SSL--from a top service that takes no fees from any company mentioned or analyzed
Question: I have been watching SSL go up, up, up. Would you buy at current level, or buy the warrant? If the warrant, which one appeals to you. Thanks
Answer: We would generally always suggesting avoiding any investment with a fixed time expiry. Yes, the leverage is good if things work out. But if it doesn't work out you have an asset that potentially could go to ZERO even while the company remains very solvent. Sandstorm has certainly done well. We think the stock is buyable here, for those comfortable with the sector and its risks. Gold companies should do well in QE3, and gold had a very strong third quarter. The quick recovery from SSL's recent financing is very encouraging, and its recent deals (such as Colossus) look good.
We generally prefer to recommend buying strength rather than weakness. SSL also is now of a market cap ($1 billion) where new investors will start taking their first look at the company, and they will probably like what they discover.