Thursday 24 October 2019

Canadian Stock Due For A Big Bounce

We have a new Canadian pick. Reviewing our recent success over the past month:

In "A Canadian Microcap Due For Takeoff" we had a buy signal on Condor Petroleum Inc. (CPI.TO) (CNPRF) when it was $0.26. It is trading at $0.36 now.

In "A Canadian Stock On The Rebound After Strong Financials" we had a buy signal on HIVE Blockchain Technologies Ltd. (HIVE.V) (HVBTF) at $0.21. It has come back down to $0.185 but did hit $0.24 immediately after we called it for ample opportunities for a successful trade.

In "A Canadian Stock Hitting New Highs After Announcing A Large Contract" we had a buy signal on Gatekeeper Systems Inc. (GSI.V) (GKPRF) at $0.18. It is $0.25 now.

Two big winners and one small loser is pretty good. We are up to 867 followers on our ValueTrades blog despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. You can follow us on Twitter @StockTradePicks. We have nearly 4,000 followers on Twitter as well.

While most of the time we pick stocks that are trending up on good news, this time we are putting a buy signal on a stock that has been beaten down on overreaction to bad news and looks to be in recovery mode. Valeura Energy Inc. (VLE.TO) (PNWRF) was up 7% to $0.90 on Thursday and looks ready to move a lot higher. On Monday it sank 43% from $1.67 to $0.95, leaving a big gap to fill above $1.29. It dropped on results of the fourth test at the Inanli-1, an unconventional gas play. We think there was an overreaction to the discovery of water along with the gas. The company mentioned that "the observed water production is consistent with most unconventional plays elsewhere in the world. The United States alone is producing about 50 million bbls/d of water associated with its oil and gas production and reported water disposal costs generally range between US$0.50/bbl and US$2.50/bbl. Valeura is currently testing and permitting its own water disposal wells into depleted gas fields and expects disposal costs to be closer to the lower end of the range."

The balance sheet is strong with $51 million in cash and $88 million in shareholder's equity while it is trading at a $78 million market cap at $0.90. We think that VLE can bounce substantially given its oversold nature and turnaround in its chart, the potential for a gap fill, the negative overreaction to the news that should dissipate and the strong balance sheet.

Disclosure: We are long VLE.TO

As we prepare for fall trading, we have to figure out what's next for Canadian Microcap stocks? TradeMiner identifies seasonal trends and market cycles and Microcap Millionaires finds the next big small cap plays in weed and other industries while Addicted to Profits makes trades from a Canadian perspective.

There are also some good books available such as:

Stock Investing for Beginners: Marijuana Stocks

Make Money Online With Cannabis Stocks: Learn This Basic Strategy and Build Wealth With Cannabis Stocks

Beginner's Guide to Investing in Canadian & US Pot Stocks

Marijuana Stock : Investing in Marijuana Stocks for Passive Income

How To Invest In Cannabis or Marijuana Stocks - Cannabis Investment Group

Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:

The dividend stock report from dividendstocksonline.com

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