stock pickers
WESTJET AIRLINES $12.56 (Toronto symbol WJA; SI Rating: Extra Risk) (1-877-493-7853; www.westjet.com; Shares outstanding: 138.8 million; Market cap: $1.7 billion; No dividends paid) reported that its revenue rose 7.4% in the three months ended March 31, 2010, to $619.8 million from $579.3 million a year earlier. Earnings per share fell 55.5%, to $0.12 from $0.27, mostly due to one-time expansion costs at WestJet Vacations, plus higher fuel costs. WestJet’s load factor hit 78.2% in June 2010, up from 72.9% in June 2009. The load factor is the portion of available seats that are occupied by paying passengers. It increased even though WestJet added 10.9% to its passenger capacity. Revenue passenger miles (the total of paying passengers on all flights, multiplied by distance travelled) rose 19% this year from June 2009....
The price of uranium rose steadily from $7.10 U.S. a pound in December 2000 to as high as $138 U.S. a pound in June 2007. Prices have moved down from that speculative high to today’s price of about $40.00 a pound. But conditions look favourable for higher long-term uranium demand.
Risks and rewards of Canadian uranium stocks
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Every Wednesday, we publish our “Investor Toolkit” series on TSI Network. Whether you’re a new or experienced investor, these weekly updates are designed to give you specific advice on the fundamentals of successful investing. Each Investor Toolkit update gives you a fundamental tip and shows you how you can put it into practice right away. Today’s tip: “Beware of companies that are more interested in boosting their stock than in building their business.” Penny stock promoters love to make deals with major, household-name companies. That’s because they think the public is far more likely to buy penny stocks that have agreements with Teck Resources, BHP Billiton or some other major mining company to finance exploration of their mining claims. Or if Sony, Apple or some other household-name multinational has agreed to evaluate their computer program or electronic gadget. The link with a major gives them instant credibility, especially with investors who buy penny stocks....
We’ve had lots of success with the junior mining stocks we recommend in Stock Pickers Digest, our newsletter for aggressive investing. For example, in a recent issue of Stock Pickers Digest, we updated our buy/sell/hold advice on a junior mine that’s risen more than 300% for us in the past year. See below for further details on this up-and-coming diamond producer.
Keep risk in mind with junior mining stocks
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PULSE SEISMIC INC., $1.44, symbol PSD on Toronto, buys, sells and licenses seismic data to clients in western Canada. Most of Pulse’s customers are oil and gas companies. Pulse is buying the entire 2D and 3D seismic-data library of exploration-services company Divestco (Toronto symbol DVT). The purchase will increase the size of Pulse’s library by 127%. Divestco needed to sell the library to pay down debt. Pulse will pay Divestco $50 million in cash and 14.3 million Pulse common shares. The library contains about 80,000 kilometres of 2D data and 15,000 kilometres of 3D data, and includes highly active areas like the Cutbank Ridge, northeastern B.C.’s Montney shale-gas region, and several oil and natural-gas properties in Alberta’s Deep Basin area....
It’s hard to believe it’s already been a year since we launched TSI Network. When we flicked the switch in June 2009, after months of hard work, the web site already contained a wealth of investment information and stock advice — over 2,000 individual articles, in fact. TSI Network is built on the strengths of our four newsletters: Canadian Wealth Advisor, Stock Pickers Digest, The Successful Investor and Wall Street Stock Forecaster. The site has come a long way in its first year. Its online investment library now contains more than 5,000 articles on stock advice and investment strategy. Plus, we’ve further expanded the information and stock advice you get on the site by adding new free reports and features, such as our “Investor Toolkit” series of Daily Updates. Every Wednesday, these articles give you a fundamental piece of stock advice and show you how you can put it into practice right away....
PLEASE NOTE: Our next Hotline will go out on Friday, July 9, 2010. AMAZON.COM INC., $121, symbol AMZN on Nasdaq, has dropped the price of its Kindle electronic-book reader by 27%, to $189 from $259 (all amounts in U.S. dollars). The move came after Barnes & Noble dropped the price of its Nook e-book reader to $199 and introduced a Wi-Fi only version for $149. The Wi-Fi version can only download e-books through private Wi-Fi networks, in Barnes & Noble stores and in places where AT&T offers Wi-Fi service. In contrast, the more expensive Nook comes with an unlimited 3G cellular Internet link for downloads....
Gold now trades at $1,240.70 U.S. an ounce. That’s up 32.7% from $935 a year ago, but down from its all-time high of $1,256.50 U.S., where it closed on June 18, 2010. Investor fears about European sovereign debt — Greek and Spanish debt in particular — have been a major factor in gold’s recent rise. These fears are prompting more investors to buy gold and gold investments, because they believe gold will provide them with additional security. (In a just-published issue of Stock Pickers Digest, our newsletter for aggressive investing, we update our buy/sell/hold advice on a gold mining stock that has risen over 132% for us in the past year. That’s more than four times the rise in the price of gold. Read on to learn more.)...
It pays to be skeptical of growth stocks that rely too heavily on acquisitions. That’s because the buyer of something rarely knows as much about it as the seller. So it follows that if a company makes enough acquisitions, it might eventually buy something that has hidden problems. At some point, those problems will come out into the open and hurt the buyer’s earnings.
Big acquisitions can burden growth stocks with high debt
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Buying and selling stock options is different from regular stock transactions. You can make money in options investing, of course, but to be successful in this complex, often risky area, it’s crucial to have a firm grasp of how options investing works (and how to avoid the pitfalls that can expose you to serious risk).
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How options investing works
An option is a contract between a buyer and a seller that is based on an underlying security, usually a stock. The buyer pays the seller a fee, or premium, for certain rights to the stock. In exchange for the premium, the seller assumes certain obligations....