For many investors it will be hard to believe, but it is already mid-August. Those still in need of some R&R will be looking ahead to the Labour Day holiday. But for readers who are once again giving more consideration to their investment portfolios, now is the time to get ready for Investing Season.
Corporations are composed of people too. Internal vacations combined with reduced attentiveness from investors means that many companies also have some “quiet time” over the summer. Come Labour Day, however, and it’s full-steam ahead on operations, acquisitions, and whatever other priorities are at the top of the to-do list.
However, the corporate world doesn’t grind to a halt from June through August, and for those investors who are tuned in at the moment, there are a number of interesting stories to follow as they look to position themselves for the Fall. One of the current good-news stories is in gold mining.
Mining investors will undoubtedly have noticed the recent weakness in the price of gold. One gold mining junior that isn’t being deterred by current conditions is Aben Resources Ltd. (TSX: V.ABN, OTCQB: ABNAF, Forum).
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The impressive jump in share price at the beginning of August is a direct function of ABN’s first drilling results at its Forrest Kerr Project, in British Columbia’s “Golden Triangle”. This is a reminder of one of the basic rules of resource sector investing: even in bear-market conditions, significant discoveries can (and usually will) generate strong returns for shareholders.
It can take investors many years to double their money by investing in a large-cap company, with annual inflation steadily clawing back much of those gains. Investors in Aben Resources could have doubled their money overnight.
Obviously, only a minority of mining companies are producing such stellar gains (at the moment), but this is true in most sectors. The point is that even in bear-market conditions, for gold and mining in general there are strong returns to be found with the right companies.
Another company that enjoyed a strong performance in the week of August 8 – 14th is Tetra Bio-Pharma Inc (TSX: V.TBP, OTCQB: TBPMF, Forum). TBP jumped on news of Health Canada approval for a clinical trial on a cannabinoid alternative to the opiate Fentanyl. After giving back much of those gains, the stock has resumed its uptrend on more positive news. As a cannabis bio-pharma company, Tetra straddles both the Cannabis and Healthcare groups.
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In both the cannabis sector and the cannabis Bullboards at Stockhouse, the big news of the week was clearly Constellation Brands Inc’s (NYSE: STZ) “transformative” $5 billion strategic investment in Canopy Growth Corporation (TSX: WEED, OTCQB: NYSE, Forum). This was the subject of a Stockhouse feature article earlier this week.
This is huge news for the cannabis sector any way you slice it. The first investment by Constellation Brands in Canopy Growth was CAD$245 million. That’s not chump-change, and the deal was widely seen as the impetus for the massive jump across the sector at the end of 2017. This new deal is more than twenty times as large, yet (at the moment) it has had much less market impact on the sector as a whole.
This news not only propelled WEED’s share price from roughly $32/share to over $43, it moved the company back up to second position in Stockhouse’s cannabis Bullboard leaders. The acquisition represents a price-per-share of $48.60 – a strong premium over Canopy Growth’s recent share price.
This leads to the #1 company on our Bullboards of top cannabis stocks: Aurora Cannabis Inc. (TSX: ACB, OTCQB: ACBFF, Forum). Aurora has a strong hub at Stockhouse and has been at or near the top of the cannabis rankings for many months. However, it was particularly dominant last week.
Top Viewed Cannabis Stocks
Why? As noted, the latest Constellation Brands – Canopy Growth deal hasn’t had much impact on the sector as a whole, yet. However, a few of the large-cap companies did see a jump in share price, and one of them was Aurora. ACB is second behind WEED in size among Canada’s publicly listed cannabis companies. So if Big Alcohol goes shopping for another major partner in Canada, who is likely near or at the top of that list?
This was clearly the #1 subject for discussion on most cannabis Bullboards this week, and Stockhouse investors were discussing this the most on the ACB Bullboard. What do you think? Will this be the launch point for the next leg up in the Canadian cannabis sector? This will be the subject of our next Investor Pulse Poll on the Stockhouse homepage.
[This week’s Poll: On August 7, 2018, Tesla's CEO, Elon Musk, reportedly tweeted, "Am considering taking Tesla private at $420. Funding secured." The SEC has announced an investigation – what do you think?]
Top Viewed Healthcare Stocks
Elsewhere, there wasn’t much to report on the top stocks in Stockhouse’s various Bullboard groups. The lone exception here is in the top healthcare stocks, with ProMetic Life Sciences Inc (TSX: PLI, OTCQB: PFSCF, Forum). Unfortunately the “buzz” isn’t for the right reasons. PLI is a long-time favorite among Stockhouse investors, doing exciting healthcare research that has reached the Phase 2 and Phase 3 clinical trials stage.
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However, as a long-term chart of this stock shows, ProMetic has been in steady decline for much of the past three years. Even the recent favorable news of “Rare Pediatric Disease Designation” from the U.S. FDA didn’t give the stock a significant lift. The company is currently working on a new “corporate action plan” to address this trend.
These are the “dog days” of summer, both in terms of the season and current investor sentiment on most Stockhouse Bullboards. But with important individual news still driving companies like Aben Resources and major sector news like the Constellation/Canopy mega-deal, there are still market-moving events occurring now.
Meanwhile, Labour Day (and a new Investor Season) is almost here. Even before the latest cannabis news, this Fall was shaping up to be an exciting time for small-cap investors as Canada legalizes the adult use of “recreational” cannabis at the national level. For investors looking to talk cannabis stocks, there is no better destination than Stockhouse.