Slowly but surely. That describes the
Toronto Stock Exchange's
climb to new records. Those of you who follow our column regularly may be wondering why we are paying so much attention to the action of the overall market lately. After all, we have always said that we don't own the market, we own individual stocks. Well, you're absolutely right, but we do like to see the overall market reaching new highs, just like we want to see individual stocks reaching new highs.
If our market can start to create some momentum on the upside as it goes through its resistance, we can expect some of that money waiting on the sidelines to come into the market. Since we believe that we are in the best stocks our market has to offer, we expect the new money to find a home, with the stocks we already own adding to their momentum.
As the market goes higher, just coming off a period of inaction, it is always interesting to see how the "picking field" increases every week. Not too long ago we were harping about having no stocks to choose from because as you already know our "picking field" is the new high list, and a few months ago there were few new highs. Now it seems like every week more stocks are being added to our favorite list.
One of the stocks that appeared on the new high list was
(BSP:Toronto). Beamscope sells, markets and distributes video games, educational software, entertainment software and small home and office products. On the hardware side it sells PCs and printers as well as CD-ROM hardware. BSP has a small number of shares outstanding at 11 million relative to its revenues of $327 million and is growing at 60%. This makes us very excited because this company has the potential to grow exponentially. Beamscope has also just secured a joint venture with one of Brazil's largest and most successful computer distributors, allowing it to enter Latin America's largest market.
We started to accumulate a position at $12.85 on a breakout. The stock went up about a dollar, then consolidated for a couple of weeks and subsequently broke out again (see
(YBM:Toronto). At that time we were at a point where the stock was either going to go through its resistance or was going to fail. Since then it shot through the resistance, rose as high as $18.50, pulled back to $16.20, then broke its old high and made a new high of $19.60. Friday it traded at $19.15 (see
Greg Guichon and Michael Soni, along with their team, manage money internationally on behalf of high-net-worth individuals and institutions. Guichon and Soni, who are based in Toronto, invest exclusively in Canadian stocks. Their column appears every Monday in TheStreet.com. Under no circumstances does the information in this column represent a recommendation to buy or sell stock. Your email is welcome and may be sent to