BAD, Badger Daylighting

Daylighting is the illumination of indoor spaces by natural light. Definitely not what this company does. It sucks. These fellows have about 500 trucks with huge airtight tanks on them that they use for all manner of construction work, mostly in places where the sun does not shine. The process is simple, make mud and suck it away. It is very popular as it causes very little collateral damage. Once upon a time they were income trust but converted back to an incorporated entity which makes getting charts a little difficult. This one is from the Globe & Mail;

BAD 2012 l

In 2002 I had this stock in my cross-hairs for a buy, but being my worst enemy, never got to pulling the trigger. Now we are at $27.05, recently. It was brought to my attention as it is one of Mr. Peter Hodson’s stock picks (see FP July 7). He has impressive record and left his post as president of Sprott, reportedly for the simple, but impressive reason, that he had trouble stomaching the overall predatory nature of the business, quite an admirable confession or, if you prefer, accusation. This time I think he might be missing the mark.

The recent high at $27.50 is $4,55 higher than the highs back in 1998, or about 20% higher. This is well within the acceptable range for B-waves and even a larger A-B-C (in green) with a target of $32, though borderline, might still qualify. Even so,  it is very unlikely to be correct. Looking at just the we get;

Bad 2012 s

A very nice 5 wave sequence, with a throw-over in the 5th, a dive down for a and a retracement to the line for b, should follow down to the lower trend-line and then wave 4 of previous degree at about $16 (the two charts do not have the same resonance, so there is a difference in the readings!). One would expect this to occur even in ongoing bull market, too big a drop to ride out in our opinion.

If the B-wave concept is correct, the stock will fall at least to $10 if not more. This is not a high-tech business. In its rudimentary form it is what all rural people will be intimately familiar with as sewer or sceptic tank cleaning, a mom & pop business that is sensitive to real estate transaction volumes. In any event this is excellent example in economics where bad is indeed good, or should that be was ? As always time will tell but we would sell now.