Cold To The Opportunity

Sep 11th, 2009 – Comment

Tough times no doubt and given the seasonal nature of the business with sales strength in the May to August period I think you would have to be cautious at the best of times.


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ice

Dear Lou:

Could you please give me your opinion on Arctic Glacier Income Fund.

Thanks:
Paul

Hi Paul,

Before I get to Arctic Glacier Income Fund I wanted to update a couple of earlier posts.

Amerigo Resources – ARG TSX – looks like the cup and handle played out – stock moved nicely to the upside and today Codelco announced an $11b program to boost mine output.

Avalon Rare Metals – AVL TSX – Carol, who is one of our readers, gave me the heads up that the Dines Letter has been touting this stock – so that helps explain some of the upside.

Okay lets look at the party ice company.

What can you say about an income trust that discontinued distributions a year ago? Tough times no doubt and given the seasonal nature of the business with sales strength in the May to August period I think you would have to be cautious at the best of times. The Q2 report that covered the period ending June 30, saw the top line weaker year on year.

agg

The three year chart shows resistance at the $2.1o . The units have to get through this level convincingly to move higher. I would also like to see better volume.

agg2

The MACD on the three month chart indicates that the upside momentum seems to be stalling.

Another factor in play is the amount of cash being spent to defend an antitrust suit in the United States. Nothing says uncertainty like litigation and investigation.

I dont think Q3 which will include the months of July and August will see a turn in revenue given that the weather patterns in AG’s prime markets may not have had campers and cottagers filling their coolers as often.

No distribution, an investigation, falling revenue, MACD turning down, resistance at $2.10, and low volume.

Not quite my bag of ice.

Happy Capitalism!

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