Pinetree Capital Corp. – Still Holding

by JDH on March 17, 2007

There has been a lot of discussion this week about PNP.TO – Pinetree Capital Corp. over on the Buy High Sell Higher Forum. Some of the comments are positive (just look at the increases in the stock price over the last year or two). Some of the comments are negative (Pinetree has a Net Asset Value of less than $10, so rather than paying $22 per share, you would be better off buying shares in the companies they own).

Both sides of the argument have merit. The chart still looks positive, so for now that’s the side I’m on.

Pinetree Capital Chart

The up channel remains intact, the MACD has fallen to good buying levels, and, as the blue arrow indicates, there was a big spike in volume on Friday, the biggest volume day of the year so far, caused primarily by index fund managers buying in advance of Pinetree being added to the TSX index on Monday.

Obviously a company like Pinetree has risks. The CEO is under investigation by the OSC, which clouds the picture, and a drop in metal prices would hurt this stock.

However, for now, I’m holding, until the long term up trend lines are significantly violated.

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adriandunn March 21, 2007 at 7:02 am

Tell us when the chart doesn’t look good anymore. I know next to nothing about charting, but I do know the stock has underperformed its relevant sector (gold & mining) over the past few days. Tomorrow will be make or break for it when it reports 4th quarter earnings / holdings / NAV.

Oddly enough, it was added into the S&P / TSX Composite as a financial, since it is essentially a holding company with a bit of advisory business, however I’d love to see what kind of correlation it has with the other financials – probably none going to negative.

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