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Buzz on the Bullboards: Healthcare Falls, Cannabis and Energy Rise


Omri Wallach Omri Wallach, Stockhouse
0 Comments| June 11, 2020

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“What goes up must come down.”

Over the past few months, many of the most-viewed and best-performing companies on the Stockhouse Bullboards have been in healthcare. Now, some of those companies are seeing excitement wane and share prices fall.

At the same time, what was once down is starting to rise back up. The apparent resurgence of the cannabis market has already been duly noted, but a shockingly strong week for oil and gas companies has brought the energy sector back into the fold.

As the largest investor hub in Canada, Stockhouse has plenty of small-cap focused users invested in the dramatic gains and losses made each week. They help us break down the seeming fall of a healthcare king and rise of two down-and-out sectors.

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The rise of pain medication developer Antibe Therapeutics Inc. (TSX-V:ATE, Forum) following the downturn in March impressed many, and kept the biotech company on the most-viewed chart alongside companies involved with COVID-19. Shares of ATE quickly climbed from $0.415 on Mar 18 to start hovering around $0.70, hitting a peak of $0.77 on May 29. Since then, however, ATE has seen a quick descent, dropping 41.5% to $0.45 on June 9.

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What happened? On June 1, Antibe announced Phase 2B study results for its lead drug, ATB-346, which were largely positive. However, many of the top insiders in the company sold shares immediately following the release, and the details of the results themselves seemed muddied in comparison with previous study results.

Understandably, these were red flags for many investors, and many on the ATE were less than thrilled and downright concerned. But on June 9, Antibe announced a massive $25 million bought deal offering at a price of $0.40, which seemed to indicate a new floor that was still an improvement over 2019.


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Was the decrease truly indicative of worrying performance, or had management simply taken the chance to momentarily cash in? With some impressive underwriters in the recent offering and the company needing cash, most users are leaning towards the latter scenario and still like where Antibe is headed. Still, many like Stockhouse Member MUGMODs are rightly a bit burned by how things shook out.

I guess my biggest concern is the optics of what we've witnessed. As I think about it more and more, I guess there wasn't much of an option if you are cashing up for negotiations - to earn the best results. I keep thinking they should have cashed up while we sat in the 55-70 cent range, but the money was probably waiting for Phase 2B results before they'd invest. Add to that the insider selling. Add to that the initial confusion about the results – were they good or not ? Did we have Phase 2 closure or did we not...’
(Po​st: RE:Institutional Investors)

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On the other side of the coin, cannabis companies have been making an impressive climb. Previously the leading LP of a then-battered sector, Aphria Inc. (TSX:APHA, Forum) had fallen in interest compared to its louder, noise-generating peers. Recently however, APHA is back on the climb and interest in the company has picked up. Shares climbed from $4.21 on May 14 to $5.87 on Jun 5, before a massive Monday boost in cannabis sent APHA to $6.78 by Jun 9.

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Aphria’s climb comes on the back of renewed optimism in the sector, and a well-timed listing on the NASDAQ on June 8. As others like HEXO Corp. (TSX:HEXO) posted huge rallies around them, Aphria’s operating strength after an earlier stumble has put it back in the position of “strong and sound LP” compared to some of its brethren.

Unfortunately, the resurgence of cannabis has also resurfaced short sellers eyeing the sector for a renewed crash. Many on the APHA Bullboard were a bit wary of the recent uptick, and the company has been a favorite of shorts in the past. However, the company’s overall strength and NASDAQ listing were plenty of explanation for Stockhouse Members like Daredevil1964, alongside a new analyst recommending APHA as a buy.

“The street may be now paying attention to Aphria for holding that $5 USD level. Institutions will take notice. One analyst changed his rating to a buy from neutral, so I believe we are at 6 buy and 1 hold in terms of analyst's ratings. Remember the RSI is not only for indication of over bought and over sold conditions, it is also an indicator that shows the bullish strength or bearish strength of the stock…’
(Po​st: On a day like today we managed to gain and hold 5 USD.)

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Finally we end on the beleaguered energy sector… at least until last week. Everyone on the market has been paying attention to low oil prices and negativity in the sector over the last few months and awaiting the fallout or recovery. One glance at the chart for Calgary oil-and-gas producer Baytex Energy Corp. (TSX:BTE, Forum) shows that last week was a big recovery indicator. BTE shot up from $0.44 on June 1 to a high of $0.94 on June 8, easily topping a three-month high.

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The driving news wasn’t from Baytex themselves, but the entire sector. A combination of easing coronavirus restrictions leading to a steadily increasing demand for oil, combined with OPEC+ committing to prolonging cuts and reports of Saudi investors buying into Canadian companies, sent crude prices on a weeklong rally and Canadian producers alongside them.

However, the three-month high is still well short of where Baytex and other producers were before March, or even before January. Users on the BTE Bullboard remember when the company was hovering around $40.00 and not struggling to break $1.00, but times are rightfully bleak. However, there’s plenty of money and upside to be made for BTE, and Stockhouse Member saintpeeter pointed out that the sector might finally be working together for everyone’s benefit.

“It seems that all the major producers have finally reached a consensus that supply management is the only way for the industry to be sustained. I'd say it was the American shale production that was the biggest offender but it was good politics domestically, can't say I blame them. The double shock of Saudi oil glut and COVID finally drove home the point.

Let's face it, oil is just a commodity verging on a utility. It is the traders that make it so volatile. I'd be happy to see our Cdn oil companies work as a utility - I know many people are looking for fast gains - and that’s what makes a market.”

(Po​st: RE:My Prediction for June 25, 2020 Baytex Energy)

In light of the recent sustained rally in cannabis, we’ve been asking Stockhouse readers if the small-cap favourite market is back for good. Early results leaned slightly towards pessimistic, but another strong week in the bag has increased confidence and split opinion down the middle.

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But the talk of investment circles, news media, and government meetings alike are all about the terrifying potential of a second wave of COVID-19 infections putting a stopper on the resurgent economy. Our latest Investor Pulse Poll on the Stockhouse Homepage asks the tough question everyone wants to know, and no one wants to answer: When will that “second wave” crash happen? Click the image below to cast your vote!


(Click image to go to the poll)

As this week showed, you never know what to expect when it comes to each sector’s performance, or the general market. Investors should stay as up-to-date as possible, and for the latest on small-cap stock movements, there’s no better place than the Stockhouse Bullboards. For previous editions of Buzz on the Bullboards: click here.


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