Thursday, October 30, 2008

Trading Post (digging Brazil edition)


Great to see the junior miners generally ignoring the drop in metals today, as value hunters continue to snap up bargains.

Canada's National Bank picked up one million shares of Gold Hawk (CGK.v) at 3c just after the bell this morning, with Can'o'corn the seller. CGK.v now at 3.5c

Malaga Inc (MLG.to) at $0.15 continues its nice run after we mentioned it at 10c yesterday. If you'd grabbed some then (and there were plenty available) you'd be 50% up by now.

Fortuna Silver (FVI.v) up two spots at 50c and showing plenty of life on continued strong volumes. Yes it's my favourite stock in the whole wide world, but it's my fave for very good reasons. Reason 1) it's way cheap (for reasons 2 to 547, please mail me).

Away from the diggers, Brazil and its banks had a great pop this morning but the novelty of having Ben Bernanke give them free money is already wearing off. Our benchmark bankstock Itau (ITU) was up 12.7% earlier. It's still up nicely, but the gain is down to 7% on the day. ITU volumes are good without being exceptional.

Mercado Libre (MELI) at $13.50 is another company with plenty of Brazil exposure that's coming back from the discount basement. According to my casio you can pick this up for 5X fwd PE right now. That's cheap for this kind of growth profile. Remember that MELI passes the key test of any stock right now, and that can be summed up in three words: CASH FLOW POSITIVE.

Finally, another to consider is SBS, the Sao Paolo water stock. A friend of mine who knows his stuff is very hot about this stock at this price. After running the slide rule over the numbers, I see what he means.