UBS Articlehttps://www.globeinvestor.com/archive/gam/20000725/RTIPP.html
TIP SHEET
- Tuesday, July 25, 2000
Unique opportunity: Toronto-based Unique Broadband Systems Inc. (UBS-CDNX), a developer
of systems for sending large amounts of data over wireless communications networks, is a "buy,"
according to Bunka's Outsider's Overture. The newsletter, which can be found on the Web at
https://www.canspecresearch.com , says Unique is working on a wide range of projects, including wireless
video systems in Hong Kong and wireless transmission systems for remote regions of Russia. The stock
traded at $4.43 yesterday on the Canadian Venture Exchange, down from $17.75 in February but up
from 51 cents last August. The company says former Prime Minister John Turner, Export Development
Corp. chairman Patrick Lavelle and former Royal Bank of Canada chief economist Edward Neufeld plan
to stand for election as directors. This spring, the company sold 4.1 million shares at $10 each.
Be prepared: The robust rally on the Toronto Stock Exchange still has some life left in it, but it is not
unlimited, warn David Tippin and Ron Meisels of P&C Holdings in Montreal. They suggest investors
prepare for a mid-August high on the market and a subsequent low in October. The warning stems from
their reading of several events in the market. "Our momentum indicators have weakened, the recent rally
was due mainly to one stock [Nortel Networks Corp.], the oils are going through a correction and the
number of stocks hitting new 52-week highs is diminishing," they wrote in a recent report. Also, "we are
getting closer and closer to the 'dreaded' October period." The expected October low will probably
represent "the last major buying opportunity of the current bull market," they said. They anticipate that
low will be followed by a recovery that should take the Toronto market to new highs in 2001.
Reality check
One year ago: Analysts had mixed reactions when Rand A Technology Corp. (RND-TSE), a
Mississauga-based reseller of engineering software and hardware, released its second-quarter results last
July. Revenue for the quarter ended June 30, 1999, was $105.4-million, compared with $80.1-million in
the year-earlier quarter. But profit, at $3.2-million, was down about 10 per cent. The reaction? Analysts
Ralph Garcea of Scotia Capital Markets and Barry Richards of Sprott Securities maintained their "strong
buy" on the stock, with 12-month stock price targets surpassing $20. Byron Berry of Yorkton Securities
downgraded Rand to "underperform" from "hold." Brian Semkiw, Rand's chief executive officer, said the
company planned to look at boosting growth by acquiring other resellers. On July 26, 1999, Rand
dropped $1 to close at $12 on the Toronto Stock Exchange. A year later, it closed unchanged yesterday
at $9.50. In late April, Mr. Berry gave it a "strong buy" rating.
Investing ABCs
Stock swap: Why pay cash when you can buy companies with your stock? That's been the thinking of
late, especially in the technology sector where companies have been on an acquisition spree, with equity
as the currency of choice. There are a couple of ways a company can finance acquisitions -- pay up with
cash, perhaps by issuing debt, or by using its stock to cover the cost. Say, for example, Company A buys
Company B for $4-billion in an all-stock deal -- then Company A simply gives stock valued at $4-billion
to Company B in exchange for its assets. That's called a "stock swap."