Q: Canada Nickel is on a tear with recent announcement from the Ontario government. Four years ago it was close to $4.00. Now that the prediction is to have shovels in the ground by the end of the year can you see this company breaking through $4.00 even though it is pre-revenue? And if owned a lot of shares would you let them ride?
5i Research Answer:
We like positive momentum and certainly things look good here. $4.00 would be nearly a double and we would be cautious on 'assuming' this in the short term. If the metals sector reverses things might get ugly with quick profit-taking. But the trend is your friend, and with news and matching timeline the stock certainly could do well. We would be fine letting a position ride, but would caution on size. If one assumes more gains, exposure is going to only increase further.