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Where the Smart Money is Looking This Summer

SMG, XXII, CRBP, GBGPF, T.WEED

OilPrice.com News Commentary

PR Newswire

LONDON, July 18, 2017 /PRNewswire/ --

This summer, the stock markets are all about tech and pharmaceuticals, while the banking sector has just won a nice reprieve from stress resulting in some attractive shareholder payouts.

The Internet of Things and two all-out wars on this playing field make for a more explosive market than ever-before. One war is between mobile telephone and data providers, vying for capabilities and customers. Another war is between cyber thieves, hackers and extortionists and those racing to the market with weaponry to keep the data safe. Active companies to watch include: Canopy Growth Corp (TSX: WEED.TO) (OTC: TWMJF), Scotts Miracle-Gro Co (NYSE: SMG), 22nd Century Group, Inc. (NYSE: XXII), Corbus Pharmaceuticals (NASDAQ: CRBP), CanniMed Therapeutics Inc (TSX: CMED.TO) (OTC: CMMDF)

We're also looking at a windfall for banking sector shareholders. Why? It is because the 34 biggest banks in the U.S. just cleared the Fed's stress tests last week, and their response: dividends hikes and repurchase programs. This is a nice place to be in right now.

But nothing will be as explosive as the Canadian marijuana scene. The Canadian government's intention to legalize the recreational use of marijuana by this time next year has already been a bonanza for pot growers. The cream of the crop was hitting new highs on medical marijuana gains, but they've been positioning themselves in advance to take advantage of the real break-out here-legalization for recreational use. Stocks soared more than 1000% when this legislation hit the table, and by July 1 st, 2018, it's going to be too late to get in on this game for a good price. This is the summer when new pot billionaires will be minted.

Here are our 5 top picks for the best gains in these sectors:

#1 Apple

There probably hasn't been a better time to get in on this tech-darling in a while. Apple may have seen its shares fall from highs this year, but the big picture here is a stunning one. Keep in mind that the iPhone 8 will likely be released in the fourth quarter. We might see investors start withdrawing a bit in the run-up under pressure to sell, but this is just near-term stuff that ignores the stellar fundamentals.

More savvy analysts see another 10% rally for Apple. Earnings are on the increase and we're looking at major expansion here. When the iPhone 8 comes out, expect much more. Even speculation on the details of this phone sent Apple to major all-time highs in May. Don't be fooled by the fall back. This stock is still up 24% year-to-date, and come Q4, it is likely to be riding even higher.

This isn't a huge divided-yielder right now, but there's a very nice rise in payout-and again, the 10th anniversary iPhone is coming, so timing is important here.

#2 Invictus MD (IMH.VIVITF)

We turn to marijuana now-and specifically to Canada because this is the biggest multi-decade opportunity for investors right now. The Canadian government's legislation to legalize recreational marijuana by this time next year creates a multi-billion-dollar market overnight, and the first to get approval to grow and sell new recreational strains will be the major winners. More interestingly, a supply shortage is already looming, with the industry scrambling to add growing capacity in time for July 1 st , 2018-when recreational use is finally legalized.

How big is this market? It's huge. Deloitte estimates this industry could be worth a whopping $22.6 billion annually . That's more than the combined sales of beer, wine and spirits.

So, we're looking at small-cap Invictus because it has 2 of 50 licenses in Canada to cultivate cannabis. And there's another important first here: Invictus is the first licensed medical marijuana company to pay a dividend to shareholders. In December, they paid their shareholders $1 million in dividends. That's something no cannabis company has done yet.

Its strains cover every corner of this market, reaching into everything from pain management, cancer, epilepsy, anxiety and - most lucratively of all-recreation.

We're watching Invictus closely because it's been smartly targeting small- and mid-size companies with significant growth potential, and its strategy is all about profitability. It's also not afraid to get down and dirty. Its owners were quietly scooping up 'pick and shovel' assets to lower the costs of its marijuana production, and just waiting for a big reason to draw everyone's attention: Legalization of recreational use will do it.

#3 JPMorgan Chase & Co.

The banking sector looks great again, thanks to some major stress relief. Shareholders are loving it right now. Nowhere are they loving it more than at JPM.

America's largest banks have now definitively proved their financial robustness. Last week, they cleared the first round of stress tests, and the Fed gave them all a clean bill of health for their capital plans. This is the first time this has happened since 2008. This is a great time to add some banking stocks to your portfolio but JPM has made shareholders exceedingly happy.

JPM increased its quarterly dividend to 56 cents a share, and announced a buyback program of $19.4 billion. Others have done the same, but JPM's was far more attractive (Bank of America increased its dividend to 12 cents a share, for instance).

#4 Cisco Systems

If you like Apple, you should like Cisco. Not only is it the Internet of Things, but it's a key warrior in the fight against cybercrime. Perhaps nothing is more vital right now. This is a time when corporations are in a sheer panic over stolen, kidnapped and leaked data that can as we have seen-stop global shipping in its tracks, among other things.

Earlier this week, Apple and Cisco Systems announced plan to help businesses that primarily use gear from both companies to get a discount on cyber-security insurance premiums. Cisco has in the past created security apps for iPhones to protect against phishing attacks, among other things.

The share of Cisco Systems currently has a value of $31.3 while the company's 52-week low is at $28. This $156-plus-billion market-cap company has stable shares, and with cybersecurity the most urgent issue of our time, it's got nowhere to go but up.

#5 Verizon

It hasn't been easy for Verizon. The competition in this field is vicious and it's an all-out battle for customers, every day. The stock has dropped more than 16% year-to-date, but the long-term picture looks good and this may be the perfect buying opportunity.

Verizon has been one of the worst performers on the Dow this year. But it's still attractive when you compare it to its peers, especially in terms of return on assets, equity and capital, but also in terms of revenue, earnings and dividend growth. Active Companies to watch include: Canopy Growth Corporation (TSX: WEED.TO) (OTC: TWMJF), The Scotts Miracle-Gro Company (NYSE: SMG), 22nd Century Group, Inc. (NYSE: XXII), Corbus Pharmaceuticals Holdings, Inc. (NASDAQ: CRBP), CanniMed Therapeutics Inc. (TSX: CMED.TO) (OTC: CMMDF)

That's near-term, and stocks are at a discount right now. But for long-term, keep in mind that the Verizon network is still the gold standard.

Honor able Mentions In The Most Explosive Industry This Summer :

- Canopy Growth Corp (TSX: WEED.TO) (OTC: TWMJF): Canopy Growth Corp is the largest licensed cannabis producer in Canada, and one of the biggest names in the space. While its revenue stream has seen constant growth, a failure to produce profits has caused its stock price fall in 2017. Long-term investors should look at this drop as a necessary growing pain - with Canopy Growth Corp likely to be at the front of field when the Canada's cannabis legislation comes into play.

- Scotts Miracle-Gro Co (NYSE: SMG) is taking full advantage of the marijuana boom. This North American company's products include Miracle-Gro, Roundup, Liquafeed and other solutions for growers interested in keeping their plants healthy and bug-free. Because it is a household name, the company stands to benefit from the coming 'green rush.'

- 22nd Century Group, Inc. (NYSE: XXII) is a plant biotechnology company that creates tech with the ability to increase or decrease the level of nicotine and nicotinic alkaloids in tobacco plants and levels of cannabinoids in cannabis plants through genetic engineering and plant breeding. We see great upside for this company as new legalization in Canada and more liberal marijuana policies in the U.S. boost investment in the sector.

- Corbus Pharmaceuticals (NASDAQ: CRBP): A small-cap drug developer with a $400 million market cap. The company's primary product is a synthetic oral endocannabinoid-mimetic - A drug that binds to the same receptors as cannabis. The drug mimics cannabinoid-based medications and has shown tremendous promise in reducing pain and inflammation. The drug currently being evaluated in four clinical programs: systemic sclerosis, cystic fibrosis, dermatomyositis and systemic lupus erythematosus.

- CanniMed Therapeutics Inc (TSX: CMED.TO) (OTC: CMMDF): This Canada-based plant biopharmaceutical company was the first licensed marijuana producer to sign a deal with a national pharmacy chain. With its stock trading at nearly a 52-week low, there is certainly value to be found in this company when the new Marijuana legislation kicks in.

By. Charles Kennedy

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SOURCE OilPrice.com



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