Stockhouse Ticker Trax
is published to subscribers every Monday (annual cost only $195
). We focus on best-in-class high growth
small companies trading on the TSX and TSX.V between 5 cents and $3 with a market cap below $300 million.
Equity Analyst Danny Deadlock has 30 years of experience speculating on Canadian penny stocks and targets capital gain opportunities and diversification in metals and minerals exploration, energy, and technology.
For the experienced investor, Ticker Trax provides an extra set of eyes and ears (idea generation) and for those learning to invest in micro cap stocks, we provide stock picks and market education.
; (1) new research (stock picks) weeks in advance of being featured on this weekend column (2) exclusive
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access to our list of Cash Rich micro cap companies (our Virtual Vulture Fund) which contains 80 companies with almost $3 Billion.
Both tables are updated monthly.
MEDICAL MARIJUANA - LITERALLY ON FIRE
Once you see the charts below you may agree that these are bordering on the ridiculous (irrational).
At this stage (because we will no doubt see more going from metals exploration to selling marijuana), a handful of companies are planning to enter the medical marijuana business and almost doubling on the "notion". The majority are up hundreds of percentage points in the first month and gains in excess of 1000% have not been uncommon.
The companies can state that nothing has been “secured” but traders simply don't care. On the CNSX they can get away with a simple “change of business” (COB) but on the TSX or TSX Venture a COB can result in a trading halt that lasts months.
The CNSX (www.cnsx.ca) is becoming the "go-to" exchange for pot stocks but be cautious on the TSX.V where the guidelines are very strict.
is doing a reverse takeover (RTO) through LW Capital Pool Inc.
, Stock Forum
) (halted) so this will be the first high profile Venture Exchange listing and will be watched closely.
Friday morning a very small company called Supreme Pharmaceuticals Inc.
(TSX: V.SL, Stock Forum) (4 cents)
announced they "may" be getting into the medical marijuana business. Because they are not a mining related company but life sciences, this may serve as a TSX Venture vehicle that works better for this type of industry - I really don't know - but it may be one to watch.
I don't cover alcohol, tobacco, or ... marijuana. As a microcap equity analyst and writer of an investment letter I try to avoid politics, religion and certain industries. There is no doubt money can be made (and already has been made), but a LOT of money will also be lost.
Speculators will get drawn into the hype and in typical Canadian penny stock fashion many companies will end up nothing more than aggressive stock promotions reminiscent of mining companies. Typically those early to the table will make a small fortune (along with professional traders along the way) and the typical retail investor will be left holding the proverbial bag - in this case maybe a bag of weed!
No doubt some companies will do very well and the cream will eventually rise to the top. But it is inevitabl
e that widows and orphans will be left standing by the road wondering what just happened.
This entire industry is new so trying to value these companies will be extremely difficult. Plus brokers and analysts will have to struggle with the ethical questions associated with the industry. They will need to balance the money they can make from investment banking relationships vs. the damage it may do to their credibility or the clients they may offend by issuing positive research reports on drug usage.
Regardless of the outcome it will be interesting to see how this industry evolves from a public company perspective.
Many Americans already view us as a bunch of pot smoking hippies
- so we may as well be the leaders in using public companies to raise funds designed to fuel a generation of younger pot smoking hippies! Realizing of course I say that with a strong hint of sarcasm.
MARIJUANA STOCKS ON THE CNSX:
Next Gen Metals
, Stock Forum
) ($0.60) - nextgenmetalsinc.com
, Stock Forum
) (93 cents) - enertopia.com
I was going to trade TOP back in January at 18 cents but avoided it because it was tough to buy on the CNSX and I was unsure how these would perform in Canada. Not one of my more brilliant decisions!
, Stock Forum
) ($0.74) - lexariaenergy.com
, Stock Forum
) ($2.40) - abattis.com
AMERICANS STARTED THIS VALUATION INSANITY IN 2013
A few of these companies in the United States border on a joke. FITX for example ran from 0.0009 in Sept 2013 to 11 cents by February. How is a public company even allowed to trade that low without being bankrupt?
This occurs too frequently on the U.S. Pink Sheets and it's the reason I avoid that market like the plague - it makes the old Vancouver Stock Exchange look like the NYSE.
If you are interested in researching this industry further. Here is the list of companies I could find in the United States.
FITX $0.09 - cenbiotechinc.com
PHOT $0.65 - growlifeinc.com
ZDPY $15.51 - zonedproperties.com
MNTR $4.65 - mentorcapital.com
EFFI $0.07 - efftec.com
HMTF $2.26 - hometreasurefinders.com
MDCN $3.00 - medicaninc.com
CANV $61.45 - MedicalMarijuanaInc.com
CBIS $0.18 - cannabisscience.com
EDXC $0.29 - endexx.com
FSPM $6.58 - fusionpharminc.com
GRNH $0.58 - greengrotech.com
HEMP $0.12 - hemp.com
MDBX $30.36 - medbox.com
MJNA $0.31 - medicalmarijuanainc.com
MWIP $0.50 - mediswipe.com
TRTC $0.98 - terratechcorp.com
** TWITTER NOTE: I maintain a twitter page at - twitter.com/tsxalerts