How often is the market wrong about a company? Does a dip signify an opportunity, or a warning? Can we look to historical performance for answers?
Amidst a sea of global economic uncertainty and confusion, last week was one of tough questions for investors on the Stockhouse Bullboards. Some of the most popular companies on the website suffered setbacks, while other small caps gained attention as investors looked for potential plays.
Stockhouse users are keen about big swings and small cap opportunities alike, so tapping into the Bullboards can show us what’s captivating value seeking investors. This week, we highlight three plays that drew a lot of attention.
One month after
Bombardier Inc. (
TSX:BBD.B,
Forum)
eclipsed the top industrial Bullboards when it forecasted a hugely disappointing year and floated the idea that it was departing the commercial aviation business, the Canadian manufacturer was the most-viewed Bullboard across all sectors this week. The big news? On top of selling its venture in the A220 airliner, the company announced it was
exiting the rail business as well.
The initial drop for Bombardier shares in January to $1.28 on Jan. 17 was quickly starting to recover, hitting $1.74 on Feb. 13 when the company released its
full-year financial results. However, the
revealed train deal on Feb. 17 and massive debt leftover for Bombardier quickly brought shares back down to $1.52 on the following day.
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Investors and BBD Bullboard faithful alike are starting to wrap their head around the idea of a Bombardier focused solely on private luxury airliners, and the reactions are understandably mixed. Some worry the deal will fall through and Bombardier will be left scrambling, while others like Stockhouse Member
ManyQuestions see the market overreacting to a necessary long-term downsizing.
“Most on this board see the long-term benefit of downsizing and knew the sale was coming. Unfortunately, the larger public is probably reacting to the sale of both the rest of the C series and the trains. Cooler heads will prevail in weeks to come. That's why the analysts are rating this an overperform and buying opportunity.”
One of the clearest opportunities for investors is before and after earnings releases, and last week the new play on the metals and mining Bullboards was
Pretium Resources Inc. (
TSX:PVG,
Forum). Shares of the developing Canadian exploration company closed at $12.72 on Feb. 11 before dropping to $9.98 the following day on poor earnings results.
A glance at PVG’s six-month chart show that this is a story that might be repeating. When the company released its quarterly earnings
back in October, shares suffered a similar massive drop, but over time the sentiment and share price for Pretium recovered. Understandably, when the Feb. 12 release of
2019 fiscal results and reduced production outlook was met with a similar drop, investors quickly started taking a second look.
The question on the PVG Bullboard is simple: are we witnessing a story that’s about to repeat? One of the positive notes was the search for a new President and CEO, which meant for many that the worst was behind them. But as Stockhouse Members like
paths pointed out, it’s getting tougher to stay positive the second time around.
“…I see this as a low point in the life cycle, and I doubt there were any negatives left in the closet undisclosed, so this I think is as bad as the outlook going forward will ever get. Seems the market may be exaggerating to the downside.
…We saw before that things never turned out to be as bad as the critics called for, however, also often seemed not to turn out as good as what the company expected, with the company scaling back projections, then still having difficulty meeting them. I found it slightly more difficult to stay enthusiastic about this, although I was not feeling negative either, more towards neutral...”
(Post: RE:Another dose of reality)
A new face has emerged on the technology Bullboards to challenge for the top spot:
NexTech AR Solutions Corp. (
CSE:NTAR,
Forum). The AR commerce platform provider began to see its share price rise
back in November, and since that initial climb has had an up-and-down 2020. A month ago, NTAR shot up from $1.81 on Jan. 14 to $3.00 on Jan. 22, but last week saw complete the fall back to $1.69 on Feb. 10.
Looking at the company’s news feed, it’s easy to pinpoint the cause for its recent rise. The big news on Jan. 14 was a
signed deal with gold junior
Romios Gold Resources Inc. (
TSX-V:RG) that saw its AR platform enter the mining industry. The slow but continuous decline since then, however, was harder to pin down, with NexTech announcing on Feb. 11 it was
being targeted for short selling by researchers Hindenburg Research.
On the NTAR Bullboard, the last week has been eye-opening and, maybe surprisingly to many, reassuring. The quick and multifaceted response by NexTech to Hindenburg’s claims against the company, combined with reports of coordinated short selling, is assuaging many of the concerns that investors had. Alongside new reports of the rapid rise of the AR market, Stockhouse Member
matt2018 highlighted that moving past this will be a massive boost for the company.
“…there is going to be many players vying for a piece of the AR business. Tons of money to be made. You just need to have your product rolled out before all the copycats come out. Maybe this whole Hindenburg thing (if it can be crushed), will serve as a coming out event for NexTech. It's publicity no one wants but if you can defeat it and move forward from it, it's unlikely the doubters will surface again...”
(Post: RE:A competitor surfaces)
The past week also saw the energy sector continue to draw significant attention on Stockhouse, as the increasing sentiment on the industry was thrown a curveball by the ongoing rail blockades. The big question is how the situation will play out in the end, and whether energy stocks can rally or renewable energy will take the crown over the year. We’ve been asking our users what they think and so far, the results have been trending positive but extremely mixed.
With everything that’s been happening in the world, we’re leaving the poll open for one more week to see how things are changing! Make sure to head to the
Stockhouse homepage or click the image below to cast your vote and let us know where you believe the energy sector is headed in 2020.
(Click image to go to the poll)
Following a shortened week on account of the long-weekend, next week should bring a return to normalcy. Unfortunately, with new twists affecting the markets left, right, and centre, something will always come up that throws a wrench in things. The best place to make sense of it, and to see who’s making money, is diving into the Stockhouse Bullboards. For previous editions of Buzz on the Bullboards:
click here.
FULL DISCLOSURE: NexTech AR Solutions Corp. is a client of Stockhouse Publishing