While the markets were rocked at the end of January by the Wuhan coronavirus, the beginning of February has seen a return to the non-stop climb that began in last fall.
Once we break things down by sector, however, the picture becomes murkier. The cannabis sector continues to be in a daze, oil prices have been free falling à la Tom Petty, and geopolitical tensions are only going to ramp up further into the year.
And yet, some small-cap companies are navigating the rough waters without a problem. Keen investors on the Stockhouse Bullboards have been finding these “diamonds in the rough” and today, we assay three of these companies and their navigational skills for ourselves.
A new challenger approaches on the cannabis Bullboards this week:
Tetra Bio-Pharma Inc. (
TSX-V:TBP,
Forum). Amidst a sea of the usual suspects, the cannabis biopharma has been gaining ground and followers on the Bullboards since December and a glance at its price chart shows why: TBP jumped up from $0.20 on Nov. 22 to $0.54 on Dec. 4, and on Jan. 17 spiked up to $0.65.
The catalyst was Tetra Bio-Pharma’s Jan. 17 announcement that it
received Health Canada approval for two CBD-based over-the-counter pain treatments, and the company was far from done. On Jan. 21, the company followed with a
$10 million bough deal announcement at a price of $0.53, and following a two-day halt, a Feb. 3 announcement of
positive feedback and guidance from the FDA for a different cannabis-based product.
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The focus for the TBP Bullboard was on the last release, and especially the market’s muted reactions. Initially the results didn’t seem to warrant a two-day halt (and an additional two-day spacing out of the news from the company itself), but some closer examination showed there was cause for positivitiy. As Stockhouse Member
indaknownewfie pointed out, Tetra Bio-Pharma was operating with the FDA essentially solo.
“…TBP has the clinical studies that GW just had removed. That is HUGELY significant. That means TBP can include neuropathic and cancer pain on its product monograph. Opening up the entire pain market for TBP dominance.”
(Po?st: Why Wendy Hulton's release make sense)
On the technology Bullboards, tech developer and provider
Quarterhill Inc. (
TSX:QTRH,
Forum) returned to the top of the most-viewed chart with a vengeance. If you aren’t familiar with QTRH, the company is big in the Internet of Things (IoT) sector and has been involved in a court fight with a little-known tech company named
Apple Inc. (
NASDAQ:AAPL). It’s attracted some serious Stockhouse fans over the past year, and last week, they had cause to celebrate.
QTRH shares climbed from a $1.83 close on Jan. 23 to $2.04 on Jan. 27, hitting a year high along the way. Why? Likely because Quarterhill’s company
WiLAN Inc. was
awarded $85.23 million in damages from Apple for patent infringement in a re-trial, after winning the initial trial in 2018.
But it wasn’t all good news on the QTRH Bullboard. While the court decision was positive, Apple has shown no signs of playing along just yet. While many users wondered whether things would head to appeal or if Apple would issue stock to settle, Stockhouse Member
cabbieJBJ pointed out that the company’s quiet following the settlement is likely the sign of behind-the-scenes negotiations.
“There is little doubt in my mind that Wilan and Apple are talking, and probably that talk goes beyond the Stanwood IP. While it has gone largely under-reported, the Wilan sub has gone from a USA-focused, one-trick pony 10 years ago to a major worldwide IP player, especially in the wireless and semiconductor spaces. I'm 100% certain that Apple sees global license demands from Wilan for its IP in jurisdictions where IP enforcement is less slanted towards efficient infringers such as Apple and with injunctive relief. There is a potential elephant in the room: Apple will start to make their own chip in the very near future. Wilan has assembled a world class global IP arsenal in the semiconductor space, which might mean that Apple is facing the prospect of staring down the barrel of a gun...”
(Po?st: Yes the silence fron Apple is deafening...)
When we last checked in with
Xebec Adsorption Inc. (
TSX-V:XBC,
Forum) at the start of the year, the clean energy company was
on the way up to $2.63 on Jan. 7. A month later, it has cemented itself as a new favourite for the industrial Bullboards. Over the last week, XBC has continued to establish new year-highs, going from a $2.91 close on Jan. 23 to $3.30 on Feb 4.
Why is Xebec on the up? In January we pointed to increasingly positive analyst remarks and price targets as the catalysts ahead of company news releases, and the same story seems to be repeating itself. Xebec’s only announcement in 2020 so far, however, was a boon for investors: a Jan. 2020 release welcoming Brian Levitt, the chairman of
TD Bank (
TSX:TD), as an
advisor to Xebec’s board of directors.
Breaking down the stock’s movement has been a challenge for the XBC Bullboard, but so far they’re up to the task, highlighting some new analyst price targets and general commentary about the company’s stock. Further, as Stockhouse Member
treehill pointed out, the trend for Xebec over the last year and since adding Levitt has been consistently upwards.
“…the latest Xebec investor presentation shows that the rate of revenue growth since 2016 has been 53%, 37%, 87% and projected to be 111% for this year. In other words, not only is Xebec growing its revenues, but the rate of growth is increasing.
We have had 10 trading days since Xebec announced Brian Levitt as a director. Over that time the average daily volume has been just over 1 million shares, compared to an average of about 490,000 for the previous 10 days. More than double - it looks almost like a bit of a paradigm shift for the stock. While there may be short term corrections, there is little doubt in my mind that this stock is continuing up.”
(Po?st: Some observations)
While the three companies we looked at this week have been on the up, the markets were another story. On one hand you had the
effects of the Wuhan coronavirus rattling global markets, and on the other, the publicized US Senate Impeachment Trial of President Donald Trump. We asked Stockhouse readers what they thought the outcome would be and, as if it was obvious from the get-go, many called it right.
Our newest
Investor Pulse Poll asks about something that’s been quietly bubbling in 2020: the Canadian energy sector. Oil prices are down, but sentiment for Canadian stocks seems to be on the rise. What’s your take, what’s the outlook for Canadian energy stocks? Head to the homepage or click the image below to cast your vote!
(Click image to go to the poll)
February has already given us a wild market ride and some small-cap stocks that the Stockhouse Bullboards have gotten excited about. Next week will probably bring more of the same, and the weekly Buzz on the Bullboards review will be here to bring you some hot stocks. For previous editions of Buzz on the Bullboards:
click here.