Once upon a time Inco was one of the premiere mining companies in North America, and certainly a major force in base metals production -- particularly nickel. Then they bought out Diamond Goldfields at a high price to gain control of the largest untouched nickel deposit in North America, and the company has largely been slipping and sliding downhill ever since. In between 1995 and 2001 for example, Alcoa, the largest aluminum manufacturer in the U.S. doubled in value, and currently trades at a P/E of 21.5. Inco, by comparsion over the same period of time has halved in value, and currently trades at a P/E of just 9.5. A large debt burden and constant regulatory hurdles on their new nickel properties have been the ever-present drags on performance.

But a month ago, Inco's CEO was ousted. The stock has been showing good relative price behavior even while the overall equity market has been weak. Our Fibonacci bands on the monthly chart further suggest an eventual recovery toward a $30 U.S. price target.

We like Inco here far more than we like Alcoa -- particularly as the U.S. economy softens and aluminum demand for auto production isn't likely to be particularly robust.

So here then is yet another paired trade to add to our previous suggestion of long CSG versus short KO. With so many of these ideas recently percolating in our heads, maybe Sand Spring Advisors should open a long-short hedge fund itself.

It also may be of interest to some as well that because so much time (and thus timeliness) has now transpired, we recently released three of our 2000 subscriber-only articles. These now appear under the public Earlier Articles section of the website. Perusing through them may give one a sense of the added premium level of analysis we provide to subscribers.

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Sand Spring Advisors provides information and analysis from sources and using methods it believes reliable, but cannot accept responsibility for any trading losses that may be incurred as a result of our analysis. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities, and should always trade at a position size level well within their financial condition. Principals of Sand Spring Advisors may carry positions in securities or futures discussed, but as a matter of policy will always so disclose this if it is the case, and will specifically not trade in any described security or futures for a period 5 business days prior to or subsequent to a commentary being released on a given security or futures.