Last week was a busy one for Canadian markets, to say the least. Alongside a
spike for cannabis markets we saw the federal election cycle wrap with a Liberal Minority, and have started looking at what it means for investors.
The Stockhouse Bullboards, in turn, were full of heated discussions and reactions. Our most popular sectors saw investors debate short-term swings, long-term swings, and whether some small cap offerings were gold mines or booby traps.
In this week’s review of the action, we dive into the most-viewed companies and see three very different communities: one uncertain, one thoughtful, and one extremely divided.
Last week was a big one for the cannabis sector. Tuesday marked a big recovery for
Aphria Inc. (
TSX:APHA,
Forum) and its competitors, and Thursday was the official legalization of the
next wave of cannabis products in Canada. Naturally, both the company and the sector drew a lot of focus, but where have things settled?
It seems that at least temporarily, the APHA share leap on Tuesday was a bit overambitious for the market. After hitting $7.17 on Oct. 15, shares dropped back and looked to settle around $6.31 on Oct. 22, but have since started to inch upwards. Investors are warily seeing if the sector continues to improve, meaning the
anticipated cannabis sector resurgence will be a slow build for now.
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The APHA Bullboard was at first exuberant at shares lifting, then angry at the correction, before finally settling in to discuss the bigger picture. Alongside the sector positivity are worries of market oversupply, and many users are suspicious of funny business from banks and short sellers aside. So does Aphria have what it takes for the long haul? Stockhouse Member
INVSTIGAT0R is one of many that believes the company will come out ahead of the rest.
“…Pretty sure it's the exact opposite of what was just said here. If the Canadian market is over supplied and international markets fail to open quickly it would absolutely be disastrous for Aurora and Canopy. Their overhead costs are way too high and they both have larger supply. The real "crux" is that both Canopy and Aurora don't stand a chance going toe-to-toe in a price war with Aphria...”
(Po?st: RE:APHA-Time for the move Upwards!)
Over at the metals and mining Bullboards, a familiar face in
Royal Nickel Corp. (
TSX:RNX,
Forum) topped the most-viewed chart. The last time we covered the Canadian mining company was back at the
start of summer after RNX shares jumped more than 25%, and after looking at the ticker chart below, it seems like the positivity was short-lived.
Last week was kind to RNX as shares climbed from $0.33 on Oct. 16 to $0.385 on Oct 18, but the overall downtrend can’t be ignored (and might be continuing). This despite Royal Nickel announcing
positive production and cost guidance on Oct. 15 and following up with
additional gold recovery on Oct. 17.
You might expect the RNX Bullboard to feel gloomy, when in fact the opposite is true. The Royal Nickel community is impressively positive, with well thought-out posts focused on research and insight. They see a of potential that the market is pissing, including Stockhouse Member
petersburggray pointing out that one of RNX’s holdings has Nickel waiting to be mined.
“I don’t think market has discounted the fact that within 6 months BH will be producing 3% to5% Ni ore very profitably, which will drastically cut AISC on gold production since nickel will be credited as by-product against Au AISC. Unlike Black Swan for example which needs 6 to 9 months to restart, Beta Hunt can produce nickel at drop of hat because Ni and Au mineralization are right next to each other. Infrastructure for mining gold can also be used for mining nickel. Only thing holding up full scale nickel production at BH now is access to nearby BHP nickel concentrator. BHP is opening 3 new nickel mines near BH and just signed a tolling agreement with Mincor to process up to 600ktpa of their nickel ore…”
(Po?st: BH Ni byproduct to reduce Au AISC)
Finally, we visit the second-most popular sector on Stockhouse, the energy Bullboards. The Top-6 chart is filled with well-known resource companies and Stockhouse favorites but this week we wanted to highlight
Sonoro Energy Ltd. (
TSX-V:SNV,
Forum). Over the last year, shares for the oil and gas company have been pretty steady, but the last few weeks were a dramatic turn.
First, SNV shares almost doubled from $0.085 on Oct. 9 to a high of $0.16 on Oct. 11 before the next trading day saw the stock fall back down and erase those short-lived gains. The reactions were largely to the company’s proceedings in Indonesia with the government on a production sharing contract, first on the announcement of the
pending contract completion on Oct. 11, followed by the
formal execution of the contract on Oct. 14.
Why did the share bounce up and down? If you head over to the SNV Bullboard you realize how complicated the situation is. Sonoro’s contract looks good, but the company’s operations are another story, and a clear line was drawn on the discussion forum: you’re either bullish on the contract prospects or, like Stockhouse Member
AyuFan, bearish that SNV can live up to the hype.
“…SNV will not pay expenses incurred in the partnership for 1 year, that is correct, however, the partnership will not pay for the expense to run the Sonoro Energy, the company, that is having a 350k operating expense with no revenue. Again, read the SEDAR report…
…We don't know the following:
- new reserve figures
- time to restart existing well and estimated production figures
- exploration time and time it takes to start a new well
- if partnership stated it takes 2 years to start a new well, will the existing well produce sufficient funds for SNV to operate in the 2nd year? (partnership only provide funding for the first year).
The first year of the partnership might cost a lot less since it's mainly surveys and assessment of the area. Mobilizing all the equipment is the real deal…”
(Po?st: RE:Reminder)
Last week, we turned to the Stockhouse Community to see where our investors thought the next bright spot in Cannabis would shine. On our homepage poll, we asked which LP would follow Aphria in posting a profitable quarter, and the results so far cast a wide net.
Our Investor Pulse Poll is still open, however, so you can still add your voice! Which company do you feel will be the next profitable Canadian LP? Now that the dust has settled a bit from the results and newly legalized recreational products, we want you to
head to the homepage (or click the image below) and cast your vote.
(Click image to go to the poll)
Now that the uncertainty of the Canadian federal election is out of the way, the next week of trading activity should be pretty tame, right? Needless to say, the next big issue or news is always right around the corner, and the Stockhouse Bullboards are one of the best places to make sense of it all. For previous editions of Buzz on the Bullboards:
click here.