Post by
michelleb33 on May 02, 2018 3:14pm
Buy weed stocks
Wednesday, 2 May 2018 Buying Undervalued Weed And Pharma Stocks With April being behind us, we believe that the selling pressure on weed stocks has subsided and it is now good to go long.Canopy Growth Corporation (TWMJF) (WEED.TO) is back over $30 in Canada and while we said that we would revisit a long position aftercovering our short in the mid-$20's in April, we think that there is cheaper weed and pharma plays out there at this moment. We think that VANC Pharmaceuticals Inc. (NUVPF)(VANC.CN) presents a tremendous buying opportunity thanks to adistribution dealsigned with Emerald Health Therapeutics, Inc. (EMHTF) (EMH.CN). Our previous picks Celldex Therapeutics, Inc. (CLDX) andProthena Corporation plc (PRTA) have done well since calling them and are on the verge of breaking out in VTVT-like fashion. We are up to 595 followers despite not giving out a lot of alerts, a fact that we think is indicative of a diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter handle@StockTradePicks. More on VANC later, but first we would like to talk about our two biotech calls in "The Next VTVT-Like Runners And Buyout Candidates". There have been a lot of failed biotech stocks recently, dropping 50% or more in a day on bad news. On April 10, vTv Therapeutics Inc. (VTVT) dropped nearly 80% afterannouncingPhase 3 study results that didn't meet endpoints. Not only that, but VTVT hasnegative equity on the balance sheet, so it looked very bleak for the company. That's when it shot up from $0.83 on April 16 to as high as $2.67 on April 18. We believe that the market is ripe for recovery on beat up biotech stocks and that CLDX and PRTA make great long candidates. CLDX is up over 2% today to $0.79 and has held steady from our buy-in point on the verge of a breakout while PRTA is up over 9% today to over $13 and in the middle of a breakout. CLDX has cash per share of $0.99 and book value per share of $1.71 so it has the fundamentals to support a move to at least $1.00. This data is fromYahoo Financebased on year-end 2017 results so there is likely some cash burn in Q1, lowering these numbers a bit, but still well above the current stock price: PRTA'sbalance sheet data from Yahoo Financeshows total cash per share and book value per share at $10.84 and $10.58 respectively, a bit higher than the stock price, but this data as of December 2017 doesn't tell us the full story and what really makes PRTA a strong buyout candidate. Celgene (CELG)invested heavily into PRTAon March 20 with a $100 million upfront payment and $50 million share subscription at $42.57 per PRTA share. Assuming some cash burn, that would add another $2-3 cash per share compared to the December numbers seen above. Reading theSEC filingon the exact nature of the deal, PRTA has a chance to earn up to $700 million each on three different neurodegenerative disease targets for up to a $2.1 billion payout from Celgene. That would give Celgene a lot of incentive to consider buying out PRTA at this low price. After all, CELG did just pay $42.57 for shares a little over a month ago. With PRTA trading at around its cash value, why not make a larger offer now while it's this cheap? So watch for the buyout rumors to start swirling as PRTA gets onto more people's radars, because it makes a lot of sense right now. Although there is no guarantee that it will happen, sometimes it's just as good to get into a trade early before market sentiment pushes it up. VANC is different from these companies as it is a nanocap trading in Canada. It has only 31 million shares outstanding and a $7.5 million market cap so it can really move but unlike these other two companies doesn't have a lot of cash so it's not the balance sheet that makes it such a compelling play. It is the distribution deal with EMH: "New joint venture, Emerald Health Naturals, secures exclusive Canadian rights to sell proprietary non-cannabis health products that support the human endocannabinoid system Initiative leverages natural health product development, marketing and sales expertise of Emerald Health Bioceuticals, VANC Pharmaceuticals and GAB Innovations to establish brand and sales in strategic distribution channels VICTORIA, British Columbia, April 17, 2018 (GLOBE NEWSWIRE) -- Emerald Health Therapeutics Inc. (EHT) (TSX-V:EMH) (OTCQX:EMHTF) (Frankfurt:TBD)launched today a multi-pronged program to market and sell a proprietary, award-winning non-cannabis line of endocannabinoid-supporting nutritional products in Canadian grocery, natural health product, and pharmacy stores. EHT has entered into a 51:49 joint venture, to be called Emerald Health Naturals (EHN), with San Diego-based Emerald Health Bioceuticals, Inc. (EHB). EHN has secured exclusive Canadian marketing and sales rights to EHBs unique nutritional supplements, which use non-cannabis, non-psychoactive plant-based ingredients to provide potentially beneficial support to the bodys endocannabinoid system. In this initiative, EHN has agreed to acquire the assets of GAB Innovations (GAB) and has granted non-exclusive sub-distribution rights to VANC Pharmaceuticals (VANC). Both GAB and VANC have established networks and a history of sales success in the natural health product and pharmacy channels. Gaetano Morello, ND, the founder of GAB, has been appointed CEO of EHN. ... Granted VANC Pharmaceuticals Inc. (TSX-V:VANC) (OTCQB:NUVPF) a non-exclusive right to distribute EHNs endocannabinoid-supporting products to Canadian pharmacies. VANC has a well-established sales team and key relationships with Canadas largest pharmaceutical wholesalers as well as pharmacy and grocery chains. VANC will concurrently issue to EHN 3,030,303 warrants to purchase shares of VANC." EMH is a licensed producer valued in excess of $500 million market cap. One thing to note about this collaboration is that EMH featured VANC prominently in its news release about the distribution deal. When news like this comes out, usually it's the smaller company that makes a bigger deal of it. EMH must think very highly of this deal with VANC. When we compare the $7.5 CAD million market cap of VANC to the $550 CAD million market cap of EMH, it's very easy to assume that the whale may want to swallow up the mouse or at least put a significant strategic investment into it. Upon announcement of this deal VANC immediately spiked to $0.40 but in the two weeks since has drifted back down to the mid-$0.20's. We think this is an ideal area to buy as Canada marches towards legalization in a couple of months and the cannabis industry, including EMH, pick