Galway Resources Breakout Secures October Stock Challenge Victory

This Halloween marked the conclusion of October’s Stock Challenge. For the first half of the month there were several lead changes with nearly 19 different members having a share of the top spot. However, during the first couple weeks of the Stock Challenge, no one was able to take a commanding lead. It looked as though we were headed for another photo-finish like in recent months (see: September 2012 and June 2012 final results).  That was the case until SchiffKnowsBest, of Ontario, hit what is known as a home-run in the junior resource sector and saw his lead pick, Galway Resources (GWY:TSXV), nearly double in value. The reason for the dramatic share price appreciation was because Galway announced:

“the execution of an arrangement agreement (the "Arrangement Agreement") with AUX Acquisition 2 S.àr.l. and its wholly-owned Ontario subsidiary (collectively, "AUX"), under which AUX has agreed to acquire all of the outstanding common shares of Galway (other than common shares of Galway held by AUX and its affiliates) (the "Galway Shares") by way of a plan of arrangement (the "Arrangement").

Under the transaction Galway shareholders will receive Cdn$2.05 in cash, 0.9 of a share in a new company to hold the Vetas gold project and 1.0 share in a new company to hold the Victorio tungsten-molybdenum project....Upon closing of the transaction, existing Galway shareholders will hold 90% of the Vetas SpinCo and 100% of the Victorio SpinCo. AUX will have the right to nominate one director for election to the board of directors of the Vetas SpinCo.

The Cdn$2.05 per share cash consideration represents a premium of approximately 47% over the volume weighted average trading price of Cdn$1.39 per Galway Share on the TSX Venture Exchange ("TSX-V") for the 20-trading days ending on October 18, 2012.”

This is why we play the juniors - for lucrative deals like the one Galway landed. This past summer investors could have filled their boots with Galway shares for roughly $0.80 per. Only a couple months down the road and the investment has nearly tripled - all this during what many are calling a depressed resource market.

SchiffKnowsBest proved yet again, as Pinnacle members always do, that there are profits to be made no matter what the market conditions may be.

SchiffKnowsBest’s second pick was Falcon Oil & Gas (FO:TSXV) which increased modestly in October. His overall return for the month was a very respectable 48.41% - good enough to win October’s Stock Challenge by more than a 10% margin.

Despite the markets - particularly the juniors - remaining in a funk for October, our members managed to bring home some strong returns. Below are the final results of our TOP 10 finishers, which only included one previous Stock Challenge Champ. There were 201 participants in October’s Stock Challenge.

Congratulations to Pinnacle member SchiffKnowsBest on his first ever Stock Challenge victory. He was already a member of the Pinnacle Prestige, but this victory catapults him up the ranks.

SchiffKnowsBest received 1000 reputation points to his Pinnacle Profile.  As well, and most importantly, he will receive our Stock Challenge ‘Winner’s Wear’ to ensure his victory is recognized by all of his friends back home. Our champions receive the winner’s only Pinnacle Package - which includes the finest of garments fit for a champion: The Stock Challenge Champ Hoodie and a Pinnacle Digest dri-fit golf shirt. Wear them with pride SchiffKnowsBest!

All the best with your investments,
 

 

The Pinnacle Team


October’s Stock Challenge Statistics:


Highest Return: 48.41%


Lowest Return: -25.65%


Average Return: 1.98%