Shore Gold Inc. a trader not a holder

Jan 18th, 2016 – Comment

Watch for trading opportunities


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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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SGF LOGO

Hey Lou,

Your Shore review was dead on for 2014, but now, two years later, the Saskatchewan government is opening the EIS produced by Shore to Public Review for 60 days. Does this mean that this ‘elephant’ diamond deposit finally hit pay dirt? Do you see Rio Tinto, De Beers or another Big Boy lurking in the background with a cheque book?

Please say yes,

Bob

 

Hey Bob,

I am happy to re-examine the case for Shore Gold Inc. (SGF TSX) and I am glad you got some benefit from my work. The last time was April 16, 2014 on a request that you made when the shares were trading for $0.24. You wanted to know if a deep pocketed player could be stalking the company for a takeover and clearly that is still on your agenda.

It’s possible that a bigger player might want to consolidate the kimberlite play in the Fort a la Corne Forest of Saskatchewan but keep in mind the deeper the pockets, the longer they can wait for the right conditions to make a move. Right now with the mining sector under pressure from weak commodity prices it doesn’t appear to be the most opportune time to make a deal given that many are writing down assets and shoring up their balance sheets. In most cases individual investors can’t afford to get to any party too early or too late.

Another audit of the charts will help determine how best to proceed with SGF.

 

 

SGF

The three-year chart tells me that the stock has been labouring under a downtrend line that started in March of 2014. There have however been trading opportunities over that period time. What we need to see is a reversal of the downtrend which hasn’t surfaced yet. We did see a bounce off the 52-week low of $.011 in early October of 2015. Unfortunately the stock hit resistance at $0.225 and pulled back below the 50 and 200-day moving averages.

 

 

 

 

 

SGF2

The six-month chart highlights the move higher that started in October of 2015 and the pullback to $0.17 by January of 2016. Once again I have to advise caution and patience with this stock. The market capitalization of $53.12 million and the average trading volume of 226,548 shares would put SGF into the speculative portion of your portfolio. Maintain surveillance for trading opportunities.

 

 

 

 

 

Next time I will put Performance Sports Group Ltd. (PSG TSX) for Mike.

 

 

 

Make it a profitable day and happy capitalism!

 

 

 

 

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