Points Are The Point Of It All

Sep 2nd, 2009 – Comment

Points International Ltd. ( PTS TSX) has built a platform that helps operators of customer loyalty programs expand services to their members and provides members with greater flexibility of how they manage the various loyalty programs they are enrolled in.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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loyalty

Hi, Lou.

I would like your opinion on Points International which I have been holding for some time… thanks. Good to see you doing well..!!

Cheers,

David

Hi David,

Points International Ltd. ( PTS TSX) has built a platform that helps operators of customer loyalty programs expand services to their members and provides members with greater flexibility of how they manage the various loyalty programs they are enrolled in.

But the hook in this story is that the performance of the company’s stock hasn’t been very loyal to its shareholders!

pts

The best you can say about PTS after looking at the chart is that the long sell off has at least flattened out but that’s cold comfort for investors who watched their capital depreciate.

The other thing to keep in mind is that the volume of trading is choppy at best which suggests that investors are shoveling shares into the market at the first sign of buying. You need increasing volume for a stock to go up. Yesterday there were 46,000 shares traded which for a $0.32 stock means that the value of the transactions was under $15,000. Clearly thin action.

pts2

The three month chart shows the spike to $0.60 and then the rapid selling that followed. The MACD does seem to be rounding a turn but given the other factors wouldn’t get me to act on the signal.

It looks to me as if the number one objective for the management team at PTS is to continue to sign up new loyalty programs and their members and find ways to increase revenue from those relationships.

My best recommendation for you David is to consider PTS as a tax loss sale as we get to the end of the year.

Happy Capitalism!

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