Badger Daylighting Ltd not a buy at this time

Sep 8th, 2014 – Comment

There is scant indication that this retreat is finished wresting hard earned capital from investor’s hands.


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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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BAD LOGO

Hi Lou,

Would like to ask your opinion of Badger Daylighting at these levels. I’m considering purchasing a small position for 12 to 18 months.

Thank you,

John

 

Hey John,

Funny you should bring up this company. Mike, a listeners at Talk Radio AM640,is considering working for the company and he was asking about them as well. is a Calgary based company that provides non-destructive . BAD serves the oil and gas, power, municipal, transportation, industrial, and commercial construction industries.

The company enjoyed a great run over the last few years but has had to deal with some headwinds. The pullback must be what has you wondering if now would be a good time to buy.  A scout of the charts will help identify the opportunities and risks associated with BAD.

 

 

 

 

BAD

The three-year chart was as pretty as a picture until late March of 2014 when it hit a 52-week high of $43.66. Since then a trend reversal has taken hold with the stock breaching support along the 50 and 200-day moving averages.The MACD and the RSI both signalled that selling pressure was taking the steam out of the advance as we moved into April. Currently the shares are attempting to build support near $28.00 but the death cross that surfaced in August should not be ignored.

 

 

 

 

 

 

 

 

 

BAD2

The six-month chart highlights the new downtrend that has been established and the big drop in August as the company released Q2 results that disappointed. When a stock is carrying a high multiple it has to beat the street to continue to feed the expectations monster. In this case the failure to deliver has had the expected outcome. The momentum indicators both generated sell signals in April and August although you really had to be on your game to avoid the whip in August.

The research conducted isn’t generating enough evidence to support a buy. There is scant indication that this retreat has finished wresting hard earned capital from investor’s hands. You would best be served putting BAD under  surveillance and watch for base building at these levels or a better entry point at lower valuations.

Make it a profitable day and happy capitalism!

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