WiLAN Inc. a sell.

Mar 5th, 2012 – Comment

Given the downtrend in play and the failure of the momentum indicators to suggest that a shift towards increased buying is upon us I would say that at this point WIN is a sell.


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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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Lou,

What are your thoughts on WIN.T

Buy, hold, or sell and why?

Thanks,

Andrew

 

Hey Andrew,

Wi-LAN Inc. (WIN TSX) is a name I first became aware of in the early 1990′s when they were installing wireless connections at drilling sites in the Alberta oil patch. They have made some significant changes to their business model since then, as they have become a repository of intellectual property rights. The company controls 3,000 patents on various technologies and is constantly adding to that total. Once in control of the intellectual property WIN then looks to reap licensing revenue from those making use of their innovations.Like many of the technology darlings of 1999 it is not likely that we will ever see WIN trading above $80.00 in the very near future but it was a sweet and exciting time.

Let’s run the charts and perhaps we can provide answers to your questions.

 

 

 

 

The three-year chart is screaming that there is a well-established downtrend in play and that a death cross surfaced as we came into mid October of 2011. WIN had a great run from the March 2009 lows but that party has been over for six months. What is also evident is that the shares have been building a base at $5.25. The question is can the stock catch a bounce off these levels and move higher?

 

 

 

 

 

 

The MACD and RSI on the six-month chart are not providing any sense of direction at this time. The MACD has generated a number of profitable buy and sell signals since the fall so make sure to include it as part of your analysis. Given the downtrend in play and the failure of the momentum indicators to suggest that a shift towards increased buying is upon us I would say that at this point WIN is a sell. The company will release its Q4 results on March 7, 2012, which could shift momentum but at this point I am not seeing it.

 

Make it a profitable day and happy capitalism!

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