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Update on our puppies.

May 3rd, 2008 · No Comments

It’s been quite a week. Let’s review a little of what’s been going on with the four companies we have advised you to take positions in.

IOC was the star of the week. It probably discovered another gas field, called Antelope, which size actually dwarfes that of it’s existing one, Elk. It also got an extension for it’s loan due to Merrill Lynch, but only for a week or so.

The stock price moved up, but uncertainties remain, especially those revolving around the Merrill loan. However, geologist Wayne Andrews from Raymond James did not mince his words:

“The Antelope find will significantly augment the gas found at Elk1. This is a “significant and positive” development.”

While I was a little reserved, Andrews seems to have little, if any, doubt that Antelope consists a new gas find. That is quite remarkable, and in this light, the share price reaction was very muted, and once the financing issue is resolved and a DST test confirms what Andrews already takes for granted, much higher levels will follow.

TSL. Our favourite solar play has, after the run-up a couple of weeks ago, consolidated just under it’s 200 day moving average. We have little doubt that in time, this will be broken, growth and fundamentals are way too good for this puppy to be held down for too long.

However, having said that, we’re not quite as sure about the immediate future. As we suggested yesterday, oil prices have come off their highs due to a rising dollar (itself the outcome of surprising resilience in the US economy) and this might take some wind out of the sails of the solars.

We’re also getting close to earnings, and there were some indications at the last earnings conference that this might not be Trina’s best quarter.

EFUT. Our Chinese supply chain management software company had a flying start with their new B2B website linking retailers to suppliers, it got a big retailer on board which has no less than 20.000 suppliers. This could be a nice little earner for them. Also, they were profiting from a rebound in Chinese shares which we think will last.

However, as we argued before, the share price has gotten a little overheated, some cooling off is already ongoing. We have little reservations in advising you to buy on the dips though. There is support around 15.50.

DRYS. Dry-bulk shipper DRYS diversified into deep ocean drilling, which we thought is an excellent move, taking some of the extreme volatility out of its business and positioning it very well in the early stages of what will undoubtedly be a great growth sector the coming years.

We advised to take some money off the table as we were more gloomy on the US economy than the figures out this week indicated, and indeed, it too showed resilience. So, taking profit might have been premature, but it has never made anyone any poorer.

Have a good weekend!

Tags: DRYS · EFUT · IOC · TSL