Pinetree Capital Ltd. – Time to take profits

by JDH on February 7, 2007

As the chart below shows, Pintetree Capital Corp (PNP.TO) is fading, and the uptrend line, intact since October, has now been broken.  I assume this is a temporary setback, so I’m going to sell half of my position, and get back in once the uptrend resumes.

How far will Pinetree fall?  I have no idea, but I don’t expect it will fall much, which is why I’m maintaining half of my position.  Feel free to post your comments over on the Forum.


{ 12 comments… read them below or add one }

eljefeford February 7, 2007 at 10:40 am

I noticed that Mega Uranium was down the same as Pinetree percentage wise. Coincidence?

JDH February 7, 2007 at 10:53 am

No, it’s not coincidence, since they are both run by the same people, and their prices tend to move together. They have both had a good run, so some profit taking is inevitable.

H February 7, 2007 at 12:11 pm

I assume you realize that Dines is recommending buying whatever shares you sell…..but everyone’s entitled to their opinion.

JDH February 7, 2007 at 12:40 pm

Mr. Dines latest Interim Warning Bulletin, issued yesterday, was lukewarm on Pinetree and Mega, which is presumably why they are down today, so he’s not recommending buying at current levels; it would appear he is recommending holding. His IWB of yesterday triggered me to look at the chart (which I look at every few days anyway), and I agree that a consolidation is likely.

Therefore I still believe that long-term virtually every uranium stock is a good buy, including Pinetree and Mega. In the short term, I like to pull back on stocks that are falling, and load up on stocks that are rising (ie. buy high sell higher).

Of course I could be completely wrong, which is why I like to hear everyone else’s opinions as well.

davidslane February 7, 2007 at 1:38 pm

I “heard” that Dines said to buy Mega under $6.00.

That should give Mega a floor.

That doesn’t sound too luke warm.

ec February 7, 2007 at 2:34 pm


I am a newbie. When you say that “buy under $6” gives Mega a floor, and say it doesn’t sound too lukewarm, do you mean that Dines is still very bullish on Mega?

I got in very late at 6.54 when it seemed like it was breaking through the 6.5 level for good.


U235 February 7, 2007 at 4:52 pm

I may be a little cynical about this market business but I have a hunch, and it is only a hutch (please post your thoughts) that Dines was Luke warm at best on Pinetree and Mega because he is going to be giving his only live interview this year (via satellite) at the conference in Vancouver this weekend (Money Talks with Michael Campbell). Now I have studied Mr. Dines and regularly search for any interview he does. There is a trend that he will give his opinion on a stock and the next day or shortly after his opinion the stock spikes.
Maybe Mr. Dines is waiting for Pinetree to go lower before buying at the end of trading on Friday and then pumping in his interview on Saturday or Sunday.
It may be wise to buy Pinetree on Friday, and sell Monday afternoon.

My thoughts.

JDH February 7, 2007 at 5:27 pm

Very interesting comments.

To davidslane and ec, yes, Dines did say to try to buy Mega below $6; I will post a chart to show why he said that (it’s an obvious support level). Mega closed down 16 cents today (Wednesday) at $5.98, so when Dines said that yesterday, Mega was around $6.20 or so. That’s why I said he was lukewarm: he’s telling us to buy, but only after it’s gone down.

As for U235’s cynical thoughts, I find them to quite interesting. Regardless of whether Dines’ motives are pure or not, he has a following, and if he says buy, people will buy. I think we should all keep a close eye on the action on Thursday and Friday, and if the prices keep falling on Mega and Pinetree, I agree that it may be a good buy point, because of the interview, and because he is publishing his newsletter on Friday, which will cause an uptick on Monday for anything he recommends.

ec February 7, 2007 at 7:38 pm

On U235’s comments,

From the other posts on this website, it seems that when Dines publishes, there is a major uptick in the stocks anyways. The Pinetree example was interesting, and also SAN.v, and MAW.V had big upticks when they were first added to the list.

I guess my worry, being one of the latest entries into PNP at 19.14 and MGA at above 6.50, is that if Dines continues to be “not-so-enthusiastic” about these two they might have quite a drop. I can’t see him giving a lukewarm IWB report and then flipping that on the interview… could you?

For now, I am holding these two unless there is strong opinion I should sell these at a loss. Comments?

JDH February 8, 2007 at 4:58 am

Personally, I would not sell now at a loss, since I believe this is just a temporary consolidation. Unfortunately I don’t have a crystal ball, but here is my best guess as to what will happen (and since it’s a guess, there is a good chance I will be completely wrong).

Pinetree closed on Wednesday at $18.15, down 59 cents (Canadian). Mega closed at $5.98, down 16 cents. Virtually all other uranium stocks were up on Wednesday (JNR was up 8%, Denison was up 4%, etc.). Uranium is at a new high (see chart on the right hand side of this page), so the fundamentals are good, which means Pinetree and Mega won’t be falling forever.

It’s possible that we will see another down day on Thursday for Mega and Pinetree as investors look at their holdings and then decide to lock in some profits. That probably means that a good buy point will occur at the end of the day on Thursday, or on Friday.

That will allow Dines to say in his newsletter, to be released after the close on Friday, that “as predicted, Pinetree and Mega entered a consolidation, which is now over, so now is the time to buy”. We then have a big uptick on Monday.

Or not. We shall see.

maxine February 9, 2007 at 8:12 am

Vectorvest gives pnp a book value of around 40.00. I wouldn’t be selling any time soon.

adriandunn March 15, 2007 at 10:01 am

Maxine, Vectorvest gave you a “Current Value” for PNP, not Book value. Based on their earnings forecasts, they figure PNP is worth $47 (as of today, March 15th).

There is only one problem with this, and it is a big one. ALL of Pinetree’s “earnings” are in fact one-off investment gains. If their investments trade flat (which they have done from Dec 31 until now), their earnings drop to 0… even worse, if the value of their investments falls, they will then have negative “earnings”. They have a tiny bit of invesment-banking business on the side, but this actually seems to cost them money, not earn them any.

So, Pinetree’s book value is actually less than $40, a lot less. Try sub-$10. They will be reporting next week, and I am predicting a NAV / share of about $8.50. This will make for a fabulous “earnings” statement, giving PNP a P/E of 3 if you extrapolate their quarterly earnings forward indefinitely. Howere it is still an outrageous valuation for a stock which is primarily a holding company of small-cap mining/energy stocks that is trading about $22, and I predict a quick run below 20, possibly lower than 18.

And things will only get worse from there. If the gold/uranium/energy markets flatten out, Pinetree will have several quarters of zero or negative earnings, at which point people will probably only pay as much for the stock as their investments are worth. Which as I mentioned above is less than $10. Unless there is a huge rally in the market between now and the end of March, my calculations show PNP’s NAV to be pretty much flat since Dec 31, and so their following quarterly earnings report (for the quarter ending March 31) should show earnings of about $0.

There has been a lot of volatility in the stock lately, partly due to the overall markets, partly due to the price of uranium (only 40% of their portfolio don’t forget), and possibly due to some short squeezes. I am currently short the stock, and there have been numerous times in the last 3 months were I couldn’t get any locates to short more. That hasn;t been a problem over the past couple of weeks though, and although I am expecting some volume to go through in the stock tomorrow when all of the indexers need to buy PNP (as it has been added to the S&P / TSX composite), from there I see it trending down to earnings on the 22nd, followed by a quick decline.

We’ll see… I’ll be happy to buy some of your shares from you at 18 if that’s where it trades down to next week. Some of their holdings probably have upside left to them, but PNP will almost assuredly be a horrible investment at these prices ($22.22 currently.)