Casimir is a small investment bank that seems to underwrite a lot of junk (like Roth Capital, Rodman and Renshaw, etc.). I am currently trying to go through all of the stocks they have underwritten recently for potential shorts. I’ve compiled a list of these stocks as a Google document with borrow costs from IB.
Stocks that I have analyzed so far
This company struck me as an fairly obvious scam. It’s hard for me to imagine an oil and gas scam more obvious than this (unless this was a pure pump and dump with no real business whatsoever). I’ve already written a post on the company. An August 2011 filing from a securities lawsuit against the company basically lays out the short thesis in more detail.
Casimir Capital has a “strong buy” recommendation on this stock. (Investment banks almost always have positive ratings on stocks that they have underwritten.) Their buy recommendation on this stock is actually how I found about Casimir in the first place as I was looking for news on Miller Energy.
Yukon-Nevada Gold / Veris Gold, Canada Lithium
I have blogged about why I think both stocks are bad companies. Unfortunately, I did not short Yukon Nevada.
There are actually things about this company’s regulatory filings that I like. In the MD&A, the company provides the numbers behind its forecasts about the future cash flows of its properties. This type of information is extremely helpful in analyzing the stock and I wish more companies would do it. Investors can take a look at the year-by-year numbers and check to see if the decline curve makes sense.
The MD&A makes it very easy to analyze the stock and to quickly figure out that they are selling stock because the company is trading above the net asset value of its reserves, which is after-tax and discounted to the present at 10%. Not surprisingly, the company is promotional and has very nice graphic design work in its annual report. Management strikes me as smart. I would not short this company.
Their flagship mine does not have the cash flow to prevent shareholders from being wiped out. See my writeup.
*Disclosure: Short MILL and CLQ. My positions in the future may change.