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TSX Venture Exchange Minefield for Investors


This is where Canada's best companies reside.

Canada's high-risk TSX Venture Exchange is a minefield for investors. For every highly touted success story, there are bankruptcies, trading halts, frauds, and other creative means to achieve corporate failure. On the other hand, there are some amazing success stories that move on up to the TSX Exchange where Canada's best companies reside.

In a business where successes must be celebrated, the TSX Venture Exchange has just created its TSX Venture 50 list. These companies exemplify the rewards of high risk investing with an average 2009 return of 410%. I'm pleased to say that my Big Picture Speculator newsletter caught more than a few of the companies making the list.

The 2178 companies listed on the TSX Venture Exchange as of December 31, 2009 were culled based on market cap (>$5 million), share price (>$0.10 on December 31, 2008 and >$0.25 on December 31, 2009), and duration on the exchange (>1 year).

Then the TSX Venture 50 companies were ranked based on four equally rated criteria:

1. share price growth

2. trading volume

3. market cap growth

4. analyst coverage

While this is a backward-looking lens for the most part it, there's a good chance that a future Canadian household name will make the list on its way to the stratosphere. My search for the prior year's TSX Venture 50 list proved fruitless and I was able to confirm that the TSX Venture Exchange didn't put out a 2009 list. Much like the great hockey drought of 2004-2005, there was a lockout on junior stock market power plays in 2008.

Companies were broken out into the following categories:

1. Clean Technology

2. Diversified Industries

3. Mining

Oil and Gas

5. Technology/Life Sciences

For starters, we'll look at the top-10 Clean Technology companies:

1. BioExx Specialty Proteins Ltd. -- low temperature protein extraction from canola

2. Wavefront Technology Solutions Inc. -- dynamic injection for oil recovery revitalization and cleanup of shallow ground contamination

3. Sustainable Energy Technologies Ltd. -- power inverter platform which converts extra low voltage direct current inputs into grid quality power with very high conversion efficiencies

4. Western Wind Energy Corp. -- wind power in California, Arizona and Ontario

5. Sierra Geothermal Power Corp. -- geothermal properties in Nevada and California

6. Nevada Geothermal Power Inc. -- geothermal properties in Nevada and Oregon and a geothermal power plant in northern Nevada

7. SmartCool Systems Inc. -- reduces electricity usage and demand of refrigeration and air conditioning compressors while maintaining temperature and humidity performance

8. Alternative Fuel Systems (2004) Inc. -- designs, develops and produces automotive components, specializing in the alternative fuel marketplace

9. Catch The Wind Ltd -- fiber optic laser wind sensing system

10. Enpar Technologies Inc. -- environmental water treatment company

A few of these juniors, like BioExx Specialty Proteins, will graduate to the TSX Exchange. Others like Sierra Geothermal Power are likely to be acquired or merged out of existence, a common fate for TSX Venture companies.
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