Benj Gallander Clearwater Seafoods Inc. CLR-T WATCH Mar 06, 2018

Is it going to break up or break down? He likes stocks that base for a while and then break out. The sector has been weak but is now starting to get its legs. You may want to take a stab at this one although it has not broken its down trend yet.

He exited this about 9 months ago after a couple of bad quarters. He thinks the majority owners, who hold over 50%, will likely look to take this private at some time. They have missed several targets lately and he does not like the debt levels as they may trigger covenants in the future.

(A Top Pick Aug 29/17, Down 46%) He sold earlier in the year. They have a fair amount of debt and people thought they had monopolies but recently there were a couple of cases with licenses being awarded to other groups like first nations. Investors got worried about the balance sheet.

They used to hold this, but sold it a year ago following a couple of choppy earnings quarters. They had taken on sizable debt on an acquisition and have yet to see the fishing volume be in line with expectations of the street. They recently reported 5 times leverage on the balance sheet despite better earnings. This is not something they are interested in.

He doesn’t think the new tariffs will hurt the stock because they sell into Europe and Asia. However, the US has opened a lot of fishing areas, which has significantly depressed clam prices. The Canadian government also took away one of Clearwater’s clam licenses and gave it to an indigenous nation. However, there were ethical issues in that process and the license is coming back up for bids. In the meantime, it is going back to Clearwater for a year. That will help. In general, it is a good company that is facing a lot of headwinds. It also has a lot of debt. He isn’t ready to buy YET. He wants to see a turnaround in the pricing of their products.

Chart consolidates once in a while. The last one was sideways. This year it's seen a tame uptrend, and is on the verge of breaking the larger downtrend. The lows and highs are getting higher. Watch it--it could break out.

It has moved up. There has not been a major resistance level for it to break through. It is a showme story, though. Wait for it to get through $6 before getting in.