What’s your take on Badger? Is it still a BUY?
Thanks for the assignment. I’m not sure who is touting the shares as a buy but any analysis, including my own, should be viewed as a call for further due diligence. I always look forward to accessing as much research as possible so I can add to my evaluation of the opportunities and risks associated with an investment.
This will be the second time that I inspect the case for Badger Daylighting Ltd. (BAD TSX). The last was on September 8, 2014 on an request from John. The shares were trading for $29.12 and John wanted my opinion to help in his consideration of a small purchase with a 12-18 month investment horizon. The evidence at hand indicated that the stock had been pulling back from a 52-week high of $43.66 in late March of 2014. As the shares retreated they breached support along the 50 and 200-day moving averages and were attempting to build support near $28.00.
It was advised that there wasn’t enough evidence to support a buy and that the best course of action would be to continue to surveil the stock and see if the base building would continue or if a better entry point might emerge. In hindsight that was the correct call as BAD touched $24.76 by mid October 2014.
Another examination of the charts will help form my opinion on this stock.
The three-year chart illustrates the 52-week low of $20.32 that BAD hit in January of 2015. What is also evident is that the downtrend that started in late March of 2014 has been broken. Make note of the resistance that has formed at $30.00 and that since April multiple attempts to start a new up leg have failed. Currently the stock has breached support along the 200-day moving average.
Finally the patterns on the chart would suggest that a strategy of trading for profit would best serve investors.
The six-month chart illustrates the various buy and sell signals generated by the MACD and the RSI. The most pronounced was the buy signals in January as BAD come off the 52-week low. There does seem to be some base building near $26.00 but there are no clear indications that we can expect a new advance.
Next time I will investigate the charts for Trinidad Drilling Ltd. (TDG TSX) for Andy.
Make it a profitable day and happy capitalism!