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Symbol IBG.UN
Shares Issued 8,567,778
Close 2006-11-21 C$ 11.99
Recent Sedar Documents
IBI Group sues Laxton over lease "bullying"
2006-11-21 21:03 ET - Street Wire
by Mike Caswell
Vancouver architectural firm IBI Group is suing its landlord, lawyer John Laxton, for allegedly "bullying" it to leave its downtown office building. According to a lawsuit made public Tuesday, Mr. Laxton is eyeing residential use for the structure, motivated by the favourable real estate market in Vancouver.
IBI Group, a subsidiary of IBI Income Fund, says it leased the seventh floor of the West Pender building, called the Evergreen, on Aug. 5, 2003. Since July, 2004, Evergreen has repeatedly sought to repudiate the lease, IBI says.
"In so acting, Evergreen has ... embarked on a campaign of harassment against IBI Group with the intention of forcing IBI Group to give up possession of the premises," the suit reads.
IBI's five-page complaint names Mr. Laxton, his company Evergreen Building Ltd. and accountant Raymond Eng as defendants. The company is seeking a court order confirming its lease, damages for breach of contract and nuisance, and costs. Mr. Laxton has not responded to the suit and IBI has not proven its allegations in court.
The Evergreen building
The Evergreen building, designed by award-winning architect Arthur Erickson, was built in the 1980s. Vancouver City Council designated it a heritage building this April, making any development difficult. According to city documents, Mr. Laxton applied to convert the building to an all-residential structure by adding four storeys and refurbishing the existing office space
Companies featured in the current edition of the newsletter: CDSS, EEEI, ENZ, FLWE, FMTI, IMMG, ISON, NTST, OXMI, SFP, TEGRE
With investors increasingly turning to year-end activities like the key holiday shopping period, the market turned in a mixed performance last week during the holiday-shortened Thanksgiving week. With few economic or earnings reports, activity was muted, with the Nasdaq turning in the best performance. The Dow ended the week down 62 points, reducing its year to date gain to 14.6%. The S&P 500 was also down nominally for the week, decreasing its year to date gain to 12.2%. The Nasdaq ended the week up 14 points, increasing its year to date gain to 11.6%, while the Russell 2000 finished the week up 3 points, increasing its year to date gain to 17.7%.
One area that appears to be supporting gains in the market has been a high level of merger and acquisition activity. Last week, the Nasdaq made a bid for the final portion of the London Stock exchange that it did not own and Freeport-Morgan made $26 billion dollar bid for Phelps Dodge. Already this year, Special Situation companies Netsmart Technologies (NASDAQ: NTST) and Citadel Security Software (OTCBB: CDSS) have been subject to takeover offers, and Salton, Inc. (NYSE: SFP) has essentially put itself “in play” through the announcement that it had entered into negotiations to sell itself to one of its largest investors, suggesting that the merger frenzy has not been the exclusive domain of larger companies. With private equity investors aggressively pursuing targets at unprecedented valuations, further activity could support additional gains for stocks.
With stocks declining the day after Thanksgiving for the first time in 15 years on concerns about a sharp drop in the dollar, what does the rest of the year portend for equities? Certainly, the key elements that have supported robust gains in the market this year will continue to remain a focus for investors…energy and interest rates. Last week, crude rose slightly less than $1, and with warm weather throughout much of the country this week, supplies should remain abundant. Likewise, the interest rate environment is expected to remain benign, with only a December 12th Fed Meeting left for the year. Expectations are that rates will remain unchanged. While these factors should help underpin stocks, stocks could experience a short-term pullback in light of frothy sentiment indicators. The VIX closed below 10 last week for the first time in 14 years.
What should investors look for in the upcoming week? There will be few companies posting results that have the ability to impact the market. Expect to see results from Tiffany & Company (NYSE: TIF) Wednesday before the bell. Earnings announcement activity will pick up slightly on Thursday with announcements from Del Monte (NYSE: DEL), Dollar General (NYSE: DG), and HJ Heinz (NYSE: HNZ). Warner Music Group’s (NYSE: WMG) before the bell announcement on Friday will close out the week for earnings reports.
With the Thanksgiving holiday over, the economic calendar will be busier this week. The activity is all about spending and begins Tuesday beginning with the announcement of October Durable Orders before the market opens. Announcements for November Consumer Confidence and October Existing Home Sales will come in mid-morning Tuesday. Investors can expect to see the preliminary announcements for the Q3 GDP and Chain Deflator before the bell Wednesday and October New Home Sales, along with weekly Crude Inventories, will be announced mid-morning Wednesday. The most notable announcement for Wednesday will be the release of the Fed’s Beige Book following the close of the market. It will be an active Thursday morning with before the bell announcements of both October Personal Spending and Personal Income, as well as the weekly Initial Unemployment Claims. Investors can expect to see announcements for the November Chicago PMI and the October Help Wanted Index mid-morning Thursday. November Truck and Auto sales will be announced at midnight on Friday. Look for Friday morning announcements for October Construction Spending and the November ISM Index.
The conference schedule ramps up next week with the two-day Gold and Precious Metals Investment Conference in San Francisco beginning Sunday. The two-day FBR Investor Conference at the Grand Hyatt New York, as well as the two-day CIBC World Markets Mid and Small Cap “Best Ideas” Conference at the Millennium Broadway Hotel in New York will begin Tuesday. The four-day Credit Suisse Annual Technology Conference in Scottsdale, the two-day Merrill Lynch Health Services Investor Conference in New York, the two-day JP Morgan Consumer and Retail Conference in New York, and the two-day Lazard Third Annual Life Sciences Conference at the New York Palace Hotel, also begin Tuesday. Enzo Biochem, Inc. (NYSE: ENZ) will present Tuesday at 4:30 p.m. Piper Jaffray is scheduled to hold its 18th annual Healthcare conference in New York. The three-day conference begins Wednesday. Other Wednesday conferences include the two-day Bear Stearns Commodities and Capital Goods Conference in New York. The conference schedule for the week wraps up Thursday with the single-day Calyon Securities US Utilities and Energy Merchant Conference in New York.
With the calendar turning towards December, Forbes Medi-Tech (NASDAQ: FMTI), a life sciences company focused on the prevention and treatment primarily of cardiovascular disease, is expected to report results from its Phase II trial of its cholesterol-lowering drug, FM-VP4 shortly, as topline results from this trial are expected to be released within the first two weeks of December. The primary efficacy objective of this trial is to determine the effect of two doses of FM-VP4, 450mg and 900mg, given for 12 weeks, compared to placebo, on low density lipoprotein-cholesterol (LDL-C). The goal of this trial is to demonstrate a minimum of 15% reduction from baseline in LDL-C at Week 12. FM-VP4 is part of the fastest growing category within the anti-dyslipidemics market called cholesterol absorption inhibitors (CAIs). CAIs are less potent than statins, but can provide enhanced safety as well as a synergistic efficacy in combination therapy. Sales of Merck/Schering’s product Zetia® exceeded $1.4 billion in 2005, despite its launch just two years ago. Some may recall that shares of FMTI soared to $8.67 in March, 2004 as investors anticipated favorable results from the first Phase II trial of FM-VP4 conducted in Europe. However, shares lost more than half of their value in early April of that year, after the company said that the reduction in LDL cholesterol, as compared to placebo, was 11%, making it inferior to Zetia. 33% of the subjects given 400 mg per day achieved a greater than 15% LDL reduction. Additionally, the time-response to FM-VP4 indicated that LDL cholesterol levels may continue to decrease when given to patients for longer than 4 weeks, the duration of the completed trial, and that optimal efficacy may not have been achieved in the first trial. If data from the first study proves correct, than the current double-blind study, which is for a longer time period (12 weeks versus 4) and at higher dosage levels (450/900 mg compared to 200/400/800 mg) than the previous one, could lead to a superior result. Shares ended the week at $2.10, down 20 cents.
Volume Alert: Shares of Isonics Corporation (NASDAQ: ISON), a developer of innovative solutions for the homeland security and semiconductor markets, surged 30% on more than 5 times average volume after the company announced that it expects to report unaudited revenue for its semiconductor products and services segment of approximately $3.5 million for the quarter ended October 31, 2006. This represents a 188% increase compared to the quarter ended October 31, 2005. Isonics also announced last week that the company’s partner DualDraw LLC has placed a purchase order for the upgrade of six of DualDraw’s AirCHX mail inspection workstations. The workstations at various federal government facilities will be upgraded with chemical and explosive capabilities using Isonic’s ion mobility spectroscopy instruments. The first two AirCHX upgrades have been completed and the remaining four units are scheduled for installation during the remainder of November. The IMS-equipped AirCHX workstations are able to identify homemade explosives, toxic chemicals and chemical warfare agents. Isonics is confident in the ability of the company’s “sniffer” technology to create an additional level of security for a variety of products, including personal portals and x-ray baggage technology. The order represents the first significant sales of Isonics’ homeland security products to protect federal government facilities. Shares ended the week at $0.80, up $0.20.
Electro Energy, Inc. (NASDAQ: EEEI), a developer and manufacturer of advanced rechargeable batteries, posted improved third quarter results for the period ended September 30, 2006 last week. The company reported revenue of $1.2 million a 26.1% increase versus the year earlier period. Net loss for the third quarter was $1.4 million or $0.06 loss per share, compared to a loss of $0.7 million or $0.05 per share for the same period in 2005. Adoption of SFAS 123 for stock-based compensation resulted in a non-cash expense of $247,084 in the third quarter. The third quarter net loss was primarily a result of increased research and development expenses associated with the company’s application for its proprietary bipolar nickel metal hydride batteries to hybrid electric vehicles and plug-in hybrid electric vehicles, the company’s preparation for manufacturing operations of the Gainesville, Florida Facility and bipolar lithium for advanced military applications. With a significantly stronger infrastructure, the company is now well positioned to support higher levels of sales. The stock ended the week up 27 cents at $1.54.
Netsmart Technologies, Inc. (NASDAQ: NTST), a leading provider of enterprise-wide software for health and human services organizations, announced that it entered into a definitive agreement to be acquired by Insight Venture Partners and Bessemer Venture Partners. The transaction is valued at approximately $115 million. The board of directors of Netsmart, acting on the unanimous recommendation of a special committee of independent directors, approved the agreement and will recommend that Netsmart's stockholders approve the merger. Under the terms of agreement, Netsmart Technologies shareholders will receive $16.50 in cash in exchange for each share of Netsmart stock. Members of the executive management team of the Netsmart will take part in the ownership of the company. The company believes that the deal will permit it to better balance for anticipated growth, both naturally and through the acquisition. This will also provide the company with easier access to resources for pioneering product development and technology innovations to better serve customers. The deal is expected to close in early 2007. The company also announced last week that it has signed a contract with the State of Iowa Department of Human Services totaling nearly $2.5 million over a six-year period to provide an integrated behavioral health information system for six DHS facilities. Netsmart's CCHIT CertifiedAvatar 2006 software will replace the census, billing, clinical, and scheduling and reporting modules of a State of Iowa DHS legacy software system. The contract also includes professional services for project management, implementation services, data conversion, training and access to extensive clinical information from the Wiley Treatment Planning Libraries via Avatar Clinician Workstation. Avatar is an integrated behavioral software solution. The stock ended at $16.24, up $1.54 from last week.
Oxford Media, Inc. (OTCBB: OXMI), a leading developer of scalable, turnkey hybrid digital VOD and PPV entertainment systems, announced last week third quarter results for the period ended September 30, 2006. Oxford had revenue of $5,667,790, a 176.6% increase compared to $2,049,287 for the same period in 2005. The increase in revenue was primarily due to the acquisition of SVI. Gross profit increased by 403% from $0.6 million in the 2005 third quarter to $3 million in the 2006 third quarter. The Company lost $0.9 million as compared with $2.2 million for the preceding quarter. Shares ended the week at $0.36, down $0.03.
Terra Energy & Resource Technologies, Inc. (OTCBB: TEGRE), an energy technology company that combines satellite-based technology with traditional exploration services, which does business through Terra Insight Corporation, its wholly owned subsidiary, announced that Terra Insight delivered its first stage STeP report on a 1,000,000 acre oil and gas exploration project in Eastern Turkey, pursuant to a service contract with Calik Enerji Sanayi ve Ticaret, A. S. The agreement provides for the company to receive a 20% working interest in the project, as well as undiscounted rates to be paid out of future returns of the project. Under the contract, Terra Insight is providing studies of the area of interest, for identification of prospective drilling sites and mapping of hydrocarbon anomalies using proprietary STeP technology. The company believes that the role of its STeP technology in the search for gas and oil, as well as other minerals, without depth limitations, will become increasingly recognizable to leading oil and gas exploration companies. Shares ended the week at $0.27, down $0.02.
IMPART Media Group, Inc. (OTCBB: IMMG), an innovator in the creation of out-of-home digital advertising content and information network management, announced a 16% increase in revenue to $1.7 million during the three months ended September 30, 2006. The increase was primarily due to higher media services revenues of $659,000 derived as a result of the company's acquisition of E&M Advertising, Inc. and its affiliates in February 2006 and increased recurring revenues of approximately $90,000 from the acquisition of Media SideStreet Corp. in June 2005. This was offset by a decrease of $462,000 in revenue from sales of commodity, audio-video equipment. The decrease of $462,000 in revenue was primarily due to a shift in Impart’s long-term business strategy, which was implemented in the third quarter of 2005. The E&M Advertising business unit showed its best performance to date, with gross billings of approximately $6.6 million. The stock ended the week down a penny at $0.52.
Junior energy company Fellows Energy Ltd. (OTCBB: FLWE) announced that the company, with its 50% joint venture partner Thunderbird Resource Corp, had successfully completed a considerable portion of the second phase of its workover operations on its Carbon County project. Fellows' preliminary work, which began in early May, on the GCS 1A-18-14-8 and the GCS 1-19-14-8 wells doubled production from approximately 20 million cubic feet per month at the time of the acquisition in March to 40 million cubic feet per month beginning in July. With the second phase of workovers nearly completed, it is estimated that field production could increase in excess of 60 million cubic feet per month. Preliminary reserve report estimates by the independent engineering firm of MHA & Associates have assigned a total of 7.46 billion cubic feet of gas to proven reserve categories, as a result of the success of the workovers and the consistency of the production achieved since Fellows assumed operations in March 2006. Proven reserves are made up of proven developed producing, proven developed non-producing, and proven undeveloped categories. This represents more than a 250% increase over the reserves in the proven category at the time of the acquisition of the project in March 2006. Proven reserves plus probable and possible reserves are estimated to be in excess of 20 billion cubic feet. Shares ended the week at $0.07, down $0.01.
AP Analysis: Firms Crimping Oil Supplies
Sunday, November 26, 2006 12:13 AM EST
The Associated Press
By JEFF DONN
BAKERSFIELD, Calif. (AP) — You'd think it was Texas. Dusty roads course the scrubland toward oil tanks and warehouses. Beefy men talk oil over burritos at lunch. Like grazing herds, oil wells dip nonstop amid the tumbleweed — or even into the asphalt of a parking lot.
That's why the rumor sounded so wrong here in California's lower San Joaquin Valley, where petroleum has gushed up more riches than the whole gold rush. Why would Shell Oil Co. simply close its Bakersfield refinery? Why scrap a profit maker?
The rumor seemed to make no sense. Yet it was true.
The company says it could make more money on other projects. It denies it intended to squeeze the market, as its critics would claim, to drive up gasoline profits at its other refineries in the region.
Whatever the truth in Bakersfield, an Associated Press analysis suggests that big oil companies have been crimping supplies in subtler ways across the country for years. And tighter supplies tend to drive up prices.
The analysis, based on data from the U.S. Energy Information Administration, indicates that the industry slacked off supplying oil and gasoline during the prolonged price boom between early 1999 and last summer, when prices began to fall.
The industry counters that it's been working hard to meet untiring demand. It faults output quotas set by Mideast oil powers, global competition for oil from booming economies like China's, and domestic challenges like depleting wells, clean-air rules, and hurricanes. They do make things harder.
Yet the AP analysis found evidence of at least an underwhelming industry performance in supplying the domestic market, when profits should have made investment capital plentiful:
—During the 1999-2006 price boom, the industry drilled an average of 7 percent fewer new wells monthly than in the seven preceding years of low, stable prices.
—The national supply of unrefined oil, including imports, grew an average of only 6 percent during the high-priced years, down from 14 percent during the previous span.
—The gasoline supply expanded by only 10 percent from 1999 to 2006, down from 15 percent in the earlier period.
The findings support a conclusion already reached by many motorists. Fifty-five percent of Americans believe gas prices are high because oil companies manipulate them, a Pew Research Center poll found in October.
Even in Bakersfield, which lives off oil, many suspect that the industry goes easy on supply for its own reasons. "They ain't trying: that's more money for them," snorted JaRayle Madden, a construction worker filling up his little sedan recently at a local Shell station.
———
This fast-growing city of 300,000 shuddered in November 2003, when Shell confirmed it would soon close its local refinery. Plant workers, consumer activists and public officials rose up in resistance, firing off letters and demanding meetings.
The 70-year-old refinery only produced 2 percent of California's gasoline and 6 percent of its diesel fuel. Yet opponents feared its demise would push up prices in the tight markets all along the West Coast.
In these circumstances, surely the plant was worth something to someone, if not to Shell. After losing $57 million mostly in the aftermath of the Sept. 11 terrorist attacks, the refinery was making money again, Shell acknowledged.
Though set back temporarily by the attacks, the oil business has profited handsomely since then. For example, the biggest six refiners — Shell is only No. 12 nationally but powerful in California — rang up $400 billion in profits since 2001, according to the consumer group Public Citizen and corporate reports. Even compliance with complex clean-air rules hasn't spoiled business.
The industry also protected profits by not building any new refineries, instead expanding existing ones when it could.
Shell portrayed its Bakersfield refinery as old and unfit. One executive said there was "simply no longer an adequate supply of crude oil" nearby.
Drillers across the country complain of maturing wells that are slowly running low. Gas or liquid is sometimes injected into reservoirs at higher cost to keep up the flow.
"The industry is working very hard," says Joe Sparano, who heads the Western States Petroleum Association representing Shell and other drillers, refiners and marketers.
However, oil reserves are expected to last for decades around Bakersfield and elsewhere, according to industry and government estimates. Fresh national reserves are found each year. To make up for older wells, oil companies regularly drill new ones — about 9,800 last year. Underground discoveries and technological strides have kept domestic reserves at the same level as in 1999.
With demand growing, though, the United States has imported an expanding share of its oil from abroad — and quotas kept by Mideast nations do lift its price.
It's also true there's a new big buyer of oil: China, with its flourishing economy. Yet even China hasn't outstripped the world's capacity to deliver more oil, at least so far. Since 1999, world supplies grew four times more than China's imports, federal data show.
Imports were impractical at inland Bakersfield, Shell explained. Lynn Laverty Elsenhans, the head of Shell Oil Products US, said the refinery here just wasn't viable anymore.
"For this reason, we have not expended time or resources in an attempt to find a buyer and do not intend to do so," Elsenhans wrote to U.S. Sen. Barbara Boxer, D-Calif.
Shell's blunt tone began to trouble opponents of the plan. Union officer Ed Huhn, a former refinery worker who was trying to keep the place open, began to wonder if it was folly. "They were trying to discourage anybody from buying it," he says.
Skeptics like U.S. Sen. Ron Wyden, D-Ore., got more vocal. They began to suspect that Shell wanted to shut the refinery to sell pricier gas from its bigger refineries elsewhere in the region. By taking a hit at Bakersfield, maybe Shell could come out ahead.
"They were trying to squeeze the market in every possible way," Wyden insists.
Shell spokesman Stan Mays denies that. He says it's "impossible to speculate" on whether Shell would have profited from closing the plant.
But he indirectly acknowledges that Shell didn't intend to make the refinery attractive for a competitor: "Who's going to want to buy it? We're not going to give crude supply with it."
———
It turns out that the industry exerts quite a bit of control over supply.
For one thing, it decides to invest in new wells and refining equipment — or not to. Though reserves have kept pretty steady, the oil industry taps those resources to varying degrees from year to year. The long price run-up first took off as the number of new wells abruptly dropped by a total of 59 percent in 1998-99, federal records show.
One consumer advocate, Mark Cooper, refers to industry-induced supply bottlenecks as "strategic underinvestment." He views references to "discipline" in annual corporate reports as a code word for going easy on supplies.
"Anytime someone talks about `discipline,' this suggests to me that they have market power. They're choosing what investments to make," says Cooper, research director for Consumer Federation of America.
There's evidence he may be right. A 2001 study by the Federal Trade Commission reported that some firms were deciding to "maximize their profits" by crimping supply during a Midwestern gasoline price spike. One executive told regulators "he would rather sell less gasoline and earn a higher margin on each gallon sold."
This year, the FTC reported that some oil companies were storing oil, instead of selling it right away, to await higher prices anticipated in the future.
The industry has shelved an average of 21 percent more unrefined oil from the start of 2004 through last June, the AP analysis indicates. Last spring, stocks of shelved crude reached their highest level in eight years, despite the fabulous riches at hand in high prices then.
Such a strategy could conceivably extend to drilling too. "If you think prices 10 years from now are going to be $100 a barrel, you might not be that enthused about producing as much as you can now," suggests energy economist Allan Pulsipher at Louisiana State University.
However upsetting to drivers, such tactics are usually viewed as legal. "A decision to limit supply does not violate the antitrust laws, absent some agreement among firms," regulators wrote in one FTC report.
Also, individual companies are freer to bottle up supplies without fear of losing business to competition, because fewer companies now control a production choke point: refining. Thanks to mergers, the top 10 companies now control three-quarters of national refining capacity, up from half in the early 1990s.
"A handful of very large companies realize it's in their mutual interest to keep prices as high as possible," says Tyson Slocum, an energy expert at the consumer group Public Citizen, founded by Ralph Nader. "I don't think they're sitting around a table smoking cigars and price fixing, but I think there are sophisticated ways to manipulate the market."
In Bakersfield, government regulators eventually began to nose around, wondering if Shell hoped to game the market. But the company finally hired an investment banker to scout buyers. In January 2005, it announced a sale to truck-stop operator Flying J, of Ogden, Utah, which also runs a small refining business. The price was kept secret. Shell did nothing wrong, federal regulators later decided.
Since the sale, drillers and refiners have been making profits as never before.
The back-to-back hurricanes along the Gulf Coast in 2005 crippled about a third of the country's oil-output capacity and a fifth of its refining — but only temporarily. For all its talk of supply challenges, the industry quickly arranged for more imports and avoided outright national shortages. But prices jerked upward.
In Bakersfield, Flying J's 350 refinery workers now process 2.7 million gallons of oil a day — as much as Shell did — in the churning nest of boilers, piping and stacks venting six stories above the scrubland.
"It's still a good refinery, good people, a lot of money to be made in the long term," says Andy Wheeler, the engineering manager transplanted from Louisiana. "There's still plenty of oil locally to produce."
The new owner won't discuss current profits but acknowledges making money. With limited oil from Shell, Flying J has kept its boilers busy with crude from other wells, also right here in the valley.
In fact, the refinery is so full of promise that Flying J has decided to spend several hundred million dollars to nearly double its gasoline output. It hopes to make about $85 million more a year in profit.
"Shell, in the last few years of operation, didn't invest any money into the place," says Wheeler, tooling past its giant storage tanks in his shiny SUV.
But the refinery's new bosses, says manager Gene Cotten, are "comfortable enough with the long-term crude supply to make that investment."
That's a real funny one!
From Sunday afternoon to Monday afternoon we expect : 15-20 cm of snow
A bored pro on Vodka!
What a combo.
Going to go boost a few Fords.
The pro is talkin' Vodka over there now.
It's going to get ugly.
Undervalued Stock #2 ========== ---- Helix Energy Solutions Group, Inc. (NYSE: HLX) ---- Insider Name: Owen E. KratzInsider Position: Executive ChairmanInsider Action: 70,000 shrs on 11/17/2006Insider Total Holding: 5,090,979 shrs -------------------------------------------------------Undervaluation Merits... P/E Ratio = 11.58 (Industry Average 19.12)P/S Ratio = 2.43 (Industry Average 3.59)P/B Ratio = 2.10 (Industry Average 4.56)P/CF Ratio = 7.57 (Industry Average 13.24) Industry: Oil Well Services & Equipment -------------------------------------------------------Other Drawbacks... Missed Analyst Earnings Estimate Last Quarter ---- Helix Energy Solutions Group, Inc. (NYSE: HLX)
Undervalued Stock #1 ========== ---------- Dominion Resources, Inc. (NYSE: D) --------- Insider Name: Mark J. KingtonInsider Position: DirectorInsider Action: 2,000 shrs on 11/22/2006Insider Total Holding: 11,677 shrs -------------------------------------------------------Undervaluation Merits... P/E Ratio = 17.6 (Industry Average 21.9)P/S Ratio = 1.63 (Industry Average 1.67)P/B Ratio = 2.12 (Industry Average 2.91)P/CF Ratio = 9.10 (Industry Average 10.50) Industry: Electric Utilities -------------------------------------------------------Other Merits... Dividend Yield = 3.40% -------------------------------------------------------Other Drawbacks... Recent Analyst Downgrade ---------- Dominion Resources, Inc. (NYSE: D)
Won 10 bucks. and the reload.
06 09 14 34 35 39 40
01 07 17 20 32 40 43
01 07 23 34 39 44 46
03 11 15 33 36 37 46
03 16 22 25 34 43 47
08 18 21 32 38 41 47
38 39 35 51
05 13 14 30 34 35 36
02 03 18 23 24 36 47
02 11 17 18 39 41 47
05 12 13 29 36 43 45
12 13 17 18 29 35 47
07 14 17 26 36 45 47
01 38 78 91
10 12 21 24 37 40 44
02 09 17 18 27 40 42
02 09 12 18 20 28 37
07 11 13 17 31 32 41
05 08 17 30 31 32 41
02 09 13 16 35 39 43
16 61 81 83
I'm holding this one too.
http://www.investorshub.com/boards/read_msg_ig.asp?message_id=14706563
Like it very much and I'm holding.
Snowfall warning for:
Fraser Valley
10 CM OF SNOW EXPECTED BY THIS EVENING FOR WEST VANCOUVER ISLAND AND 20 TO 30 CM OF SNOW EXPECTED BY SUNDAY EVENING FOR THE OTHER REGIONS.
A STRENGTHENING ARCTIC RIDGE OVER THE NORTHERN INTERIOR IS PUSHING COLD ARCTIC AIR UP AGAINST THE EAST SLOPES OF THE NORTH AND CENTRAL COAST MOUNTAINS. STRONG OUTFLOW WINDS HAVE DEVELOPED THROUGH THE VALLEYS AND INLETS AS THE ARCTIC AIR RUSHES THROUGH THE GAPS TOWARDS THE COAST. AS THE HIGH CONTINUES TO STRENGTHEN WINDS WILL INCREASE AND TEMPERATURES WILL CONTINUE TO FALL RESULTING IN WINDCHILLS IN THE MINUS 20 TO MINUS 30 RANGE BY THIS AFTERNOON OVER THE NORTH COAST AND MINUS 20 BY THIS EVENING OVER THE CENTRAL COAST. THESE CONDITIONS ARE EXPECTED TO PERSIST FOR SEVERAL DAYS. THE ARCTIC AIR IS MAKING ITS WAY THROUGH THE VALLEYS OF THE SOUTH COAST AND WILL ARRIVE IN THE LOWER MAINLAND BY SUNDAY MORNING. AN INTENSIFYING LOW OVER THE PACIFIC WILL APPROACH WASHINGTON STATE SUNDAY MORNING. THE MOISTURE ASSOCIATED WITH THE LOW WILL INTERACT WITH THE ARCTIC AIR GIVING SIGNIFICANT SNOWFALL FOR MUCH OF THE SOUTH COAST BEGINNING TONIGHT. 10 CM OF SNOW IS EXPECTED BY THIS EVENING FOR THE WEST VANCOUVER ISLAND REGION AND 20 TO 30 CM OF SNOW IS EXPECTED BY SUNDAY EVENING FOR THE OTHER REGIONS.
From Saturday afternoon to Sunday afternoon we expect : 15-20 cm of snow
Sounds good to me.
From Saturday morning to Sunday morning we expect : close to 10 cm of snow and close to 5 mm of rain.
Ear on the Street
Algonquin Power Income Fund (APF.UN : TSX : $9.55)
$60 million financing completed
Scotia Capital Markets resumes coverage with a "sector underperform", 12-month target price is $9.25
Alimentation Couche-Tard (ATD.B : TSX : $26.24)
Q2 in line
GMP Securities maintains "hold", 12-month target price is $27.50
Axmin Inc (AXM : TSX-V : $0.87)
Passendro feasibility is expected to be completed by mid-2007
Haywood Securities maintains "sector outperform", 12-month target price is $1.75
Cameco Corp. (CCO : TSX : $40.74 | CCJ : NYSE : US$34.71)
Signs an exploration agreement with Tenex
GMP Securities maintains "buy", 12-month target price is US$45.00
CML Healthcare Income Fund (CLC.UN : TSX : $13.67)
Management provides more details on acquisition strategy
Blackmont Capital maintains "buy", 12-month target price is raised to $14.60
Canadian Western Bank (CWB : TSX : $44.40)
Poised for double digit growth in 2007
Dundee Securities maintains "neutral", 12-month target price is $49.00
Emera Inc. (EMA : TSX : $22.26)
Management outlines its strategy of "playing to its strengths"
BMO Capital Markets maintains "market perform", 12-month target price is $22.00
Energy Metals (EMC : TSX : $9.31)
To expand its technical team
GMP Securities maintains "buy", 12-month target price is $13.85
Enbridge (ENB : TSX : $40.02)
New Street coverage
Desjardins Securities initiates coverage with a "hold", 12-month target price is $41.00
ExAlta Energy (EXA : TSX : $3.99)
Strong outlook for production growth
Raymond James maintains "strong buy", 6-12 month target price is $9.25
FUN Technologies (FUN : TSX : $4.24)
Q3 shows declining gross margins
Canaccord Adams downgrades to "sell", 12-month target price is cut to $4.03
Gabriel Resources (GBU : TSX : $4.90)
Uncertain future
Dundee Securities maintains "underperform", 12-month target price is raised to $4.00
Gemini Corp. (GKX : TSX-V : $0.68)
Q3 results disappoint
Desjardins Securities maintains "buy", 12-month target price is $2.00
Grand Petroleum (GPP : TSX-V : $3.79)
Q3 meets expectations
Canaccord Adams maintains "buy", 12-month target price is $5.50
Harvest Energy Trust (HTE.UN : TSX : $26.87 | HTE : NYSE : US$23.77)
$555 million financing completed
BMO Capital Markets maintains "market perform", 12-month target price is cut to $27.50
CIBC World Markets maintains "sector perform", 12-month target price is cut to $30.50
Scotia Capital Markets maintains "sector underperform", 12-month target price is $24.00
La Senza (LSZ : TSX : $47.85)
Q3 Results well above expectations
BMO Nesbitt Burns maintains "sector perform", 12-month target price is $48.25
New Flyer Industries Inc. (NFI.UN : TSX : $8.55)
New Street coverage
CIBC World Markets initiates coverage with a "sector perform", 12-month target price is $9.00
Northern Property REIT (NPR.UN : TSX : $23.99)
Distribution increased
Scotia Capital Markets maintains "sector outperform", 12-month target price is $25.10
Power Corp of Canada (POW : TSX : $36.09)
Rumours of takeover
BMO Nesbitt Burns maintains "market perform", 12-month target price is $38.50
Reitmans (Canada) (RET.A : TSX : $22.73)
Future margin expansion
BMO Nesbitt Burns maintains "outperform", 12-month target price is increased to $26.00
Rogers Sugar Income Fund (RSI.UN : TSX : $3.60)
Higher revenues resulting from higher world sugar prices and better product mix
BMO Nesbitt Burns maintains "market perform", target price lowered to $3.90
Sound Energy Trust (SND.UN : TSX : $5.57)
Sound has significant tax pools estimated at about $390 million post the clear merger
TD Newcrest downgrades to "hold", target price is lowered to $5.50
Tembec Inc. (TBC : TSX : $1.47)
Q4/06 EBITDA of $30.2 million
CIBC World Markets maintains "sector underperform", target price raised to $0.75
Desjardins Securities maintains "sell", target price is $0.75
Raymond James maintains "underperform", 6-12 month target price is $0.50
TD Newcrest maintains "reduce", 12-month target price is raised to $0.75
Zarlink Semiconductor (ZL : TSX : $2.30 | NYSE : US$2.00)
$121 million in cash, with no debt
GMP Securities maintains "buy", target price is US$3.00
Hi december.
Has any exploration been done on any of the properties?
We did get snow here today. Only in the higher elevations.
Like about 100 feet above sea level.
Tax Optimized Trust.
I see the pro is at it again.
Tories to focus on debt reduction and tax cuts
TENILLE BONOGUORE
Thursday, November 23, 2006
A national regimen of debt reduction and sweeping tax cuts forms the backbone of the Tory economic vision unveiled by Finance Minister Jim Flaherty on Thursday afternoon.
Issuing a blanket release of the fall fiscal update Advantage Canada: Building a Strong Economy for Canadians, Mr. Flaherty said the government will adopt a new national objective to eliminate the total government net-debt by 2021.
In effect, that proposal would balance Canada's books, leaving the nation with a level of debt equal to the value of its assets.
But that aim requires the full participation of all the provinces, the fiscal update states. The report calls on provincial and territorial governments to maintain balanced budgets and join the Tories in driving surpluses into the debt-elimination campaign.
"The federal government will do its part by continuing to plan for annual debt reduction of $3-billion," the report states.
Mr. Flaherty also wants to cut total federal debt to 25 per cent of GDP by 2021.
Mr. Flaherty says the money saved in interest on a reduced debt will be returned to Canadians in the form of tax cuts, and any unexpected surpluses will also be plowed into tax cuts and debt reduction.
"From this year forward, every dollar of every surplus of the Government of Canada will be applied to bringing down the debt," Mr. Flaherty told the House of Commons Standing Committee on Finance.
"We believe it's time to mobilize Canadians to make a national commitment to pay off Canada's national mortgage."
But Liberal MP John McCallum accused the government of using "an arcane statistic" — the net debt — to confuse people.
Net debt is something that "only a handful of economists in the OECD have ever heard of," Mr. McCallum said.
The Tories described its economic update as "optimistic, but realistic. It is visionary, but pragmatic."
But taxation and investment specialists said there was little new detail in the plan.
"They've given us a general road map as to how they plan to tackle the debt, but not much beyond that," said Aurele Coucelles, senior specialist in taxation and estate planning for the Winnipeg-based Investors Group.
For example, he said the Tories say they want to help low- and modest-income Canadians over the "welfare wall" by implementing a Working Income Tax Benefit, but give no details about what that benefit would entail, nor how it would be implemented.
"It's hard to tell where they're aiming to go," he said.
The finance minister promised to cut the GST by another percentage point by 2011, as well as new income tax reductions and lower taxes on savings and capital gains.
He predicted a budget surplus pf $4.2-billion this year — $600-million higher than the $3.6-billion forecast in the May budget.
The minister predicted annual surpluses of $2-billion or better in each of the next five years. That's a far cry from the $13.2-billion recorded last year and reflects the slowing economies in Ontario and Quebec.
NDP Leader Jack Layton said Mr. Flaherty's focus on tax cuts was reckless.
"They're just saying they're going to pay down the mortgage incredibly fast," while neglecting to set aside money for daily living, he said.
Ontario Finance Minister Greg Sorbara said Mr. Flaherty's economic statement is nothing more than a blatant attempt to set the stage for the next federal election campaign.
He told reporters he is concerned that the federal government will devote all of its financial resources to reducing the country's debt and cutting taxes for individuals.
"There's great detail on how much each Canadian is going to get, even a little tax calculator for seniors," Mr. Sorbara told reporters. "That gets to the point of being tacky."
He said he is concerned that the economic statement is short on details on the issues important to Ontario, including investing in post-secondary education and infrastructure projects and addressing the fiscal imbalance between Ottawa and the provinces
There are risks in the forecasts, the minister admitted: a slowdown in the American housing market, uncertainty about commodity costs and the possibility of further slippage in the U.S. dollar could push up the Canadian dollar and hurt exports.
"Despite these risks, I am confident in the underlying strength of the Canadian economy and out ability to deal with these and other potential risks, should they arise," he said.
The Conservative government plans to lure private sector investment into research and development through tax incentives and investment promotion.
"Advantage Canada will create the right kind of tax and business environment that will encourage the private sector to turn bright ideas into new products, services and technologies to generate more economic growth and create new well-paying jobs for Canadians," Mr. Flaherty told the committee.
Toronto-based domestic and cross-border taxation lawyer Michael Friedman said the proposal centred on many previously-announced measures and intentions.
"There appeared to have been an expectation there might be some comment of intent on income splitting and capital gains," Mr. Friedman said.
"This document largely reiterated what we've seen in the past. (However) it's useful to see the government has a longer-range plan, and its consistent orientation to that plan."
HIGHLIGHTS:
— Predicts surplus of $4.2-billion for 2006-07, up from earlier forecast of $3.6-billion.
— Real GDP growth slowed to 2.0 per cent in second quarter, down from 3.6 per cent in first quarter.
— Government spending for 2006-07 down $1.2-billion from level predicted in May budget.
— Renewed Bank of Canada inflation target of 2 per cent through 2011.
— Income tax revenue grew at twice the rate of personal income growth in first half of 2006-07.
— Corporate income tax revenues projected to be $2.6-billion lower than forecast in May budget.
Interactive
Gold, silver, platinum and base metals 2007 – the China Syndrome
By: Charles Carlisle
Posted: '24-NOV-06 08:00' GMT © Mineweb 1997-2006
LONDON (Mineweb.com) --One of the unknowns perhaps facing all the analysts and pundits who have been looking at gold supply and demand is the likely demand from China next year. And here I’m not necessarily talking about industrial demand, which is likely to continue growing, or Central Bank purchases, which could be anyone’s guess (although here I’d waver on the side of an increase), but investment demand.
My colleague Dorothy Kosich in her part-in-jest article this week entitled “Will Chinese go hog wild for gold in 2007?” may have hit the nail right on the head. Next year, as Dorothy noted, is the Year of the Pig, the last and luckiest year of the 12-year rotation of the Chinese lunar calendar, and is also, by coincidence, a year related to metals on a five-year elemental cycle. Given that pig years are considered to be the lucky years, the combination of the year of the pig and a metals year could well stimulate some unusual demand for the major investment related precious metals – gold, silver and platinum. And with China’s massive population, more and more of whom are entering the consumer society, the offtake could be substantial.
While the China Gold Corporation’s Year of the Pig gold bars will only account for three tonnes of the yellow metal, one suspects that this could be snapped up quickly thus prompting possible further releases on to the market. But, as the year of metal is non-specific, investment demand could easily spill over into the other precious metals too – or even to ETFs, while it is also possible that major base metals consumers may look at the concurrent Pig year/Metals year coincidence as a sign that 2007 should also be a particularly auspicious time for rebuilding stockpiles. Given the significance of Chinese demand for virtually all metals and minerals, this could bode well for metals prices next year.
This is obviously a far from scientific analysis of Chinese metals demand trends, but it can be ancillary, and perhaps unpredictable, factors of this nature which make all the difference to price patterns. It is the marginal additional offtakes which drive the prices up when supply and demand are in reasonable balance, which is true of gold, platinum and copper. Where supplies are tight to start with – as with zinc, nickel, lead and iron ore in particular at the moment - price impacts could be dramatic should the Chinese take the year correlation as a sign it is time to buy!
Mineweb always carries details of at least 20 independently written top mining, mining finance, metals and mining sector analysis articles on its homepage as well as a fast news feed to keep you right up to date with what is going on in the mining and metals sectors worldwide. These are continuously updated through the day. Click here to go to Mineweb's home page and access the latest news and comments on developments in mining and metals worldwide.
Been there Done that.
Later John.
I gues it is better to stay inside by the fireplace and roast marshmellows and drink hot chocolate.
That is something that is hard to do.
Don't look like we get snow today.
A high of 4.
Shoulda, Couldal, Woulda.
Ear on the Street
Agnico-Eagle Mines (AEM : TSX : $45.41 | NYSE : US$39.78)
More discoveries at Kittila and Pino Altos
Canaccord Adams maintains "buy", 12-month target price is US$44.00
Desjardins Securities maintains "buy", 12-month target price is $62.75
Dundee Securities maintains "outperform", 12-month target price is raised to $50.00
Raymond James maintains "outperform", 6-12 month target price is $49.00
Aeroplan Income Fund (AER.UN : TSX : $15.55)
CIBC announced the business Aerogold card will earn 50% more Aeroplan points
Blackmont Capital maintains "sell", 12-month target price is raised to $12.50
TD Newcrest maintains "buy", 12-month target price is $16.50
Anatolia Minerals Dev Ltd (ANO : TSX : $4.00)
Q3 loss in line
RBC Capital Markets maintains "outperform", 12-month target price is $6.25
Alimentation Couche-Tard (ATD.B : TSX : $25.98)
Q2 in line
Blackmont Capital maintains "buy", 12-month target price is cut to $32.00
BMO Capital Markets maintains "outperform", 12-month target price is raised to $35.00
CIBC World Markets maintains "sector perform", 12-month target price is $30.00
Credit Suisse maintains "neutral", 12-month target price is $29.00
Desjardins Securities maintains "hold", 12-month target price is $29.00
Dundee Securities maintains "neutral", 12-month target price is $26.00
RBC Capital Markets maintains "sector perform", 12-month target price is not given
Scotia Capital Markets maintains "sector perform", 12-month target price is $25.00
Addax Petroleum (AXC : TSX : $30.58)
Solid Taq Taq results
RBC Capital Markets maintains "outperform", 12-month target price is increased to $37.00
Scotia Capital Markets maintains "sector perform", 12-month target price is $36.00
Augusta Resource (AZC : TSX : $2.38)
New Street coverage
BMO Capital Markets initiates coverage with a "outperform", 12-month target price is not given
Bombardier Inc. (BBD.B : TSX : $3.79)
To report Q3 on November 29
Scotia Capital Markets maintains "sector underperform", 12-month target price is $3.50
Bronco Energy (BCF : TSX-V : $4.93)
Announced Grand Rapids Drilling commitment
RBC Capital Markets maintains "outperform", 12-month target price is raised to $7.25
Cardiome Pharma (COM : TSX : $14.20 | CRME : NASDAQ : US$12.44)
Report on Dronedarone highlights some potential reasons for concern over that drug
Dundee Securities maintains "market outperform", 12-month target price is $19.00
Dorel Industries (DII.B : TSX : $32.00 | DIIB : NASDAQ : US$27.98)
New Ameriwood president appointed
Desjardins Securities maintains "hold", 12-month target price is $30.00
EnCana Corp. (ECA : TSX : $57.85 | NYSE : US$50.61)
Oil sands expansion not reflected in share price
RBC Capital Markets maintains "outperform", 12-month target price is $66.00
Flagship Energy (FG.A : TSX-V : $1.31)
Q3 production and cash flow below estimates
GMP Securities maintains "buy", 12-month target price is $2.25
Finning International (FTT : TSX : $45.19)
Headwinds: prevailing parts supply challenges, and further U.K. restructuring charges
Raymond James downgrades to "outperform", target price is $45.77
GENIVAR Income Fund (GNV.UN : TSX : $11.50)
Initiating coverage due to potential growth
Raymond James initiates "strong buy", 12-month target price is $14.50
Grand Petroleum (GPP : TSX-V : $3.80)
Teporary growth stall
Haywood Security maintains "sector outperform", 12-month target price is $7.25
Greystar Resources (GSL : TSX : $10.90)
New Street coverage
BMO Capital Markets initiates coverage with a "market perform", 12-month target price is not given
Goldcorp Inc. (G : TSX : $31.23 | GG : NYSE : US$27.32)
New Goldcorp
Canaccord Capital upgrades to a "buy", 12-month target price is decreased to US$37.50
Jaguar Mining Inc. (JAG : TSX : $6.10)
Weak Q3 but good forcasts
RBC Capital Markets maintains "outperform", 12-month target price is raised to $9.00
Keyera Facilities Income Fund (KEY.UN : TSX : $16.79)
Attractive valuation
RBC Capital Markets upgrades to "outperform", 12-month target price is decreased to $18.00
LionOre Mining International (LIM : TSX : $9.97)
Confidence improving.
TD Newcrest maintains "buy",12-month target price is $12.00
March Networks (MN : TSX : $23.80)
Positive preview
Canaccord Capital maintains "buy", 12-month target price is $29.00
Medicure (MPH : TSX : $1.58 | MCU : AMEX : US$1.40)
Phase III trial initiated
Haywood Security maintains "sector outperform", 12-month target price is $3.25
Nova Chemicals Corp (NCX : TSX : $33.51 | NYSE : US$29.38)
Imminent STYRENIX sale
RBC Capital Markets maintains "outperform", target price is US$40.00
Scotia Capital Markets maintains "sector underperform", 12-month target price is $33.00
Onex Corporation (OCX : TSX : $27.64)
Spirit IPO soars
BMO Capital Markets maintains "outperform", 12-month target price is raised to $32.00
Polaris Minerals (PLS : TSX : $6.39)
Prodution is expected to start next month
GMP Securities maintains "buy", 12-month target price is $8.90
Potash Corp. of Saskatchewan (POT : TSX : $161.04 | NYSE : US$141.17)
Uralkali outlines plan to restore production to the pre-Mine-1 flood level
Scotia Capital Markets maintains "sector outperform", 12-month target price is $180.00
Q9 Networks Inc. (Q : TSX : $11.85)
New distribution partnership with IBM
Haywood Securities maintains "sector outperform", target price raised to $14.50
TD Newcrest maintains "buy", 12-month target price is $13.00
Toromont Industries (TIH : TSX : $22.73)
Management highlights enduring growth
Blackmont Capital maintains "buy", 12-month target price is $30.00
Van Houtte (VH : TSX : $17.57)
Q2 slightly beats expectations
RBC Capital Markets maintains "sector perform", no target price is given
Scotia Capital Markets maintains "sector perform", 12-month target price is $20.50
George Weston Ltd. (WN : TSX : $72.39)
Delivering margin expansion
BMO Capital Markets maintains "market perform", 12-month target price is cut to $71.00
CIBC World Markets maintains "sector underperform", 12-month target price is cut to $65.00
Credit Suisse upgrades to "outperform", 12-month target price is $88.00
RBC Capital Markets maintains "sector perform", 12-month target price is $77.00
Scotia Capital Markets maintains "sector perform", 12-month target price is $76.50
Yellow Pages Income Fund (YLO.UN : TSX : $12.92)
Increases distribution by 6%
CIBC World Markets maintains "sector perform", 12-month target price is $12.75
Dundee Securities maintains "outperform", 12-month target price is $16.00
Freeport McMoran (FCX : NYSE : US$61.80), Net Change: 3.39, % Change: 5.80%, Volume: 16,117,400
I was once caught by a fish THIS big…Copper producer Freeport-McMoRan moving higher on rumours of a takeover bid by
BHP Billiton (BHP). A CNBC talking head highlighted the current spread between Freeport and Phelps Dodge (PD) and noted
that the current BHP CEO was the former CFO of Freeport, and said if they were interested, there could have been plenty of
opportunities. Analysts gave an offer low odds, though. A deal for Freeport would not be financially attractive enough for BHP,
which has a number of big projects of its own under development, and there are also risks associated with Freeport’s assets,
according to naysayers. Freeport’s Grasberg copper mine in Indonesia is a world-class orebody, but faces operational and
environmental problems reminiscent of the Ok Tedi copper mine in Papua New Guinea, which BHP finally exited in 2002, they
added. Moreover, BHP was concentrating on increasing output at the giant Olympic Dam copper and uranium mine in outback
Australia, and developing its Ravensthorpe nickel project. Still, the option action in Freeport is not typical of a firm that is an
acquirer but rather a company that may be a target itself – in morning trade, roughly 25,500 calls and 14,300 puts traded, way
above its normal daily volume of 14,528 contracts. The fact is, it’s impossible to rule out a takeover in the current climate as
global miners scramble to add reserves and try to capitalize on record-high metal prices.
From Thursday evening to Friday evening we expect : close to 1 cm of snow and close to 10 mm of rain
I'm game for anything...
Does it involve Cougars?
CORN STRATEGIES
Big crops don't always get bigger, and the USDA for the November crop report raised soybean yields but lowered corn yields to trigger an even tighter than expected ending stocks scenario for the 2006/07 season in corn. The need for yet another big crop next year is becoming more and more apparent. Corn demand for ethanol is expanding at a rapid pace. Ethanol production capacity in the US was near 4.3 billion gallons in January this year and is expected to be near 6 billion gallons in January of 2007 and near 7 billion in January of 2008. Traders expect a big shift to corn and away from soybeans for the coming season, but even with a 7 million acre jump in corn planted area, it will take good yields next year and in 2008 to avoid a major tightening in US ending stocks.
World ending stocks for corn for the 2006/07 season are pegged at just 90 million tonnes, down from 126.1 million tonnes in 2005/06 and 130.5 million tonnes in 2004/05. This would be the lowest world ending stocks level since 1983 and would result in the lowest stocks/usage (12.4%) since 1973, when it fell to 11.8%. While China may have exported nearly 4 million tonnes so far this season after their record high harvest, a jump in internal prices last week has traders convinced that China export sales will slow or stop for now, and this helped spark a resumption of the uptrend in corn prices. US ending stocks are pegged at just 935 million bushels, which results in a stocks/usage ratio of 7.9%, the second lowest on record and only the third time in modern history (1960 to present) in which the ratio was under 10%. Poor weather looks to slow the tail end of harvest in the eastern Corn Belt, with more rain due in Ohio this week. As of Sunday, Ohio was only 68% harvested as compared with 83% as the 5-year average for this time of the year. This may have implications for the final crop tally for the season in a year in which demand is explosive.
The enclosed supply/demand table shows the "what if" scenarios for next year if there is a 7 million acre increase (up 9%) in corn plantings and another 2 million acres for the 2008/2009 season. With tight beginning stocks and expanding ethanol demand, even a yield of 155 bushels per acre (up 2.5% from this year) would cause ending stocks to drop to near 745 million bushels, with a stocks/usage level of 6.1%. Even if yield jumps 4.5% to 158 bushels per acre, the US stocks/usage ratio would still be near current levels. The tightness is expected to continue into the following year unless there is a major boost in yield or there is a larger than expected response to the high corn/soybean price ratio in the months ahead. The tightness in ending stocks would already be a good enough reason to consider trading the Jul/Dec 07 corn spread from the long side, but if the acreage shift ideas continue to grow to 10 or more million acres for the coming season, this would add further reasoning to buy the spread. It would also suggest that traders might consider owning the Nov 07/Jul 07 bear spread in soybeans. If soybean acres drop 9 1/2 million acres and yield comes in at 42 bushels/acre, ending stocks would drop to near 191 million bushels in 2007/08 from a record 565 million this season.
Normally, a rally in corn would attract increased selling from producers and lower export sales news, but this is not a normal year. For the current corn bull market, producer selling has been slower than expected and corn importers are rushing to book needs for 2007 before the ethanol industry drives up prices in 2007. Weekly US export sales for corn came in at 1.93 million metric tonnes last week as compared with trade expectations at 800,000-1.0 million. This was a new marketing year high and the highest weekly sales total since January and also the 16th highest in history. Cumulative sales have reached 38.9% of the USDA forecast for the entire marketing year as compared to 32.7% on average over the last five years. Buying corn after a $1.30 rally in just two months does not come with significant risk of a technical correction. Even a normal correction of nearly 30% represents a 40 cent break from any high. The Commitment of Traders report with options showed the market in a classic bullish setup (as of November 7th) with non-commercial traders (trend following funds) net long 285,910 contracts and non-reportable traders net short nearly 106,000 contracts. However, the fund net long reached a record high, and minor long liquidation selling could turn into a more significant setback quickly.
Suggested Trading Strategies: 1) Buy May corn at 371 1/2 with objectives of 409 and 449. Risk to 352. 2) Buy the May corn 380/440 bull call spread at 14 1/2 cents with an objective of 36. Risk 7 cents from entry. 3) Buy July 07/sell Dec 07 corn at +27 1/2 July with an objective of +95 July. Risk 10 cents from entry. 4) Buy Nov 07/sell July 07 soybeans at +6 1/2 Nov with an objective of +38 Nov. Risk 8 cents from entry.
WHEAT STRATEGIES
Given the extreme tightness in stocks into mid-2007, just a minor weather scare for any of the northern hemisphere winter wheat crops could launch the wheat market into another leg higher. Ideas that the wheat rally into an October 17th peak came soon enough to cause a major increase in planted acres around the world has kept the short term trend down for the wheat market. US planted area is expected to jump by 10-13%, Ukraine planted area is up 14% and traders suspect similar numbers from other key exporters. India wheat stocks for November 1st declined to just 5.99 million tonnes from 9.05 million tonnes last year. However, the planting season is going well, and after importing wheat for the first time in 6 years over the past season, India Agriculture officials believe the country is on track for a record crop in 2007 if weather cooperates. However, expecting normal weather in a period of global warming is risky, and the market has no room for error if a serious weather problem occurs at key producing areas.
In 2006, drought or other problems impacted crops in the US, Western Europe, Ukraine/Russia and Australia. Traders expect an Australia crop near 9 million metric tons as compared with production near 25 mmt the previous year. The tight cash situation should reach its peak in May of 2007, ahead of the new harvest. World ending stocks for 2006/07 are now expected near 118.8 million tonnes, the lowest since 1981 and equate to the lowest stocks/usage ratio in history. Even more important, the USDA pegged ending stocks for major world exporters at just 22.3 million tonnes as compared with the September forecast of 26.9 million and 40.3 million tonnes in 2005/06 and 40.8 million for the 2004/05 season. If world production jumps in 2007, the tightness will be alleviated, but with the tightness, a minor weather threat could see the market react as if there were a significant production threat for next year.
As of this writing, the outlook for rain in the southern plains looks very limited, with warmer and drier than normal weather expected for the region over the next few weeks. As of Sunday, November 12th, subsoil moisture in Kansas was rated short to very short for 69% of the state from 65% the previous week and 49% last year at this time. China winter wheat areas are also suffering from drought conditions, and there is little rain in the short term forecast. If the dryness continues, the market will become more and more sensitive. Kansas City wheat has corrected more than 50 cents off of the highs, which may have alleviated much of the overbought technical condition of the market at the October peak.
Suggested Trading Strategies: 1) Buy March Kansas City wheat at 528 1/2 with an objective of 586 1/2. Risk to 516. 2) Sell two of the March KC wheat 480 puts at 11 cents each and Buy a March KC wheat 550 call for 22 cents. Hold for 586 1/2 objective for March KC wheat and risk a total of 14 cents on the spread.
MARCH COFFEE
After a 9-month downtrend channel, March coffee experienced a solid breakout to the upside in early November. The breakout came with rising open interest, as fund traders shifted from a net short to a net long position and the buying trend in early November triggered the jump in open interest. The upside breakout of a 5-month range leaves a solid base of support under the market, which could support a significant rally ahead. The Commitment of Traders report with options last week showed the market in a slightly overbought condition, with speculators increasing their net long position by nearly 8,400 contracts (for the week ending November 7th) to nearly 21,000 contracts. Non-commercial traders (trend following funds) were aggressive buyers for the week, and the buying trend was seen as a short erm bullish force. However, the net long position of the funds is still just 15,678 contracts, whereas a net long of 45,000 contracts might be considered overbought. The weekly chart pattern is also bullish, and a weekly close over 116.90 for nearby futures would leave 157.10 as a longer term upside swing objective.
Suggested Trading Strategy: Buy March coffee at 119.20 with an objective of 132.60. Risk to 115.90.
MARCH COPPER
In the prior letter we were extremely bearish toward the copper market, and subsequently the market dove almost 30 cents. While the outlook for the global and US economies remains extremely suspect and the pattern of daily increases in LME stocks is hardly showing signs of ending, we suspect that the copper market is getting close to a critical low. In fact, with the copper market already showing the capacity to reject sub $2.90 pricing in June and the most recent COT report positioning showing the specs massive short, it is possible that the market will avoid a full return to the June lows. The basis of our bottoming forecast is the stellar performance in the US equity market, the maintenance of low oil prices, an ongoing pattern of declines in the US unemployment rate, a reduction in the amount of homes on the market in the month of October, a sharp rise in the MBA Refinancing Index and finally and perhaps most importantly, the view that Chinese de-stocking probably cannot continue much longer. Furthermore, despite a massive and consistent LME stock rebuild, overall stock levels still remain low. (See the enclosed long term LME inventory chart.) We might also note that a sharp rise in the New York Fed manufacturing data on November 15th, as that would suggest that pockets of the US economy remain strong into a typically supportive holiday shopping season. In fact, given a 6.5% increase in the MBA Refinancing Index, one might even suggest that the US economy was already seeing the stimulative benefits of falling Treasury yields even before the December bonds managed a new high for the move on November 14th. In other words, we would expect even more refinancing benefits in the coming months, and we would also expect the persistent gains in the equity market to steadily improve macroeconomic expectations. As we have already mentioned, December copper has recently showed a moderately large spec short position of roughly 20,000 contracts, and according to the combined COT Non-Commercial/Non-reportable position chart, seeing the net spec short at 20,000 contracts is an extreme reading of sorts. Therefore, we think that the fundamentals and the technicals are both poised to bring about a critical bottom in March copper
FEBRUARY GOLD
Relative to the May highs of $753, December gold prices around $616 last week seemed to be fairly cheap. However, relative to the 2005 lows of $413, prices just above $600 don't look as undervalued. However, when one considers a big picture view of supply and demand, it would seem that the gold market is indeed capable of a sustained upward extension in prices. At its basic level, the bull case supposes that global mine production will remain soft into the middle or later part of 2007, that investment and jewelry demand will continue to be strong and that producers will attempt to keep hedge books down in order to benefit from the rise in prices. We would also suggest that some central banks will become net buyers of gold and that the imbalance of supply and demand in gold will tighten. In fact, a number of analysts are expecting to see Russian, Indian and Chinese central bank buying over the coming years as those countries see their world trade levels expand rapidly, which in turn will result in larger foreign currency reserves. As was seen in the November 9th $20 gold rally, the market is and will probably remain very sensitive to ideas that China will diversify some of its foreign currency reserves away from the Dollar. The idea that China, India and Russia will be end up increasing their gold holdings as a result of growth in their international trade activity will have perhaps a more direct and potentially more significant effect on gold prices, as that could accelerate the supply and demand deficit pattern in gold. We might note that the gold market rally off the October lows was forged in the face of sagging economic activity and declining inflationary conditions. However, in looking into the future, we think that inflation is poised to rise, as historically high oil prices are entrenched and the inflationary tilt is joined by a consistent rise in food prices. In the near term, the direction of the Dollar might hold back the gold market, but eventually we think that basis supply and demand realizations will result in December gold prices grinding upward into the middle of 2007. We suspect that December gold will be able to respect the consolidation support around $610 and that February gold will be able to respect support of $620. In looking back to the September through early November consolidation in February gold of $610 to $570, it would seem like the market judged those prices to be too cheap. Therefore, we would be surprised to see February 2007 gold spend much time trading below the $610 level. With our expectation that gold demand will continue to outstrip supply coupled with the long term expectation of increase central bank buying, we expect an uptrend pattern in prices. However, with the gold market paying significant attention to the direction of the Dollar, one might have to expect periodic corrections of significant force. In looking at the February gold chart since the end of September, one has seen corrections of $50, $40, $16 and $22, so it is clear that to be long for a position play and a long term appreciation in prices will require some fortitude or a bit of strategy. Our strategy is to be long futures and protect that position by selling an out of the money call and buying a just out of the money put. Traders should feel confident in trading in and out of the short call in an effort to reduce the cost of the long put
After being consistently upbeat toward the prospects of the US economy and the equity market in the September to early November time frame, our typically upbeat macroeconomic confidence began to wane into and through the slack October Non Farm Payroll report and the November 14th US PPI & Retail Sales readings. However, with the world apparently staying upbeat toward the Dollar through the "diversification" talk, the US equity market charging to more new highs and, perhaps most importantly, seeing evidence of a recovery in the housing sector, we have returned to the pro-growth fold. In fact, the market seems to be suggesting that the Fed has managed to engineer a reduction in inflation and has done so without derailing the economy. The basis for the speculation of ongoing growth is largely the result of ultra impressive equity action and more recently off a series of positive housing market developments. Apparently the supply of homes in large metropolitan cities actually declined moderately in October, while US mortgage applications actually showed a smart rise in the November 15th figures. Apparently the number of homes offered for sale in 18 major metropolitan areas declined by 1.2% in October, and while the overall level of inventories remains above the prior year, there is reason to believe that the overhang of supply is going to be reduced. In other news, the Mortgage bankers Association weekly Mortgage Application Index actually managed a 6.5% reading, while the Purchase Index managed a rise of 2.7%. While refinancing gains don't exactly suggest fresh purchases, one should remember the stimulative impact resulting from aggressive refinancing action into and following the 2003 Treasury top. In fact, with oil prices seemingly poised to remain within striking distance of 13-month lows and Treasury yields also closing in on 13- month lows, the environment for the economy is conducive to growth. In fact, given the typical lift provided by the retailing sector into the holiday shopping season, it is possible that the US economy can manage to strengthen into the end of the year. Certainly major commodity indexes were feeling the pain of the slowing threat, as the mid November correction highlights, but it is also clear that the weakest markets, oil, copper, lumber, wheat, cocoa and coffee have the capacity to arrest their slides, while markets like corn, bean oil, gold, silver and natural gas might be able to assume the leadership role in the coming months.
Ear on the Street
Angiotech Pharmaceuticals (ANP : TSX : $9.51 | ANPI : NASDAQ : US$8.29)
JNJ to acquire Conor Medsystems
Desjardins Securities maintains "hold", 12-month target price is cut to US$11.50
Atrium Biotechnologies (ATB : TSX : $14.97)
Increased market liquidity after secondary offering of ATB shares
Desjardins Securities maintains "buy", 12-month target price is $18.50
RBC Capital Markets maintains "outperform", 12-month target price is $19.00
Alimentation Couche-Tard (ATD.B : TSX : $26.87)
Margins drop on Q3
TD Newcrest maintains "buy", 12-month target price is $30.00
Axia NetMedia (AXX : TSX : $3.79)
New win in France raises the stake
Haywood Securities maintains "sector outperform", 12-month target price is raised to $5.35
Bear Ridge Resources (BER : TSX : $3.60)
Speculative upside of the Tupper play
Canaccord Adams downgrades to "speculative buy", 12-month target price is cut to $5.25
CI Financial Income Fund (CIX.UN : TSX : $25.83)
High redemptions
Dundee Securities maintains "outperform", 12-month target price is $28.00
Cardiome Pharma (COM : TSX : $14.25)
Clinical sessions presented at the AHA meeting
Blackmont Capital maintains "buy", 12-month target price is $20.00
Canadian Pacific Railway (CP : TSX : $63.50 | NYSE : US$55.46)
Conservative 2007 EPS guidance
RBC Capital Markets maintains "outperform", 12-month target price is $77.00
Cognos Inc. (CSN : TSX : $48.69 | COGN : NASDAQ : US$42.49)
Solid Q3 expected
Raymond James downgrades to "outperform", 6-12 month target price is raised to $54.00
Delphi Energy (DEE : TSX : $2.61)
Reduces capital spending significantly
Haywood Securities downgrades to "sector perform", 12-month target price is cut to $4.00
Groupe Laperriere & Verreault (GLV.A : TSX : $26.24)
Increased credit facility
Blackmont Capital maintains "buy", 12-month target price is $32.00
Galleon Energy (GO.A : TSX : $18.40)
Completion of $40 million financing
GMP Securities maintains "buy", 12-month target price is $27.00
Goldcorp Inc. (G : TSX : $29.93 | GG : NYSE : US$26.09)
Q3 disappoints
Desjardins Securities maintains "buy", 12-month target price is $40.25
RBC Capital Markets maintains "outperform", 12-month target price is US$34.00
Iamgold Corp. (IMG : TSX : $10.36 | IAG : NYSE : US$9.05)
Q3 shows cost inflation
Desjardins Securities maintains "buy", 12-month target price is $18.90
Melcor Developments (MRD : TSX : $19.91)
Alberta's real estate boom is likely to continue
Desjardins Securities maintains "top pick", 12-month target price is raised to $28.75
Methanex Corp. (MX : TSX : $27.46 | MEOH : NASDAQ : US$23.96)
A strike by oil and gas workers in Argentina
CIBC World Markets maintains "sector perform", 12-month target price is US$25.00
Progress Energy Trust (PGX.UN : TSX : $11.54)
Government proposal to tax income trusts
Canaccord Capital upgrades to "buy", 12-month target price is $12.50
Quest Capital Corp. (QC : TSX : $2.89)
Attractive growth situation
Desjardins Securities upgrades to "buy", 12-month target price is $3.75
Cdn. Real Estate Investment (REF.UN : TSX : $29.93)
Q3 benefits from strong same-portfolio growth
CIBC World Markets maintains "sector perform", 12-month target price is raised to $30.70
Research In Motion (RIM : TSX : $157.45 | RIMM : NASDAQ : US$137.35)
Continues to show well in terms of brand satisfaction
Canaccord Adams maintains "buy", target price raised to US$180.00
RONA Inc. (RON : TSX : $21.30)
Staying the course
RBC Capital Markets maintains "outperform", 12-month target price is $28.00
Sterling Resources (SLG : TSX-V : $1.70)
Appraisal drilling was completed in October and consisted of seven well penetrations
Canaccord Adams places both rating and target price "under review"
SNC-Lavalin Group (SNC : TSX : $31.43)
Downgrade due to price appreciation
Dundee Securities downgrades to "underperform", 12-month target price is raised to $31.10
Transcontinental Inc. (TCL.A : TSX : $20.85)
15-year deal signed
CIBC World Markets maintains "sector perform", 12-month target price is increased to $24.00
Desjardins Securities upgrades to "buy", 12-month target price is increased to $24.50
TD Newcrest maintains "hold", 12-month target price is increased to $21.50
TUSK Energy Corp. (TSK : TSX : $2.78)
Merger of Tusk and Zenas Energy corp.
Canaccord Capital maintains "buy", 12-month target price is $5.00
West Energy Ltd. (WTL : TSX : $5.05)
Completion of $30 million financing
GMP Securities maintains "buy", 12-month target price is $9.50
Yamana Gold Inc. (YRI : TSX : $12.11 | AUY : AMEX : US$10.59)
Executing development and growth plan
Canaccord Capital maintains "buy", 12-month target price is US$15.25