hwo.to has been on a tear because of a series of promotional mentions. First it was Jason Donville which sent the stock over $3 for a while before it later pulled back but then it got coverage by a couple of CDN firms a few weeks later with price targets of $4+ and another mention on BNN by some other guy. Is this additional attention a co-incidence or are people riding the coat tails of Donville, who right now is one of the gurus du jour here in Canada? You know what? I don't care. This is a gift and I will gladly receive it. I've been selling into this strength and I really stepped up the selling Friday as the stock had a big surge. I'm only left with a residual position at this point which I will unload if the stock opens higher Monday. Here's the thing about hwo. The stock is by no means overvalued but unless they win new business, the next few quarters will be flat at best...they will probably show a bit of softness. Long term though, the company should do very well given their presence in PNG. So while it's nice that hwo is finally getting some well deserved recognition, these kind of promotional surges run a high risk of being short lived if there's nothing exciting in the way of news/fundamental developments. The stock is now overbought on a daily and weekly basis which in the past led to IT tops. Given all the above, I just had to ring the register here with this spike.
At one point hwo represented 55% of my portfolio. I bought my first shares 2 years ago at $1.20. My average cost was $1.45 and I received lots of dividends along the way. Although I got partially shaken out at $2, the stock has been very good to me and the bulk of my position was sold above $3. For a company that has been producing solid, consistent results, it was often unbearably volatile. Last year at this time the stock was tanking hard for no apparent reason giving me great grief. This time around the stock has surged giving me a euphoric feeling and I so I think I'm doing the right thing fading myself here. If the stock keeps surging without me, it's obviously going to suck but as I've been saying for some time, my conviction level with hwo has declined this year and I can't be a strong holder anymore at these prices. It's important to be disciplined and not let greed (and fear) get the better of you.
I will definitely continue to keep close tabs on hwo because I still believe the company and the stock has a great LT future...I just think the risk/reward equation for the next 6-12 months makes it worth selling. I will look to redeploy the proceeds of this sale elsewhere.
Thank you Donville and others for the early Christmas gift!
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