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Aaron Lojewski
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Mr. Lojewski is a graduate student at the University of Alaska Fairbanks working on a Master of Science in Resource Economics. He has a Bachelor's Degree in Finance from the University of Alaska Fairbanks and is an avid investor.
  • Sandstorm Gold: A Clarification  3 comments
    May 20, 2012 4:32 AM | about stocks: SAND, STTYF

    This article is for any company that trades on the TSX or TSXV exchanges in Canada and is also available to US investors via the OTC market makers and is a grey market stock. I will use Sandstorm Gold (sndxf.pk and sndxd.pk (post RS)) as an example. People sometimes think Sandstorm is a pink sheet stock, they think there is US volume and Canadian volume, they wonder why it doesn't trade on certain days, and they wonder why they can't find US financials for it from sources like the Securities and Exchange Commission.

    A Pink Sheet stock?

    It is easy to use a site like Yahoo to pull a quote of SNDXD and see that it is listed as SNDXD.PK, Google uses the ticker PINK:SNDXD, and seekingalpha also gives the ticker a .pk ending. When I was first learning, I thought that these where all pink sheet stocks because of the end in the listed ticker. Wrong! Here is how to find out. Go to http://www.otcmarkets.com/home and look up your company. In the top right of the quote you will see what tier of Over the Counter Securities it trades on. With SNDXD you will see it is a Grey Market security, not very comforting. Here you can read about the difference in tier levels, http://www.otcmarkets.com/otc-101/otc-market-tiers.

    Grey Market
    There are no market makers in this security. It is not listed, traded or quoted on any U.S. stock exchange or the OTC Markets. Trades in grey market stocks are reported by broker-dealers to their Self Regulatory Organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites so investors can track price and volume. Since grey market securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and Best Execution of orders is difficult."

    US and Canadian Volume?

    It is easy to use google, yahoo, or seekingalpha to look up the quote and it gives a volume reading. The logical assumption is this is the US volume. If you go look up the company with its TSX on a site like tmx.com you will also see a volume figure. Again the assumption would be this is the Canadian volume. Here is how it works in reality.

    "There are no market makers in this security. It is not listed, traded or quoted on any U.S. stock exchange or the OTC Markets."

    When you place an order with the OTC ticker what you are doing effectively is routing your order via your broker and OTC to the TSX. If you have live level 1 and level 2 quotes on the TSX / TSXV you can verify this. If you trade X shares with the OTC ticker the OTC quote will record X additional volume. These shares are traded in Canada on the TSXV so the volume is first recorded there. If 100,000 shares are traded directly under the TSXV ticker and 10,000 via the OTC ticker you will see 10,000 volume for the OTC ticker and 110,000 for the Canadian ticker. All the volume is Canadian, there is no US market. You cannot add the OTC volume to the TSXV volume to get total volume as the TSXV is already all inclusive and you would be double counting all the trades executed via OTC.

    Why Isn't Sandstorm Trading Today?

    This company is Canadian. Should the TSXV be closed due to a Canadian holiday, Sandstorm will not trade. Remember:

    "There are no market makers in this security. It is not listed, traded or quoted on any U.S. stock exchange or the OTC Markets."

    To get a list of Canadian holidays go here: http://www.tmx.com/en/about_tsx/market_hours.html

    Why Can't I Find US Financials?

    Remember, your company is Canadian and has no US listing. If you want to find the financials most have them on their website. The database to search that is the Canadian similar to SEC Filings is SEDAR. Learn how to use SEDAR and the entire financial document data base that is publicly available will be available to you

    Stocks: SAND, STTYF
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Comments (3)
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  • roadhog
    , contributor
    Comments (5) | Send Message
    Thank you very informative.
    20 May 2012, 11:13 PM Reply Like
  • topshelf
    , contributor
    Comments (93) | Send Message
    Sandstorm Gold, SNDXD.pk, will be listed on the NYSE/AMEX in a few months and US Investors will become aware of it. Another worth doing your DD on is STVZF.pk, one of Sandstorm's Royalty holdings. These 2 are all the exposure I feel I need in the Gold, PM Sector.
    SilverCrest began Production late last year, 2011, Earned 7 cents in Q1, and currently about $2 with Targets in the $3.75 to $5.75 range




    Gold delivered to Sandstorm was 1,940 ounces




    SVL is one of the few stocks out there where the analyst targets are all moving upwards. Jennings has practically tripled from $2.25 to $6.50 while Canaccord started higher at $4.00 and has since raised it by 44% to $5.75. Even Stonecap's which was released just over a week ago is 65% above SVL's current price. GLTA
    26 May 2012, 03:31 PM Reply Like
  • Aaron Lojewski
    , contributor
    Comments (4) | Send Message
    Author’s reply » Topself I agree with you that more upside is possible by owning the partners directly. For myself though I do not own them. I think the additional risk you take on is much greater than the additional upside. I do however watch the partners stock movements. If I am to busy to evaluate the individual streams watching the partners stocks is an excellent measure of the health of the stream that is fast an easy.
    27 May 2012, 03:18 PM Reply Like
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