for this idea. I actually knew of Axia from years ago, my hometown is a recipient of the Alberta Supernet, but I hadn’t looked closely at the company until @17thStCap mentioned it.

Axia trades at an enterprise value of $95 million (Note: actually $70 million post-OpenNet transaction), and yet I think that the assets it owns that provide fibre broadband transport services in France Alberta and Singapore, are worth quite a bit more than that.

Let’s focus on Singapore for the moment, as I believe it is the immediate catalyst. The company owns 30% of a partnership called OpenNet (look here for an overview of OpenNet), which provides fibre to 1.1 million residential and 26,000 commercial premises as of the end of the June quarter. OpenNet grew its top line and EBITDA by just slightly less than 100% in the last year. In the month of June alone, fibre broadband subscribers increased 31,000 to 380,000. Read more

Aug 18

4 Comments

Week 111 Portfolio Update: When Things Aren’t Working…

Portfolio Performance

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

Shake-up

In a previous post about Walker & Dunlop I described the consequence of being on vacation while the company announced poor results, which was that I was not able to take advantage of a clear selling situation. The same was the case for Dex Media.

In the past I used the term “good enough investing” to describe what I’m trying to do with my portfolio. I work a full time job, have a life and need a break now and then, and all that means I just can’t be on top of everything. I try my best but I have found it necessary to employ techniques to mitigate this. In particular, I sell stocks when things aren’t working out.

While I’ve had my share of winners over the past month and a half (AIQ, NVS, NCT, NRF, IQNT to name a few), I’ve also had my share of losers (NKO, EXE, VTNC, and the above mentioned duo) with the result being that my portfolio has done not much of anything. While I remain hopeful that both Niko Resources and Extendicare eventually pan out, the fact is that thus far they haven’t. Read more