Mosaic Capital Corp. suffering with western Canada

Oct 9th, 2015 – Comment

The 6.06% dividend yield could be a siren’s call


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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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M LOGO

Hi Lou,

Could you please give me your critique on Mosaic Capital, as it seems interesting.

Thanks,

Al

 

Hey Al,

Thanks for the assignment. This will be my first analysis of Mosaic Capital Corp. ( M TSXV). The company owns a portfolio of operating companies with exposure to infrastructure, printing, oil and gas services, technology, and real estate. The market cap for the stock is $55.9 million and the average daily volume over the last three months is 3,056 shares. These factors would place this investment in the speculative portion of your portfolio.

Another issue you have to evaluate is the concentration of their assets in Western Canada. With the price of oil in the doldrums you need to manage your expectations as to how their portfolio will perform under these conditions and if adversity might impinge the 6.06% dividend yield.

A probe of the charts will focus on the trend, support, and resistance that influence M.

 

M

The three-year chart depicts an established downtrend that started in November of 2014 as the stock topped out near $14.00. By December there was a break below both the 50 and 200-day moving averages. In January of 2015 a death cross formed and through the year the shares have met resistance along the moving averages.

What is also evident on the chart is that M is a thin trader with days that show no trades at all. The best that I can see at this point is that there is some base building near $6.00.

 

 

 

 

 

M2

The six-month chart is no oil painting. It highlights the thin trading and resistance along the 50-day moving average. With the established downtrend, the death cross, and choppy trading I would advise that you conduct extensive due diligence before chasing this stock. Often we are attracted by a better than average dividend that ignores how a stock is trending. The trend is your friend until it ends and in this case the trend is down.

There is no evidence that we can expect a trend reversal in the near term.

 

 

 

 

 

Next time I will put the scope on the charts of Corby Spirit & Wine Ltd. (CSW.B TSX) for Joe.

 

Make it a profitable day and happy capitalism!

 

 

 

 

 

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