On the Canadian exchanges I have 3 stocks which look very promising indeed:

On the Canadian exchanges there are 3 stocks which look very promising indeed:

Started tracking FMI over a year ago when it was trading around $2, but never purchased any because it was trading on the "famous" Vancouver exchange. Finally overcame my VSE-phobia and picked up some on the 18^th December ’98 at $10.45. What a hefty price to pay for waiting a year, but it is going to be worthwhile.

Profile

FORBES MEDI-TECH is a Vancouver-based biotechnology company dedicated to research, development and commercialization of pharmaceutical and nutraceutical products derived from forest industry by-products. By extracting plant sterols from tall oil soap, a pulping by-product, Forbes is developing cholesterol-lowering agents to be used as pharmaceutical therapeutics and food supplements in the battle against heart disease. Forbes is also developing innovative technology that converts plant sterols into pharmaceutical fine chemicals, essential in the manufacturing of various pharmaceutical steroids. Using the base products of these technologies, Forbes is further developing methods for the production of "higher value" steroids such as sex hormones and birth control agents

Background

Norvatis (Swiss pharmaceutical and food manufacturing giant) bought the option from FMI for the exclusive option to a worldwide license to use or sub-license FCP for use in nutritional products.(Jan 28, 1997)
FMI reported the results of its second limited human feeding trial, conducted at McGill University in Montreal using the Company's cholesterol lowering agent, FCP-3P1, with several significant implications. This study confirmed the cholesterol lowering results of the first trial conducted on subjects with normal cholesterol levels"
Forbes Medi-tech filed a patent application in the U.S. for the invention relating to the preparation and purification of sterol compositions from forest derived by-product (pulping soap). Also included in the application are the use of these compositions and derivatives as agents to prevent or treat dyslipidemias (high cholesterol levels).
Forbes Medi-Tech announced today that the VSE has accepted for filing a brokered private placement of 1,428,571 special warrants at $7.00 for gross proceeds of $10 million to institutional investors, including TD Asset Management (Dec 30, 1998)

FMI in preliminary discussions regarding manufacturing agreements for Androstenedione (AD) production and distribution. AD is a key steroid drug intermediate used in the manufacture of various pharmaceutical steroids, and represents a global market opportunity of approximately US$1 billion. (July 9, 1998)

FMI announced it is preparing to file a registration statement on Form 20-F with the United States Securities and Exchange Commission. Form 20-F allows foreign corporations to register securities with the SEC pursuant to Section 12 of the Securities Exchange Act of 1934.
FMI filed a patent application with the United States Patent Office that broadly covers a method to prevent and delay the onset of Alzheimer’s Disease using its unique plant sterol compositions (Mar 5, 1998)

FMI and Cargill today announced that the two companies have signed a letter of intent to evaluate the commercialization of a proprietary technology belonging to FMI. This technology is for the production of steroid precursors such as Androstenedione (AD) and Androstadienedione (ADD) from phytosterol compounds. Upon successful completion of this assessment, the parties anticipate forming a joint venture to commercialize the technology. (Dec 1, 1998)

Under the anticipated joint venture arrangement, Forbes is expected to provide a proprietary bio- transformation technology to the joint venture company with Cargill providing the required phytosterol compounds. Development efforts would be concentrated at Cargill facilities with the support from Forbes scientists. Cargill would be expected to retain the sales, marketing and distribution rights to the products. Further details were not disclosed.

FMI today reported that it has purchased a manufacturing facility in Amqui, Quebec from Bayer, an international chemicals and healthcare group. Bayer had used this plant for manufacturing, storage and distribution of natural flavor ingredients. (Dec 17, 1998)

Forbes is preparing this pilot facility for use in the upscaling and production of plant sterol compounds such as its cholesterol-lowering functional food ingredient, Phytrol™. The Amqui plant is a very timely acquisition and it is expected to require minimal modifications and enables FMI to quickly add production capacity in order to satisfy commitments for a product launch in 1999."

FMI issues a financial report for 3 months ended Oct 31, 1998 showing cash of 8M compared to $2.6M a year ago

Why FMI was picked

We live in a culture where heart disease is the number one killer and a big industry. Billions are spent annually on fitness machines etc that don’t work. Imagine being able to eat whatever you crave without worrying about how much cholesterol and/or fat you are munching down. Various food items are going to have the FCP and AD additives which works to REDUCE the cholesterol already existing in our bodies.

If you are going to put your money into this, please don’t take my word/propaganda for it, do me a favour, go to this site - http://www.sedar.com/dynamic_pages/assoc_docs_e/d00005117.htm and do your due diligence by assessing the information provided.

Certicom Inc (CIC:TSE)

This company employs the elliptic curve method in its approach to provide computer security. It’s the cheapest stock amongst the top security companies and has a 20 year patent on this technology. It is currently working with others to create a standards body for the elliptic curve technology. RSA’s (main security software developer) patent on similar security technology has expired and hence others are entering RSA’s market.

There is a small Calgary company called Jaws Technology (NASDAQ:JAWZ at $US0.45) with a better technology than CIC, but does not enjoy the brand awareness or marketing clout that CIC has built in the last 3 years.

CIC is currently trading in the $15 range which is more than attractive (was $43 a few months back) and has an upside potential to go up to $30 by Dec 1999

Cryptologic Inc (CRY:TSE)

Cryptologic Inc. (TSE: CRY) is ranked as the number one by the Americans in Gaming/Internet Casino software. Its industry-leading gaming software allows multi-player games (complete with player-to-player chat) in a 3-D environment. CRY sells this software to casinos and also is building a solid e-commerce business through its financial transaction software. This is one of the few profitable companies in the industry, earning $.61 per share in 1997 and on track to earn $1.50 per share this year. It trades around $10.50, which reflects a PE of only 7 on 1998 earnings.

The only problem that the experts in this field have about this stock is that it trades on what they described as the "boring Toronto Stock Exchange".

Quick Buck -New year present

The markets closed on Dec 31 1998 with Discrete Logic (DSLGF) at $18.875 and Autodesk (ADSK) at $42.6875. The agreed to conversion rate of the merger values DSLGF at 0.48 of ADSK share value.

This means that if ADSK is selling at $42.6875, then DSLGF should be trading at $20.49 (0.48*42.6875) instead of $18.875. DSLGF has been discounted by the market even though the deal is expected to be closed in the next 3 weeks. Once the deal closes DSLGF will be valued exactly at 0.48 of the price of ADSK shares.

For a quick 8.56% (20.49-18.875/18.875) gain in the next three weeks (assuming that prices remain the same) the shrewd investor will buy into Discrete before the deal closes.