"Sleep Well at Night Small Cap Stocks
A Supercharged Small Cap Stock PortfolioWell, it certainly looks like the psychedelic sector isn’t about to run together like it did in December or BTC stocks have since the breakout. It would have been nice to see BTC to continue to correct while psychedelics made a push this month, but that just isn’t going to happen. The inverse relationship is probably at and end with no mad retail rush to the sector happening any time soon. If anything, a continued push up in BTC will probably catalyze retail into Bitcoin stocks and certainly push the risk curve out. BTC momentum is much stronger than expected making me much more bullish on bitcoin stocks in February.
$30k seem to be a rock bottom price for now.
Momentum for psychedelics looked great up until last week and was a great place to hide out while everything was de-risked a bit by the Redditt traders. I was able to dump almost all my psychedelic stocks at a minor profit while managing to avoid paper losses in stocks like BITF.V which bottomed out at $2.30. The markets needed a good flush out and that is what we basically got. Gamestop and the markets certainly traded inversely the last couple of weeks as hedge funds had to sell everything that was working to cover their GME shorts.
The fact that many psychedelic stocks haven’t gotten back to where they sold off indicates Psyches are considered far out on the risk curve and was the first to get sold off. Although like a predicted, the stocks that recently did the financings with Canaccord have what looks like floors. However, the function that provides a floor to these stocks will do the same to provide a ceiling without material news, an institutional push, or a retail craze. Many of these stocks will most likely be range bound until the next push. It is probably wise to trim back the list to just the market leaders and that is what I have done with my trading account.
The ETF started off weak, fell from a high of $10.60 last week, it has found some footing at the $9 level and seems to be rising off of it. Canaccord is doing a virtual conference this week with many of the names they did bought deals with, but aside from a few percentage points on a couple different names it was a trade set up that failed. These are the first psychedelics conferences last week and this. The online virtual conferences where more meant as institutional investor awareness than for any retail momentum.
Although really, all it will take is one high profile celebrity revealing that they micro dose to change things. There is so much fresh paper with a slight risk off sentiment taking the steam out of this group. Its hard to see these stocks running as a group. I do however see distribution and accumulation in the sector and stocks individually doing well in a positive investing environment.
Its definitely become a pick em space quickly.
Understanding Psychedelic investments
Psychedelics investments can be broken down into three main categories.There are also mushrooms products companies that seem to be capitalizing on the wave, but in my mind, this is much more ancillary to the main part of the investment thesis. SPOR.CA would fall into this category. Maybe at some point there is a product crave, but that is probably a late blooming theme as opposed to a main idea in the investing thesis. If SPOR announces a Health Canada License application then that might be game changing for them. Why they don’t apply for one is beyond me. Seems like a bit of paperwork would add a whole lot of value.
But what do I know? Not much.
Instead of using a basket approach, I have gone through all the psychedelic stocks, read most of the MD & A’s and am focused in on 3 names for now. I am thinking there is a lot of paper to be eaten, certainly Canaccord holds a lot of warrants that they can short against the market any time they want. Impressive the amount of money they raised for many companies; however, I do think it puts a ceiling on the stocks. I want names that can eat through the paper given by Canaccord or names that scoffed at Canaccord controlling their share price for the next year.
- Red Light Holland TRIP.CA - $123M market cap
- HAVN Life Sciences HAVN.CA - $58M market cap
- Field Trip Health FTRP.CA - $205M market cap
I always say pick the industry leader and these companies are emerging as industry leaders. My thesis is very simple. Bruce Linton former CEO of Canopy Growth Corp is on the board and an advisor to Red Light Holland while Vic Neufeld, former CEO of Aphria is on the board and an advisor to HAVN Life Sciences which is almost a carbon copy of NUMI Wellness. That makes it pretty much a no brainer in my mind where I want to put my money. With the two former dudes in the weed sector who made multibillion dollar companies doing it again with psychedelics.
Field Trip Health is the other half of the legalization route. They own clinics where you go for psychedelic treatments and are also the places where most of these studies for the biotechnology side of it will be validated. Right? Seems like if Field Trip succeeds it will signal success with a lot of the IP that companies like MMED and Compass are currently building. So that seems like a great place to want to park my money first.
I know some have called FTRP and NM ancillary to the industry. They are in fact the nuts and bolts to the entire thesis. They are so integral to what is going on for both legalization and eventual FDA approval that you can’t consider this ancillary like legal non-psychedelic mushroom products that are more design to capture a retail craze and is an entirely different market. The legalization rollout is designed to capture an already existing but illicit market and the biotech side of it is trying to create FDA approved products with psychedelics. The clinics and retreats are integral to both sides of the industry and in fact represent their own subsector.
Legalization companies are also going to try and develop IP. It just seems logical that many will be vertically integrated similar to MYCO.CA, but at present most are trying for that niche in this burgeoning industry. Just park your money here in a TFSA and in 5 years your jaw is going to drop on the prices of these companies. Easy money. Easy, easy, easy, money. If I was picking a 4th name in the group it probably would be MYCO.CA given the fact they are vertically integrated from drug development IP to a Health Canada License.
Red Light Holland TRIP.CA TRIP.WT $0.485 $123M market cap
Red Light Holland is definitely the people’s stock. There are a lot of rookie investors in this stock. I think most are just following the money and Bruce Linton, but really its probably all you need to do knowing that Bruce is helping pilot the ship. Mind Medicine will never get into retail, legalization or anything like that because thy are an institutional stock so Red Light Holland has become Bruce’s bet on legalization.
It really is a sexy stock. They are focusing on legal psychedelic truffles which is a bit different game plan than the typical health Canada license and starting off with medical. It doesn’t mean TRIP won’t eventually have a Health Canada license as synergies are obvious, but they are skipping the whole process starting with legal psychedelic truffles in Amsterdam.
I own the warrants because the leverage they provided on a spiking stock is absolutely incredible. They have an exercise price of $0.38 so are already in the money and are good until, get this…. July 28, 2024. If the stock is going to blast off through $1 these warrants will be the way to go. 3 and a half years certainly is enough time to get to the moon and back... possibly Mars. At a $1.50 the current SP provides you with a 200% gain will the same $0.20 warrants will provide you with a $1.20, a 500% gain. TRIP is the market leader when it comes to the retail space. Maybe its still an unknown for most at this point. Not me. I am putting my money with TRIP.
I have already made quite a bit of money just trading these warrants they are so volatile. The first day of trading they went all the way to $0.44 before coming back to reality to below $0.20. Demand for this leverage on this company is so high that they keep spiking well above their fair value according to Black Scholes pricing. They move up and down a lot even when the underlying asset TRIP has done nothing but flatline. Its actually something to see…. the retail interest in this company. For my part it is validation that TRIP has all the ingredients necessary to make a run well into the 2 or 3 dollar range eventually. 5 yeasr from now TRIP could be a $5B market cap company. Who knows, but if its anything like the Cannabis stocks TRIP is goingto have a trajectory that blows your mind away. My 40,000 warrants one day could be worth $10 or $20 bucks. This stock could make me a millionaire just in this trade alone. If I hold on to it.
They raised $8.5M with Canaccord at $0.255 and then another $10M at $0.44 with Eight Capital. They have all the ingredients to make this stock go KABOOM!!! In fact, the financings sort of remind me of Bitfarms getting two deals with American institutions. A recipe for a massive breakout at some point with two dealers fighting for shares.
Red Light Holland is just the popular, the market darling and you are probably going to have Canaccord and Eight Capital fight for shares here. If I was going to just bet on two stocks today... it would be TRIP and BITF.
HAVN Life Sciences HAVN.CA $0.92 $62M market cap
HAVN Life Sciences is similar to TRIP in that the company is backed by some pretty big weed money with Vic Neufeld former CEO of Aphria on the board of directors with another major investor of Aphria on the board as well. However their track to legalization HAVN.CA looks much different than Red Light Holland getting a Health Canada license and focusing on production and extraction. You almost have to invest in both strategies. HAVN is following the more traditional route of a Health Canada license which was laid out by the cannabis and is tried tested and true. HAVN is very similar to NUMI and in fact have achieved similar milestones.
I favor HAVN more than NUMI just based on their management and inexpensive valuation when compared to NUMI.V. Some companies I think their valuation creates a good track to acquire, I am just not sure if NUMI is on that same track. I have definitely seen the Aphria guys make deals that were accretive to their SP so I think its very important to bet on management in this sector. You also know at any time they want they will move the stock because they have the muscle to do it. It’s a small cap but it is born out of billion dollar cannabis money.
To be honest this is probably where you are going to see all the Joe’s and met too's crowding into the space as the first wave of companies do well and share prices appreciate. All you need is a Health Canada and KABOOM your SP trades millions of shares and the valuation of the company doubles in a day. There will be many tigers trying to change their stripes to psyches in order to get a piece of the action. These late game players generally don't fare well and should be ignored unless they actually have a niche they are going after. The spoils go to the pioneers, not the late comers to the game.
I can see it already how this is going to play out. LOL. We are, however, a ways away from that type of euphoria.
Field Trip Health FTRP.CA, FTRP.WT $5.04 $214M market cap
Field Trip Health has 5 treatment centers in North America including centers in LA, New York, Chicago, Atlanta, and Toronto. This company has an aggressive plan to expand and should be able to given its $250M valuation.
It is a good plan to give out stock for acquisition and the company is priced perfectly for this type of strategy. They are undeniably the market leader and will make money from the centers through patient dollars as well as studies performed for companies that are developing psychedelic IP. The other competitor in the space is NOVAMIND who has all their treatment centers in UTAH and is priced a lot less than NM. Don’t let the value fool you. It is the business plan to grow by acquisition and its superior valuation which makes Field Trip Health obviously the leader in this subcategory.
I am definitely betting on Field Trip Health. I am buying the warrants and have 4,000 at an average price of $0.75. The warrants have an exercise price of $5.60 and are good until July 5, 2022, certainly enough time for the company to be a $20 or $30 dollar stock. If the company becomes a billion dollar company your $0.75 cent investment could end up being worth $15 to $25. Currently the fair market value on the warrants is $1.50 so even if the stock doesn’t move much there is good chance as more investors find out about the warrants and Field Trip Health itself and its prospects that the warrants will rise just on the basis of being undervalued. The reason they are so undervalued is that they were just listed last month which makes them unknown to most of the market.
I want to focus on legalization and that route and the way its going to happen and the three stocks above fit my criteria for what I want. When it comes to the biotech side of things MMED and CMPS have such a head start on everyone else that I can almost guarantee that where they fail, they will just acquire. Bruce Linton was very good at that growth strategy with Canopy Growth; using an impressive valuation to his advantage and acquiring companies at a fraction of the cost it would have for others. Considering Canopy is the biggest pot stock in the world today. I would say he executed.
Even when you think these companies are overvalued including TRIP…. Linton is going to surprise you with an accretive type of deal. FTRP is the same, instead of looking at the relative value with NM I am going with FTRP because they are worth so much more, have stated they are going to acquire more, and can use that valuation to do accretive deals without the dilution. Novamind just doesn’t have the valuation to do those type of accretive deals without a market push first. I am not saying Novamind isn’t a good bet, I am just trying to pick the industry leaders early on and its clear Field Trip Health is way ahead of Novamind.
In my mind anyway.
Do I want to go to Utah for psychedelic therapy or do I want to go to an international city where Field Trip operates? Maybe if I am on a budget I go to Utah. LOL.
Bitcoin: Ultimately going higher
When Elon Musk decided to turn the BTC market over by mentioning BTC in his profile, BTC shot right off a clear triple bottom and proceeded to march almost $10,000 literally overnight.
It made me think… what BTC stock can I not afford not to own?
BITFARMS BITF.V $3.82 $444M market cap
BITFARMS jumped out at me as the one stock in this sector that I have to have exposure to. I certainly don’t want to be chasing it when it really starts to move.
I immediately rebought close to $3. The move has seemed to pay off as the stock has gone up to a $3.95 high since. The growth trajectory for Bitfarms is unlike any other crypto mining stock.
- They have the cheapest rates which allows them to be the lowest cost miner.
- Have secured the most amount of power which allows them to grow and scale up beyond what any other miner is capable of.
- The got not one but two $20M dollar financings from US investors. Certainly that is a fast track for a NASDAQ listing.
If you were going to ask me who is going to hit $10 first. HUT or BITF…? I would have to say BITFARMS. They have all the ingredients to be an industry leader one day and certainly when comparing valuations to the big boys like HIVE and RIOT they seem extremely undervalued. We are seeking market alpha with undervalued high growth opportunities, certainly Bitfarm meets these criteria and is on track to outperform all the rest. When you have RIOT at $1.1B, HIVE at $980M, MARA at $2.2B, HUT at $600M and BTBT at $891M…. Bitfarms really does jump out.
This stock is going MAINSTREAM.
BANXA Holdings BNXA.V $2.26 $92M market cap
Banxa looks to have sold out all of the old company and now ready to move up. Considering this company is a payments processer they are quite unique in the industry. One company that is coming to IPO soon is COINBASE which is seeking a massive multibillion dollar valuation and will certainly give more guidelines on how to value a company like Banxa Holdings. I think the company is extremely undervalued given the upcoming COINBASE IPO and certainly see this trading at 52 weeks in March when the IPO is supposed to come to market.
Technically the stock has filled the gap it created on the bar chart the second day of trading and seems to be in the upswing. I bought back into it at slightly lower prices, I tried getting $1.95 but didn’t get a fill at that price and ended up buying just above 2. Right after BITFARMS I have BNXA. They recently announced $50M in transaction volume for January which certainly keeps the CAGR of their revenue streams intact.
Its hard to know with a new type of company like this where the valuation should be, but certainly with the steep growth rates in the industry I would expect BNXA to perform well and be much less at risk to price fluctuation than the BTC miners are going to be. If you want exposure with the price risk, BNXA is a great place to park the money. Don’t get me wrong on down days this will most likely sell off as well but the fact the company has revenue that won’t fluctuate with the price of BTC does make it attractive for that reason.
Codebase Ventures CODE.CA $0.29 $15M market cap
I am very high on CODE because they are launching a blockchain network that is going to rival if not outdate Ethereum. The ‘testnet 2.0’ was successful and they expect to launch the ‘mainnet’ and go online this summer. I am pretty excited about CODE having next generation tech that could supplant a crypto like ETH. CODE is also an incubator of sorts and have many more irons in the fire than Arcology.
The fact they are starting to mine crytpo as well will certainly help the company reduce its need for funds in the future as long as institutions keep thinking that they need to hold BTC. CODE is certainly my microcap pick in the space and if they succeed will have probably the most explosive growth out of the group. The party probably starts getting going with this company in a few more months, but there is no predicting where the SP will be at that time.
Understanding BTC stocks
Bitcoin stocks are pretty easy to understand. At the core you have miners and hosters who host the miners. Those that host could obviously mine and most do when the BTC is going up, but the hosters have a much lower risk business plan based on the fact they make money hosting miners. A great way to offset risks when crytpo assets are not in vogue. That’s why you see more hosting companies start to mine like DMGI because currently they are missing out.
Then you have ancillary groups that let you buy and trade crypto assets such as Voyager’s app or Banxa who is a payment processing company, or Netcents who has released the first ever credit card which accumulates points into BTC. Galaxy fits in this category trying to be a merchant crypto bank. All 4 are really good companies, although VYGR has gone up so fast recently I have a hard time justifying its current value against the group.
But you know momentum, it only stops when there is no one left to buy the stock at a higher price. That is when the shorts come in.
The third group are those that are related to technology and have coins released or are technology related like the DASH’s token network or CODE’s Arcology Network which has successfully completed the test network 2.0 or Ripple who launched XRP. Probably the first to successfully execute this business model although the risk are huge as Ripple got hit with a massive lawsuit from the SEC claiming their initial coin offerings ICO were in fact investment offerings.
This group has made a lot of money launching crypto assets while the underlying companies have been hit and miss because of the red tape involved in and the potential lawsuits overhanging this group if not done right.
BITCOIN is relatively EASY to understand. However, it is subject to price risk which makes this part of the portfolio potentially higher risk than other sectors in the Sleep at Night Portfolio. You obviously want to be able to sleep at night and not checking the price of BTC every hour from midnight to 6AM. Hence why you will be able to sleep better being hedged with other high quality growth stocks.
The Best of the Rest
I gave you 6 stocks already for your supercharged sleep at night portfolio. To be honest Bitcoin and Psychedelics have been what I have talked about, but my eyes certainly just aren’t on those two sectors. The Cannabis space is heating up going through a 2.0 legalization process in the US. Many of the leaders have made massive rebounds It’s a bit different than Canada because federally the US can declassify the substance
What are the rest?
Company Ticker Price Shares Out Market Cap 1 Ionix Technology IINX $0.162 123,644,900 $19M 2 Mountain Valley MD Holdings MVMD.CA $1.71 280,212,400 $479M 3 Plant & Co Brand VEGN.CA $0.61 68,368,830 $43M 4 Sundial Growers SNDL $1.15 1,547,418,000 $1.9B 5 Good Natured Products GDNP.V $1.40 175,928,800 $258M 6 Burcon NutraScience BU.TO $4.69 107,101,500 $487M 7 Victory Square Technologies VST.CA $0.67 76,491,820 $57M 8 Solar Alliance Energy SOLR.V $0.49 231,494,000 $115M 9 Drone Delivery FLT.V $1.81 210,066,600 $357M "
GRAB AHOLD OF THE CHINESE EV REVOLUTION
Ionix Technologies I still own this company and am close to a double. This is definitely a play on the emerging Chinese electric vehicles scene. China has 1.4B people and they do not have any presence with the internal combustion engine so don’t have that delay to crossover like GM or other established automakers. Call it what you want China has a BIG 3 of EV manufacturers. NIO is the best followed by the SPAC I mentioned XPEV, and then in third runs LI.
IINX is concentrating on EV battery manufacturing as a growth strategy. Even if they don’t have direct contracts with those three they will benefit immensely. I do believe they have a contract with Telsa in China which should eventually turn profitable. Hopefully faster than Panasonic has manufacturing batteries for Tesla. It slowly climbs the wall and I expect that it is going to continue this climb, a slow climb until it moves past $0.20 where it might start breaking to the upside faster. I like the stock and continue to own shares. As much as I am tempted to sell my profit which I am at 100% return on investment, I keep holding expecting this to go back to $1. It’s a slow trade, not very gratifying, but it is one that is working well.
If you can’t swallow IINX… like I always say, buy the market leaders which would be NIO for sure. Followed by XPEV and then LI in third. LI is the Chinese version of Chrysler. LOL. Actually, I don’t know if their quality is THAT BAD. To be quite honest, I would not be surprised to see Chinese EV's driving on North American streets one day.
Maybe that’s how we get the two Micheals back. Manufacturing Chinese EV's for the North American market in Canada.
THE FAKE MEAT SPACE WILL CONTINUE TO GROW
Burcon NutraScience has done well since I mentioned at around $3 and I would continue with the story. Yes, it is the poor man’s Beyond MeatBYND but there is certainly room for a second player and third players and as their market cap and SP continue to grow an acquisition model certainly could help the grow trajectory of this stock.
BU is emerging as a market leader, secondary of course to Beyond Meat and until the story changes or they have material change in business which affects that growth trajectory it is definitely a strong buy. This is still a multi-bagger from the current levels. Fake meat is real, pardon the oxymoron. Its not going away and this industry will continue to grow as it is seen as both healthy and environmentally friendly and moral as well.
Plant & Co Brands is another you could put into the fake meat category. The recently used the rise in SP to acquire a fake meat butcher shop and deli called YAMCHOPS. Who knew you needed a butcher shop for fake meat, but apparently you do. Makes sense that it is a specialty store and it could be the blue print for many stores. It certainly fits well with a growth profile being the first plant-based butcher shop. I would say this deal is very accretive and widens VEGN’s prospects for growth. The company has range of plant-based food brands including the widely popular Holy Crap breakfast cereals.
Again, if you can’t take these tiny little companies like BU or VEGN, you might want to try the market leader…. BYND.
PLASTICS ARE ON THE ENDANGERED PRODUCTS LIST
No matter how I feel about the fact most plastic is made as a by product of oil and gas product this is synergistic with O and G production while alternatives actually do things like remove crop space from food sources. What I know it certainly changes nothing about what ends up in the landfill. I have always been a proponent of incinerating garbage and plastics as a way to reduce waste, however the hot button way of doing things is just banning it like Justin Trudeau has done with single use plastics.
An outright ban which has left many companies left scrambling for a replacement for many plastic containers and utensils being used today. This certainly left a huge opportunity wide open and GDNP at least starts to fill that void. It has broken out to new highs recently indicating this stock is gaining momentum and ready to move to the next level. What if this is trend that starts happening everywhere in all the blue states? That is something that GDNP can capitalize on.
Good Natured Products is a story I feel is just getting going and will be a billion dollar company one day. If not this year because …. thankyou Canadian government for banning single use plastics. They only way this stock goes from here…. is up.
A TECH INCUBATOR WITH A UNICORN FARM?
VST represents a new pick for Beat the Market Stock Picks. I cannot say enough good things about Victory Square Technologies and their CEO Shafin who is an absolute wizard when it comes to tech company incubation. The guy buys, grows, sells and spins out disruptive technologies to the point of making $0.19 a share in the first 9 months of 2020.
Are you kidding me? A $0.67 profitable company is trading at 4 times earnings? Let alone a tech company?
Its why they should be listed on NSADAQ and not the CSE, but this is a small cap Vancouver company with big dreams and even bigger ideas is killing it everywhere but their SP. It is still very early on in this company’s life cycle and I am betting that their biggest successes are still yet to come. This is a company that will start a multiyear uptrend.
The core idea of their business is to invest in disruptive technologies at an early stage, grow them into profitable ventures and then make a profit selling them or spinning them out and reinvesting into them at market. I can see VST turning into a billion dollar incubator at some point but currently this is a $4 or $5 dollar stock. It is undeniably the most undervalued company in this list based on current metrics.
Victory Square Technologies truly is a unicorn farm and are at the center of everything disruptive including Blockchain technology and even Psychedelics IP that could eventually be spun out into their own companies at some point in the investing cycle creating huge value for current shareholders.
They successfully spun out FANSUNITE, of which their market holdings make up 20 to 25 percent of their market cap. The company is also promising another two spinouts this spring where the strategy is most likely shares in the new company plus re-investment into the company at market. You cannot find a more undervalued technology company that has true growth drivers. It really does meet the profile of an undervalued high growth company.
What should be noted is this company seems to do most of its growth in one or two days of the year. I am not sure of that will continue the pattern or a true trend will emerge with VST, but they do have a normal course issuer bid in place to buy back shares and have started a marketing blitz with Agoracom. Agoracom is a high priced Communications firm. Today’s action certainly in my mind was the start of a new trend up with market makers cleaning out the stops and traders. Any price under a $1 is an EXTREME VALUE BUY and have no problem holding on to this company until the day the market recognizes VST’s true value.
TECHNOLOGY THAT ALLOWS THE COVID VACCINES TO BE STORED AT ROOM TEMPERATURE
Mountainview Medical Holdings MVMD is another company that has shot out of the gate in December and continues to March higher on the promise of being taken out by a major or at least a huge licensing agreement. Everyone has to get on the COVID bandwagon, there are many stocks that seem to be doing well. This is one that certainly is on track to be a COVID darling.
The other part of their technology is a tech that can be combined with pharmaceuticals to be absorbed through mucus walls instead of the stomach and digestive system ultimately making delivery much more effective and faster. This could certainly reduce drug intake as efficiency is increased and time to working also is a hugely disruptive technology.
What is more exciting about MVMD, it is hard to top that, but they do. The company has developed a patented compound that allowed the COVID vaccines to be stored at a temperature much higher than the deep cold freezers they require today. If this truly does make the vaccines to be stored near room temperatures it certainly makes the vaccines much easier to administer in much poorer jurisdictions as well as here in North America. It is also applicable to other vaccines going forward which makes MVMD really a buyout target in my mind. At what price? Who knows but if I am going to say any of these companies gets bought up MVMD certainly is the player in that category.
Gold companies get bought up at a pretty fast rate, the companies in this portfolio really are not the same type of acquisition targets. It is how a mining project is derisked. A major generally won’t touch something small until it has leapt a few development hurdles including at the very least a PEA. This is probably similar to that. They are very close.
MVMD is certainly one to watch. I have shares from the recent break above $1.30 and think this is probably going to $2.50 without much trouble.
I also like little Isreali company Vaxil Bio VXL.V. I think its finally got some sustaining momentum. I traded this stock pretty poorly last winter it shot up to $0.30 and then fell back to $0.10 before jumping up right at the end of the year after tax loss season was over. It could have the same type of trading action and why I haven’t included this company officially in my list because the potential for it to fall back to 20 or 30 cents.
THE CANNABIS SPACE IS REFLATING FASTER THAN YOU THINK
Sundial Growers is a US company late to the market since Canada was way ahead of the pack. Of course there are the usual suspects of TLRY, WEED, HEXO or even OGI, but this is a company that I have never mentioned and it’s a bit unique that is US home grown. The stock IPO’d at $9 and proceeded to drop to a $0.14 cent low this year. Unlike Canadian companies who had a huge ahead start and were well capitalized, SNDL was one who got shorted into oblivion. They are back and my US pick to do well. I think it is a personal favorite of many American investors because it is US home grown and think it is a late bloomer worth every penny. I often see SNDL on the Bloomberg page so it certainly has a lot of exposure and seems like their favorite.
I’ve mentioned SNDL on my Facebook page at $0.70 and it dropped to $0.53 before starting its run. They recently did a $400M round with investors so their balance sheet is shored up and ready to take part in the legalization trade in the US. A trade that is state to state rather than country wide like Canada. However, once the US declassifies Cannabis this should speed up. I do expect the Biden administration to do this as they are now a bit behind even their own states who have opened up this trade. Now that this company is trading a $1 the only hurdle left is the $1.30 mark before it starts marching its way back up to respectability. It also doesn’t hurt to seed a whole bunch of new investors who will most likely buy more on the way up.
GREEN ENERGY IS BACK IN THE US POLITICAL LIST
With the Biden administration coming into power it certainly has added some new prospects to add to this list. One such company that has signed a pretty big deal in the US is Solar Alliance Energy are building a massive 56MW power project in the state of Illinois. The deal is worth $60M and is certainly guaranteed to keep the revenues growing. Solar has skyrocketed to the $0.50 cent and has currently bumped up on $0.60 resistance. They announced a recent $5M financing which should help provide a base at the current levels and a new wave of investors.
Certainly, the story is just starting; and I would expect this SOLR is still a multi-bagger from here. It might be smart to trade the breakout after $0.60 holds because really that is the signal that this stock is ready to move to the next level. $0.60 rule always applies to stocks trading sub $0.60. They almost always stop and accumulate at this mark. Another easy rule to live by to help increase your trading profits. Who wants dead money? Not me.
DRONE DELIVERY COMPANIES HAVE A MASSIVE FUTURE
Drone Delivery Canada Corp. FLT I probably should start out saying I do not own this one. I don’t know what to say about a stock I have had on my watchlist since $0.60, make daily jokes about starting a local drone delivery company because I live on a rural property in the mountains, but failed to buy. Drone Delivery is a company that is focused on the design, development, and implementation of its proprietary logistics software platform. I have had a couple limit bids trying to lowball a rising stock and have never been filled to my disappointment. At $1.81 I really don’t know how much upside is left, but the company certainly does have exposure being covered at the Motely Fool and these runs can overextend quite a bit.
My latest buy was trying to get the first downswing after it burst through $1.30 and I missed out at $1.10 which it never got to. Sometimes buying at market can be useful, however trading with limit bids can help guarantee success when sometimes all you are looking for is 10 or 15 percent.
These stocks listed above are certainly worth more than 10 or 15 cents and are at different stages in their lifecycle. It is why I am overweight psychedelics and BTC, because these sectors are still relatively inexpensive given the opportunity in the space. More importantly they are new investing themes which usually means they can take several years to play out and after its all said and done you have companies worth billions. Hopefully all these companies make.
Happy trading, happy investing, whatever it is you do… do it like a lion.
Don’t forget to microdose, everyone is doing it, apparently it works.
