Buzz on the Bullboards: Tracking the Big Movers

Markets are changing. While most of the myopic scribes in the mainstream media (apparently) can’t see this change, investors know that we are dealing with new parameters.

• Dramatic increase in volatility
• Deteriorating investor sentiment across the board
• The end of one-way (U.S.) markets

Stockhouse isn’t wasting time when it comes to both acknowledging the changing markets and trying to do something about this – for the benefit of our investor audience. What do these changing conditions mean to investors? It will generally be harder to generate investment gains than it has been for roughly a decade.

At Stockhouse, we plan to do more to find investment opportunities across various sectors. In our (upcoming) “Sector Spotlight” series, we’ll break down the different sectors one by one. We’ll look ahead to the prospects for these sectors in 2019, and even point to a few companies where investors might find especially strong value propositions.

We will be supporting this on Buzz on the Bullboards (and elsewhere on site). In today’s edition of Buzz, we’re simply drawing attention to the biggest gainers and losers among the industry groups we track. Obviously, the losers are easier to find at the moment, and a couple of the industry groups simply don’t have any weekly winners – this week.

For investors whose comfort level increases with stocks that are in a rising mode, they might want to invest their time checking out the gainers. For other more “value” oriented investors who look for beaten-up companies so that they can “buy low”, maybe they will be more interested in the stocks that have given back the most ground over the November 28 – December 4 period we’re currently tracking.

Cannabis

If investors have been looking for the “highs” and “lows” in 2018, many of the candidates (on both sides of that ledger) can be found in the cannabis space. While the sector is strongly titling downward at present, there have also been significant profit-taking opportunities earlier in the year.

This week, here are the big movers in cannabis:

FSD PharmaC.HUGE Open Nov. 28 (0.22¢) | Close Dec. 4 (0.25¢) + 14%
Aphria Inc.T.APHA Open Nov. 28 ($10.50) | Close Dec. 4 ($5.99) – 43%

While FSD Pharma is trending higher this week, both of these cannabis companies have been hammered especially hard by the pullback in cannabis stocks. Only a few months earlier, HUGE and APHA were looking like (along with a few other stocks) the biggest cannabis winners in 2018.

Have these companies totally changed their spots in the last few weeks? That’s something for Stockhouse readers to determine in their own due diligence. However, for investors who see these as still being the same companies that they were in the summer, HUGE and APHA could be a couple of value-backed additions to their cannabis portfolio.


Industrials

There were no winners to report among these stocks over the past week. That’s a far cry from earlier in the year when Bombardier Inc. (TSX: BBD.A) was soaring higher. This week, the big mover was Aimia Inc. (TSX: AIM, OTCQB: GAPFF, Forum).

Aimia Inc.T.AIM Open Nov. 28 ($3.72) | Close Dec. 4 ($3.33) – 10.5%

This is another company in the Industrials sector that was pointed higher only a few months earlier. The big news this year for AIM was the sale of its Aeroplan Loyalty Business to Air Canada – for $450 million.


(click to enlarge)

The stock jumped when the deal was first announced. While AIM has given back significant ground from its 52-week high of $4.60, that may make this cash-rich company attractive to bargain-hungry investors.


Energy

Energy stocks have been depressed through most of 2018. For this reason, there are no shortage of bargains in this sector. For perhaps this reason, energy stocks are relatively less volatile than other sectors, possibly suggesting that these share prices have been compressed to the “capitulation” point.

Unless investors see the global economy transitioning quickly to green/renewable power sources, there will be rally opportunities for investors here as well. Here are the top movers among energy stocks over the past week.

Valeura Energy Inc.T.VLE Open Nov. 28 ($3.35) | Close Dec. 4 ($3.65) + 9%
Trican Well Services Ltd.T.TCW Open Nov. 28 ($1.28) | Close Dec. 4 ($1.21) – 5.5%


Healthcare

Healthcare is another depressed sector for small-cap stocks – and another major value disconnect. Because of aging populations and greater expectations for health/well-being in our populations, healthcare has been (and will continue to be) a long-term growth sector. Yet many (most?) of the small-cap stocks falling under this category are laggards.

This spells big opportunity for investors as the market catches up to the growth potential of these small-cap healthcare companies. Below are the leading movers in this space.

Theratechnologies Inc. T.TH Open Nov. 28 ($7.49) | Close Dec. 4 ($8.31) + 11%
PreveCeutical Medical Inc. C.PREV Open Nov. 28 (0.075¢) | Close Dec. 4 (0.060¢) – 20%


Technology

Another down sector. Another major value disconnect. The pace of technological change continues to accelerate in the 21st century. This means a greater-than-ever need for new innovations – and the vast majority of all technological innovation originates at the small-cap level.

While these junior technology companies are also speculative, the upside potential for these companies (given their extremely compressed valuations) means that investors with a reasonably aggressive investor profile and a long-term investment horizon should have a tech component in their portfolio today.

No winners to report here over the past week. Here is the biggest loser among tech stocks last week.

Martello Technologies Group Inc. V.MTLO Open Nov. 28 (0.38¢) | Close Dec. 4 (0.29¢) – 24%


Metals & Mining

Unlike most of these other sectors, mining is a notoriously cyclical industry, due to the long time-horizon required to bring new supply online in most metals/minerals markets. Most of these mining sectors have been depressed not merely for months, but for several years. Yet metals are the building blocks of our economies.

Unless investors see the global economy simply grinding to a halt, many of these metals/minerals markets are set up for bull markets of epic proportions. In particular, sectors like uranium, silver, and gold have been especially beaten up – despite stellar supply/demand parameters.

However, even in this extremely tough market, we still see resource companies able to power higher – on the back of new discoveries. This means that ahead of any broader rally for these metals markets, investors can still find occasional winners. Here are the big movers in metals & mining.

Largo Resources Ltd. T.LGO Open Nov. 28 ($2.80) | Close Dec. 4 ($3.45) + 23%
Ucore Rare Metals Inc. V.UCU Open Nov. 28 (0.155¢) | Close Dec. 4 (0.130¢) – 16%


Blockchain

Proponents of blockchain technology still see this as the impetus for a major technological revolution. It’s too soon to say (either way) whether this will materialize as forecast. However, what is unequivocally true is that the “popping” of various cryptocurrency bubbles has had an enormously negative impact across the entire blockchain space.

Some of these companies have little or no connection to cryptocurrencies as part of their business model. Some blockchain companies with exposure to cryptocurrencies have managed to mitigate the damage from this reversal. For investors who believe in this technology and are willing to invest the necessary time in due diligence, blockchain is another sector with a potential upside beyond the imagination of most investors.

At the moment, this is another sector with no weekly winners.

HashChain Technology Inc. V.KASH Open Nov. 28 (0.030¢) | Close Dec. 4 (0.025¢) – 17%


Blood in the water.
It’s always darkest before the dawn.

Choose your metaphor/cliché. The fundamental premise of investing is buy low, sell high. Small-cap valuations – across the board – are providing unprecedented value opportunities for small-cap investors. But current market conditions are not for the faint-of-heart. Given current volatility and the potential for additional declines, investors need to adopt a long term strategy for these companies, buy and hold – another fundamental of true investing.

The alternative? If investors choose to simply pull out of stocks, where will they go to shelter their wealth from the inflation that our governments and central banks pretend does not exist? Zero-yield bonds? Zero-yield savings instruments? Buy real estate in one of the many bubble-markets?

Like it or not, for most investors stock markets remain the lesser-of-evils in generating returns on their savings. Small-cap stocks have been lagging large-cap stocks for many years – something that is also completely unprecedented in our markets.

Stockhouse will be here. We will continue to provide our audience with information and investment ideas to aid in your wealth-building. And the Stockhouse Bullboards are here, allowing investors to network and compare notes with other investors.



FULL DISCLOSURE: FSD Pharma Inc and Preveceutical Medical Inc are paid clients of Stockhouse Publishing.