I find it bullish when the market makers are willing to pay above the high of the day just to buy a stock. The bid today on MGMXF hit .28 with a depth of 51,100 with no takers. AXY on the Toronto exchange recently took in some 21.8 million on the bid of .30 Canadian (huge volume), and now the Canadian bid is holding above that at .31. I sense support and a potential bullish move. I don't know where the 21.8 million shares went. I have seen huge volume taken in on some other stocks also, and the volume never seems to go anywhere, yet the result is bullish over the next few weeks.
This is a complicated company to digest, because they buy and sell assets in addition to operating the power plants. It may not be readily apparent how each transaction affects the bottom line, but I don't think they are taking a loss on each transaction. They made a nice profit on the sale of their partial interest in Dokie 1, so I assume they are making money on each transaction, otherwise, why do it.
They give up a percentage of a project in a JV, but they can retain a percentage without putting up as much capital, since Alterra provides development planning and management. This gives Alterra a percentage beyond what they could expect with just a cash contribution alone, and is an efficient way to grow with less capital. The trick to developing a joint venture is to do the planning and bring it closer to reality, so it becomes more valuable by the time they do the JV. By doing some preliminary planning they can effectively sell off a percentage of the JV at a higher price. This is similar to doing the initial work on a development and subdividing, then selling off the subdivided parcels at a higher price. They have a nice pipeline of projects, and they do seem able to pull off the financing. But for the writedown last quarter, they would have been profitable. One of these days people will see that the company is profitable. I am thinking that is what is behind the recent market activity.
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