Week 8 Review
I was down slightly with the markets for the week. YTD, my portfolio is up by 4.16%. I am reasonably pleased given that I have completely misread the market thus far. I was expecting a correction or consolidation, but it never came. So far, the market has been pretty healthy and buy-dip has been a correct strategy. With more than 30% of my portfolio in cash, a 4% up is not a bad result.
My view is no changing though and I remain cautious here. Having said that I did add a couple of positions here.
First I bid some HIS.TO and got filled on Friday. This is a regional department store, which is not an exactly hot sector, but I believe this one is simply too cheap to ignore. At this level, it is traded at about half of its revenue, 10x of its 2006 earnings, and the company is growing at 10% revenues, and 30% earnings. Although the department store generally is a very difficult and competitive sector, HIS.TO is focus on small markets where large department stores and box stores ignore (lack of scales). The story sounds very much similar to Northwestern Company. My initial target is $6 for next 12 month for a 20% pickup.
I also bid some PSP.V, a small company in the defense sector (timing was not very good though). While fully valued here, I think the growth potential of the company is certainly not priced in yet and if it could gets one of two contracts in the USA, it could really rock. I would be a bit cautious, given about 80% of its revenues are from Canadian government. My initial target is $1.5 and I would trim some if it hits.
I also added some WIN.TO, finally. I have been looking at this one since about $3.5 and failed to pull the trigger. I know there are a lot of institutional interests in this name, and I just want to take a ride here. I have a hard time to properly value this one, that's why I was hesitating all along.
Positions: Long: HIS.TO, PSP.V, WIN.TO
My view is no changing though and I remain cautious here. Having said that I did add a couple of positions here.
First I bid some HIS.TO and got filled on Friday. This is a regional department store, which is not an exactly hot sector, but I believe this one is simply too cheap to ignore. At this level, it is traded at about half of its revenue, 10x of its 2006 earnings, and the company is growing at 10% revenues, and 30% earnings. Although the department store generally is a very difficult and competitive sector, HIS.TO is focus on small markets where large department stores and box stores ignore (lack of scales). The story sounds very much similar to Northwestern Company. My initial target is $6 for next 12 month for a 20% pickup.
I also bid some PSP.V, a small company in the defense sector (timing was not very good though). While fully valued here, I think the growth potential of the company is certainly not priced in yet and if it could gets one of two contracts in the USA, it could really rock. I would be a bit cautious, given about 80% of its revenues are from Canadian government. My initial target is $1.5 and I would trim some if it hits.
I also added some WIN.TO, finally. I have been looking at this one since about $3.5 and failed to pull the trigger. I know there are a lot of institutional interests in this name, and I just want to take a ride here. I have a hard time to properly value this one, that's why I was hesitating all along.
Positions: Long: HIS.TO, PSP.V, WIN.TO
posted by ZIGZAG at 2/25/2007 10:21:00 AM
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