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| Blue Pearl Mining (BLE-TSX) $9.31 - An Excellent Way to Play the Molybdenum Market. |
| Thursday, December 07, 2006 |
Well, I just got back from vacationing in Whistler B.C. and it's time to get back to real life, trading and more importantly, MicroCapMayhem. I know you all missed my excellent commentary and were totally lost without me, Right? I hope? Oh well, let's get to the stock.
My play of the day may be considered a "CORE HOLDING", or one could play it as a trade, lasting anywhere from the next few weeks to the next couple of months.
If you haven't already heard of the stock, it is called Blue Pearl Mining (BLE-TSX $9.31) and is up approximately 1300% this year alone. Holy Jeepers! Blue Pearl recently acquired Thompson Creek Minerals, a private moly company, which automatically catapulted BLE to the world's fifth largest molybdenum producer and the world's largest publicly traded pure-play molybdenum company. Usually molybdenum is mined as a copper by-product. This is not the case with Blue Pearl, as they are a pure-play moly company.
Even though this stock is slightly out of my normal buy criteria - it costs $9.31 - I feel that it is the best way to play molybdenum at the moment.
If you aren't familiar with molybdenum, refer back to my articles on Roca Mines, one of our other "CORE HOLDINGS" with absolutely excellent prospects and potential for 2007.
Blue Pearl is poised to move higher in the coming weeks and months. I know what you are saying, "it's already up so much, is it really going to keep going?” Well, the answer is that there are many catalysts, which will drive Blue Pearl higher, asides from its outstanding fundamentals and low cash-flow multiples.
Some of these drivers include:
• A recent inclusion in the S&P/TSX composite index, which becomes official on December 18 and will open BLE up to more funds.
• They are expecting a feasibility study in early 07 for their 100% owned Davidson project, which is Canada's largest molybdenum mine.
• Analysts are going to begin covering BLE.
• Thompson Creek alone cash-flows $1,000,000 a day after taxes.
• Chart looks fantastic.
BLE's management team has an excellent track-record as they were behind Silver Wheaton Minerals (SLW-TSX), another success story.
I’d advise that anyone interested in playing the molybdenum market take a closer look at this gem. |
posted by MicroCapMayhem @ 10:25 PM   |
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| 3 Comments: |
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What is the minimum amount of volume you would consider for a Canadian penny stock ? Good picks so far, keep up the good work !
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thanks for the compliment!
a lot of the time on MCM I recommend stocks for swing trades that are trading large volume because of a material news event or driver of some sort. In this case, volume is not a factor, as they are usually trading millions of shares a day.
For stocks that aren't going ballistic at the moment, I would look for enough liquidity to get in and out comfortably. As low as 90,000 shares a day is not abnormal. The thing is, most stocks I trade go through periods of increased and decreased liquidity, based upon material news events, or lack of.
Basically, I would just try to avoid stocks that trade under 50,000 a day and especially stocks, which go through days where they don't trade at all.
I have no real set guide lines and I always judge each stock independently.
Some stocks trade huge volume, and ya, you can get in and out, but the stock hardly moves, where as some stocks trade small volume but run like crazy. This is why you have to treat each situation individually.
So, I really have no minimum, I just want to make sure I can get in and out comfortably and make sure that at some near future date, an event of some sort is going to increase the liquidity enough for the share price to go up and also provide me with an ideal exit strategy.
Hope this helps.
MCM
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What is the minimum amount of volume you would consider for a Canadian penny stock ? Good picks so far, keep up the good work !