1) The IKN Weekly is normally not a short-term tipping service. We usually take a 12 month view to stock selections unless specified and as such, the Flash of yesterday was very much an exception rather than a rule.
2) I have just sold the small chunk personally bought after the Flash update went out yesterday. When nice Mr. Market offers me a 30% win in under 24 hours, I take it. Therefore though I can't speak for subscribers I can say that I'm not trying to pump this play any further via this post for the sake of my personal portfolio.
3) Toby Shute rules.
So with those two in mind, here's what was sent to clients yesterday (with typos included). For what it's worth, plenty subbers got on at the low prices according to feedback received.
Thursday, 22 April, 2010 11:47Good morning, 11:47am and well into the trading day.
Camino Minerals (COR.v) may be offering us a quick, short-term trading opportunity today. However it must be stressed that this trade should be considered for risk-tolerant profiles only.
The background is this: COR.v (website here) is the spin-out from the recent successful buyout of Canplats by Goldcorp (GG). As part of the buyout deal, Canplats shareholders got shares in the newco company that is now known as Camino Minerals (COR.v), which has bundled together the assets not sold to GG and also has $10m in working cap to start it off, too. Its total shares out figure is 64,265,432.
Today is the first day of trading for COR.v and it has opened nearly 50% down from its nominal price of 49c. It is currently trading at 26c (bid 25c, ask 26c). Volume is very high at over 11m shares traded.
It seems to me (and also the thought of the person mentioned below who gave me the headsup this morning) that COR.v shares are trading down at high volumes possibly due to forced liquidations. There are many institutions that might have held the old Canplays (CPQ when it existed) but are not allowed to hold micro-cap penny stocks such as COR.v, therefore due to the nature of their funds they are obliged to liquidate.
This is the opportunity envisaged. At the current 26c, COR.v has a market cap of $16.7m. This is backed up by $10m in cash at bank. It also has a book of prospective assets. Finally, it's run by proven winners in the exploration game.
This seems like good odds to me, a good risk/reward scenario for this trappy game of exploration mining investment.
WARNING: Wwe're considering a very short term flip play here. Therefore the main caveat is that although 26c (mkt cap $16.7m) may look cheap today, the nature of selling patterns may make the stock even cheaper tomorrow. That's the main risk here.
The IKN Weekly in this style gives you a headsup on this risky, short term play. Be clear that this kind of trade is not for everyone. Go in with your eyes open.
Disclosure: I am not long yet but may take a position this afternoon. I will happily sell if a quick short-term profit is offered.
Final word. Toby Shute, an analyst over at The Motley Fool (RSS link here) is a site friend and smart at the investing game (well worth your while following him..esp strong at oil&gas companies). He gave me the headsup on the COR.v trading today and after consideration I think it's worth passing all the above on to the subscriber base. I want to make it clear that your author takes full responsibility for the call (i.e. if it goes wrong blame me and not Toby).