Comment RE: Insider sellingThis is a very good point.
Coming Up
We believe the next thing to watch out for with Greencastle is an increased presence and stake in the Quebec shale play in the St. Lawrence Lowlands. Rumors persist regarding “ties” between Greencastle (CEO Anthony Roodenburg) and Altai Resources (ATI), a huge landholder in the area. Greencastle has already announced a permit application covering 6,000 hectares, and we expect more news is on the way. We’re very bullish on the shale play in general. While Altai, Junex (JNX), Gastem (GMR) and others are down quite a bit from their highs (just a “corrective” pullback), we believe things are going to heat up again quickly in that region. And Mr. Roodenburg will ensure that Greencastle is right in the middle of it.
Insider Trading – Don’t Be Fooled
Fear has a tendency to overtake some retail investors, usually the more inexperienced, when they see company insiders selling stock. And this can result in silly and very costly investment decisions. We bring this up because the latest insider trading reports show that Roodenburg and others were selling some significant amounts of Greencastle stock into market strength the week of June 23. Options of course were exercised in conjunction with all of that, adding more cash into the Greencastle treasury, but certainly some insiders decided to take advantage of a sudden and big move in the share price. While the optics admittedly aren’t great, we definitely see no reason to criticize the CEO for selling a portion of his holdings and locking in profits. In part, that’s his reward for moving the company along in a very positive and profitable manner. He doesn’t draw a huge salary. And as far as we’re concerned, the stronger Roodenburg is financially, as an individual, the better off Greencastle is as a company. We also wouldn’t be at all surprised if he used some of his recent profits to buy more Greencastle stock on the open market in the very near future, if indeed he didn’t already start doing so late last week. It’s always dangerous, as an investor, to base buy and sell decisions on what insiders are doing (buying or selling). Just one great case in point (among many) is Cline Mining (CMK). Cline rocketed to nearly $1.70 in early May. Insiders sold into the move which scared the retail market which dumped stock and brought Cline down to 90 cents. Just as quickly, though, the stock reversed course and tripled to a new high of $2.73. Hmmm. Interesting comparison. Last Thursday, Greencastle dropped all the way down to 36 cents from a high of 63, a 43% plunge - similar to Cline’s drop. A triple from 36 cents would mean $1.08 on Greencastle, right around our three-month target! Stay focused on why Greencastle is such a sound investment and ignore the unimportant noise and the little bit of negative chatter that always accompanies a stock that has made such a significant move.
Greencastle’s best days are ahead. Quite simply, VGN is a tremendous “value play” with plenty of sizzle and spice to send it to new highs.
Disclaimer
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