Do rising tides truly lift all ships? The adage often holds true in investment circles, as strong markets or deals lift companies and competitors alike while negative sentiment can bring everyone in a sector down.
But a rising tide is simply upwards pressure on companies, and each is buoyed by a different amount. If the underlying fundamentals are solid, the tide will result in a surge, but if there’s uncertainty lingering, a slight uptick might be the sole result.
Over the last week and during the month of May, we’ve seen “rising tides” in healthcare with COVID-19 testing plays, cannabis, and gold projects. The most impressive, however, has been a directly linked tide that elevated two small-cap plays all the way to the top of the Stockhouse Bullboards.
The climb of
PyroGenesis Canada Inc. (
TSX-V:PYR,
Forum) was already impressive before last week, but now it is truly head-turning. The high-tech plasma processing company topped the Stockhouse Bullboards as shares rose steadily from around $0.70 (just shy of a 52-week high at the time) on May 15 to $1.28 on May 27 and hitting $1.85 on June 2. That gives
PYR a one-month rise of 164% and a three-month rise of 362%.
Two major news contributed to the company’s rise. First was the May 19 announcement of
entering negotiations with a major multi-billion-dollar iron ore producer for PyroGenesis’ plasma torch systems. In addition to the producer potentially needing 50 torches at each of their 10 processing plants, the announcement included a tidbit that discussions had started with other producers and other potential industrial producers as well.
The second bit of news on May 26 was a doubling-down of a partnership between PyroGenesis and basic materials company
HPQ Silicon Resources Inc. (
TSX-V:HPQ,
Forum). The two firms
agreed to issue PYR a bigger stake in HPQ as a form of debt settlement, as they continue to partner on HPQ’s PUREVAP
TM processes for development of silicon nano-materials. And as PYR rose on a rising tide of investor excitement, so did HPQ from $0.075 on May 22 to a high of $0.16 on June 1.
For investors on the HPQ and PYR Bullboards, the companies have become clearly linked. On one hand, the positives of rising tides speak for themselves, while on the other, users are also wary of the potential for one sinking ship to bring down another.
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However, the general mood on each company’s Bullboard is that investors very much believe in their respective outlooks. The PYR rise is seen by many as a result of all signs pointing out that the supplier is likely to sign a major deal and act as precursor to further success. For Stockhouse Member
topseeker, the opportunity is less about hype and more about analysis.
“We can see how well PYR has done in so very little time as charts show. The point is it's not greed driving it but the reality of a strong possible single major contract being signed by a single entity with PYR. Based on the NRs, taking the time to dwell on them, my 4Ns is on that it will be signed. And other firms will follow suit.
No one will want to be left behind. Be certain that they all want to make good money & present themselves as good/responsible corporate citizens fighting climate change too in real terms…”
(Post: Greed ? ! - Nothing of the Sort)
And as investors start to see the fruits of PYR’s strategic decisions, the company’s faith in HPQ looks even more promising. The company has a tall task of supplying EV batteries with substitute materials, but for Stockhouse Member
developbc, HPQ have a strong and supportive wind at their back.
“Based on the highest probability that PUREVAP will succeed in commercializing Silicon nano-powders wafers for EV battery space, HPQ in my opinion should be at least a 300 million market cap company with a potential to eclipse billion dollar market If they dominate the space. By the sounds of it, PyroGenesis’ CEO [Peter Pascali] is extremely confident of the highest of probabilities they will succeed and they have lot of expertise to back up this confidence. As we know, Pascali stated the economic growth and opportunities with HPQ in the space is nothing short of intoxicating! Now people are starting to believe...”
(Post: RE:FOMO)
But as one tide rises, another one falls. COVID-19 testing plays which were very recently at the top of the Bullboards have started to retreat, with the former
DataMetrex AI Ltd. (
TSX-V:DM,
Forum) among them. The AI-data-company-turned-coronavirus-test-importer saw shares recede a bit from a May high of $0.175 on the 6
th to $0.12 on May 12, and continued to hover around the same point.
The slight retreat and stall hasn’t been for a lack of news, it’s been from a lack of the
right news. Everyone is awaiting the final Health Canada approval for the importing of test kits, which will signal the true start of DM’s COVID-19 test importing revenues. Despite otherwise impressive releases on May 15 of
sales of test kits to a Canadian mining company, on May 21 of a
partnership for COVID-19 test processing, and even on June 3 of a
different government
approving the company’s test imports, it wasn’t the release everyone is waiting for.
As the time without Health Canada approval has seemingly dragged on, some users on the DM Bullboard have justifiably become exasperated. With other slightly less efficient tests already receiving approval, many feel it is either a matter of time for DM or something else is holding things back behind-the-scenes. However, a few investors pointed out that not receiving news yet is still well within the timeline given by Health Canada, and for Stockhouse Members like
Snakebite18, the important thing is still that COVID-19 testing is secondary and bonus to the company’s A.I. business.
“I think there's a little too much [focus] on the COVID side of things. Not that I don't appreciate all the positivity, don't get me wrong. I think they are going to do quite well with that but the reality here is they are a A.I company first and foremost… DataMetrex has been labeled a "world leader" in their field and are very rapidly getting the attention they deserve. The hard work is really starting to pay off... The Americans have taken notice and are tapping them for contracts as well as other countries. Once those contracts start coming in and the rest of the world stands up and takes notice to they exceptional service and products the can offer to the entire world, there will be almost no limit to how high this company can go…”
(Post: A.I.)
One of the biggest rising tides from last week was seen in the cannabis sector. Led by promising results from a few operators and major LPs, the sector saw consistent gains and was back in play, at least until poor and unexpected results from
Canopy GrowthCorp. (
TSX:WEED) put a damper on the rally. Our latest Investor Pulse Poll has been asking Stockhouse readers if they believe the tide is truly back in the favor of cannabis, and the results so far are positive, albeit mixed.
With another week of clarity, we’re expecting responses to keep changing, so the poll will stay open for another week. If you’d like to still cast your vote, please head over to the
Stockhouse homepage or click the image below to let your voice be heard!
(Click image to go to the poll)
2020 continues to be an uncertain rollercoaster for investors, and who knows what the tide will bring in next week? One thing is for sure: some small-cap companies will rise, others will fall, and the keen investors on the Stockhouse Bullboards will be there. For previous editions of Buzz on the Bullboards:
click here.
FULL DISCLOSURE: PyroGenesis Canada Inc. is a client of Stockhouse Publishing