Aug 072014
 

Someone I work with told me yesterday about a company that designs and manufactures video surveillance equipment and software called Avigilon (TSX:AVO)

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He said he knows a person who knows another person who has worked directly with AVO and thinks the stock is very undervalued right now. The company is expected to announce their quarterly financial results very soon. My co-worker believes AVO’s numbers will beat the street’s expectations and the stock will make a nice jump 😀

Of course I’m a pragmatic investor who conducts careful and thorough research before buying any stock, so after my co-worker told me about it I decided to purchased 50 shares of AVO this morning at $25.64/share 😀 I just can’t pass up the opportunity to make a quick profit if he’s right and AVO does go up! The total purchase cost was $1,282. I had $1,000 of savings lying around so I used that, and borrowed the remaining balance on margin.

Initial Investment: $1,000.
Leveraged up to $1,282 ($25.64 x 50 shares)

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The company doesn’t pay a dividend but it is growing fast. AVO’s revenues are currently increasing at a rate of 60% a year. It has a pretty high P/E ratio of 39 x but it’s well justified given the company’s growth rate. Short term technical indicators are also promising which is favorable to a swing trade.

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I’m hoping to make at least $200 in profit on this trade which would be a nice 20% return.

Here are the reasons I think AVO is a good buy right now for me.

  • My co-worker is bullish on this stock
  • My very smart online friend, Phil from Ontario, likes this stock
  • Bullish momentum, MACD, and other technical events
  • Based in Vancouver, because I like to invest in local companies 😀
  • The consensus from stock analysts is a strong buy.

Will I make some easy money out of this or will AVO disappoint and eventually lose its competitive edge like BlackBerry? Who knows. Acting on a stock tip is pure speculation (lots of risk) but life is short so let’s make it interesting 😉

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Random Useless Fact: 

This bathtub is cut from a single slab of quartz and costs $1 million. The block of the purest white rock crystal was discovered and quarried in Brazil.

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Jun 262012
 

Just bought some shares of the fertilizer company, Potash Corp. I think this is a great opportunity to make some easy money, if I’m lucky. I’ve only used $600 of my own cash for now. It might not sound like much but that’s because I’m going to borrow extra money from the bank and leverage it up to roughly $2000!

Earlier today I bought 45 shares of Potash Corp at $43.74 each.
Initial investment: $600
Leveraged up to $1,978.29

 

This means I bought almost $2000 worth of stocks for only $600. My bank was nice enough to provide me with the remaining amount I’m short on. That means I owe the bank money, (at 4.25% interest annually) but I believe it’s worth the extra risk.

I’ve always liked this company. They specialize in fertilizers, animal feed, and other chemicals used to produce food. As they say in their advertisements, potash is food for the food we eat :). They also have a great balance sheet and trades at a decent 11 x forward earnings. They are the largest potash producer in the world and a leading phosphate and nitrogen producer. They will continue to be profitable as long as people continue to eat (=^_^=). Why did I buy Potash now? Because over the last year the stock has been falling. But lately it has bounced off a low and is moving up with above average volume. I think they have reached an inflection point.  The short-term technicals for this company is simply too amazing of an opportunity for me to pass up. By the way, Potash Corp is also publicly traded on the NYSE for those interested in the US.

My strategy is simple. I will consider selling this stock when it gets above $48. Or I will buy more of this stock if breaks support and falls below $39, thereby lowering my average cost base and I will sell another day. Since this is a S&P/TSX 60 listed blue-chip company, and is a leader in its industry, I’m not concerned about it going out of business any time soon ;-D

Jan 062012
 

This is a quick crash course on analyzing stocks using technical analysis, which is a term that describes how to predict future stock prices by analyzing past stock prices. I use tech analysis when I swing trade and so do most research analysts. Let’s use the stock I bought a couple days ago as an example, Goldcorp.

First, the stock has a strong “support” around $45, meaning the last several times the price tried to drop, something fundamental was preventing the stock from falling below $45. And right now, it is trading around that support level with an upward “momentum“, so that’s a signal to buy. Next, the red line is a simple moving average (SMA) which is a line that averages out the closing prices of a stock over a recent period of time to smooth out the fluctuating data. It basically represents the overall trend of where the stock is going. 100 days is the period used in this case. Notice how the stock over the years rarely moved below this SMA? But now it is! So this is another obvious buying signal.

Below is a closer look at the most recent stock data. In this chart I have created a 5 day moving average (green line) and a 10 day moving average (red line.) A “Moving average crossover” in technical analysis tells a trader to buy or sell. When a shorter M.A. (in this case the green line) moves down to cross below a longer M.A. it’s a signal to sell. But when it crosses from below the red line to above, like right now, it means buy.

As you can see from this chart, technical analysis actually works pretty well historically speaking. That’s not to say it’s a guarantee of course. If you are going to trade stocks, please understand the risks and do so at your own discretion. That’s basically technical analysis 101. I made these charts using free sites like Google finance or Yahoo finance. To know more about analyzing stocks, just search the internet. That’s where I learned this stuff from. Here’s a good primer from Investopedia.