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That is why I am going to join Claytrader need a better understanding of charts. Also Chat room is important. I like this especially when I am typing in response to serious investors you learn a lot. Thanks for the email.
Hopefully however, just part of stocks up and down movement. Could even go lower. Would be nice to have a little news Thursday.
You are correct volume precedes price. A stock that has this kind of interest has great potential. So let's keep waiting for the Big News. License approval.
Excellent.
Bottom line stocks go up and down and penny stocks are subject to this as well if not more. This company is on the move. We know that for sure. Someone is grabbing lots of shares at a great price. I think this is just a cycle caused by day traders. All hang in their.
Battle for cheap shares go on. I am holding realizing we can go further. We are at least withing a week or week and a half before news. Go Fitx
Yes you finally cracked the code. And get this all shareholders are going to be sent an application with a lottery number to work as guards>(Pending Approval by HC Investigators)
Great pic thanks for picture it says a lot. The place with that fence really does look like a Prison.
I do think your right re year. However, there will be points that you can make money now. I am not a long term investor. But the business plan could take off quickly re R&D.
I am sure we will hear good news besides license, but that is the only one that counts. After that as they say in basketball its nothing but NET.
Remember shorts never give up. Part of game. Whether penny or Nas or New York Stock Exchange. Keep up the good work Johnny we are a week to a week and a half away.
It is normal for stocks to rise and fall. When news does come out we will see something different. For now do what you wish, hold, buy and sell. This is still a great company.
Excellent
You are correct he figured he was going into reveal something in the 60 minutes mentality. When all he did was prove himself a copy of the 1950 reporter in Superman, Jimmy Olson, who was always looking for the "Big Scoop." I enjoy all positive and negative comments since they make me think but not tabloid stock analysis who will never make "CNBC" but would be fodder for the Ilk of a Jerry Springer.
What about the following:
Notice Fitx was able to disassociate itself from Phot with Good PR.
Somewhat disturbing, Tweed's IPO was a flop, even though it is the only company in the sector legally allowed to sell medical marijuana.
And I find it very surprising that FITX gains 27% despite being most closely tied to PHOT. A lot of PR and IR helped FITX disassociate from the PHOT meltdown. I am sure FITX investors would argue that is a testament to FITX's value and the confidence people have in FITX.
PHOT resumes trading. Any Tsunamis left? Sell in May?
Fitx is the only MJ that did not continue to slip!!! Read following.
April 23rd to the present. Despite neither CANN nor PHOT are being investigated after their halts, and MMPRs are finding customers, investors continue to lose hope.
The most anticipated Marijuana stock of the year, Tweed Inc., continues to slump. It has dropped -11.5% despite announcing that demand for marijuana has been higher than expected. It seems that no one reads the memos.
Since PHOT has resumed trading, 11/12 stocks that we have been covering continue to slip. FITX is the only exception despite the fact that it currently does not have any marijuana sales.
PHOT's -78% is painful to look at. Unlike CANN, PHOT has not bounced up from its fall.
Conclusions: Investors behave irrationally.
Reviewing The Wreckage
Chronic: Tell me what you think of the following article.
Marijuana Stocks: Half A Year In Review Part 1, Tier 1
May. 12, 2014 6:44 PM ET | 25 comments | Includes: ATTBF, CANN, ENRT, FITX, GWPH, MDBX, MJNA, PHOT, TRTC, VPOR
Disclosure: I am long ATTBF, MDCN. (More...)
Summary
12/12 Marijuana stocks are priced lower as of Friday, May 8th than they were the day before Yellen announced possible interest rate hikes.
Because investors are unable to handle bad news, these twelve companies all have dropped in value dramatically.
Although nothing has essentially changed since March 18th, just as positivity begets positivity, negativity begets negativity in the marijuana sector, and value suffers for it.
What Happened to the Marijuana Industry?
ATT data by YCharts
Vapor Group Inc. (OTCQB:VPOR) an obscure vaporizer manufacturer in Florida became the stock of the year gaining nearly 59,070% percent.
Canada's Medical Marihuana Purposes Regulations (MMPR) program was the real story of the year. Set to take effect April 1st, Canada has given investors the opportunity to directly invest in the sales of dried herb marijuana. Companies touting objective to enter MMPR arena rose +1,000%. Enertopia Corp. (OTCQB:ENRT) (TOP) rose 1,300%, Abattis Bioceuticals (OTCPK:ATTBF) (ATT.CX) rose 12,200%, and Creative Edge Nutrition Inc. (OTCPK:FITX) rose 1,700%.
GW Pharmaceuticals (GWPH) and Medbox (OTCQB:MDBX) had impressive gains of over 60%, which of course is modest in contrast to the other marijuana players.
Medical Marijuana Inc. (OTCPK:MJNA), not so impressive considering that 2 years ago its gains influenced the rest of the sector.
Growlife Inc. (OTC:PHOT) gains seem unimpressive, considering it has been perceived as the #1 stock in the sector.
Finally, Advanced Cannabis Solutions Inc. (OTC:CANN) and Terra Tech (OTCQB:TRTC) give investors a nice return on their buck with CANN almost hitting 1,000% in gains.
And Medican Inc. with very little institutional coverage managed to run up almost a 1,000% as well.
Putting money in the marijuana industry felt great. Everyone was making enough to retire young. The 12 stocks I compare here are not necessarily the top in the sector. These companies make it to the 'Tier 1' list either because of their popularity, that it traded above a dollar, or because of their notoriety in the sector.
If you bought any marijuana related stock on December 31st, 2013 prior to the passage of Colorado's legalization marijuana bill, by March 20th, 2014 you would have seen some unbelievable returns.
So what happened?
I count #5 "tsunamis" that have hit the market pretty strongly. As investors, we rarely assess the past in light of the present. We are correctly told that past performance does not determine future value but we mistakenly also assume that past performance doesn't affect current perceptions. And it does. As each tsunami hit the sector, investors refused to reflect in a rational and constructive way. Rather, investors bullied each other into "buying dips" rather than protecting their portfolios.
The color red now stains our brokerage accounts. And as many of our investments continue to bleed, we don't mend the gashes but keep carving away, praying that the carnage will stop. To mend the wounds we need to recognize that the sector was in a bubble and it burst. It doesn't mean the stocks won't return to their prior valuations. It means that the valuations we were giving our investments were too preemptive. We were a few years ahead. Some of the players in this industry have genuine value. But we have to have more patience. By 2018 the US and Canada marijuana market could be returning $7.3 billion in revenues.
I have a developed a chronology to mark five different points where investor confidence was damaged. For the future of the industry, we need to regroup and reflect whether these catalysts justify short-term caution or long-term bearishness.
Marijuana Stocks, A Series of Unfortunate Events
ATT Chart
It doesn't take much to kill investor confidence. The Lehman Bros crash caused a domino effect in 2008 that sent the global economy into a tail spin.
But the marijuana industry has been more resilient given the circumstances. After five strong tidal waves, only GWPH has managed to have capital appreciation. Since March 21st, Losses here range from -12.1% to -81.2%
Tsunami #1: Yellen
ATT Chart
ATT data by YCharts
Yellen to the Court Injunction, March 18th to March 21st.
The S&P 500 was slightly phased by this news. But Marijuana stock investors clearly overreacted.
A mini hit on the sector. CANN (-23.2%), MDCN (-20.2%) TRTC (-21.9%), and PHOT (-14.8%) are hit hardest by this news.
Investors in MJNA (2.33%) and MDBX are either indifferent or feel positive about this news
Both VPOR and ATTBF react accordingly but bounce back for a 7.58% gain and an 8.85% gain.
ENRT, GWPH, and CANV, and FITX all stay above double digit losses.
Tsunami #2 The Court Injunction
On March 21st, no less than 2 weeks before Canada's MMPR would take effect, a federal court ruled that 25,600 patients with Medical Marijuana Access Regulations (MMAR) licenses could continue growing marijuana for personal use.
Court Injunction to CANN's halt, March 21st to March 27th.
TRTC (21.14%) seems to react positive to the news. But in fact, this is just a recovery from investor's overreaction to the Yellen halt. Investors are confident that the injunction has no bearing on the success of TRTC
Double digit downers: ENRT (-45.6%), ATTBF (-41.5%), CANV (-30.2%), MDCN (-18.6%), MJNA (-12.8%) and FITX (-10.4%). It is unclear why MJNA joined the fall.
GWPH (-9.83%) nearly hits double-digit downs. PHOT, VPOR, and MDBX continue to slide.
Conclusions: Marijuana investors don't take bad news well.
Tsunami #3 Advanced Cannabis Solutions Halt
ATT Chart
ATT data by YCharts
Chart from March 27th to April 8th.
TRTC (-31.1%) drops back to Yellen lows.
ATTBF (1.39%) is resilient to the halt.
MDCN (51.32%) investors decide that CANN halt has no bearing on its future in Canada.
ENRT (-20.2%) drops further along with FITX (-19.1%), MJNA (-17.6%) GWPH (-11.1%), MDBX (-10.8%), and PHOT (-9.38%)
The hardest hit by this VPOR (-61%).
ENRT and ATTBF did recover slightly in a last ditch run before April 1st.
Conclusions: stocks with a lot of fanfare do not take bad news well.
Tsunami #4 The Wolf Bubble Bursts
ATT data by YCharts
Chart from March 25th to April 10th.
CANN getting halted and VPOR bursting clearly put a damper on the sector.
After hitting a peak of 0.418 p/s for total 70,000% gain YTD, VPOR's drop hurt.
ATTBF joined VPOR for the nose dive, losing 40.5% of its value. Nevertheless, as we saw above, it did not drop further after CANN's halt.
Conclusion: We can see that some of the more hyped plays this year are more dramatically affected by bad news. What does this mean for your investment?
TSUNAMI #5 PHOT Halt: April 10th to April 23rd
ATT data by YCharts
Chart from April 10th to April 23rd.
Although PHOT was considered one of the most beloved in the sector, the drops here are considerably less than expected in contrast to the other "tsunamis."
We see that ATTBF was the most negatively affected by this news, taking a 30% dip.
The three losers were: VPOR (-29%), ATTBF (-23%) and MDCN (-23%).
And GWPH (29%) makes a big turnaround, most likely due to the positive institutional sentiment.
Somewhat disturbing, Tweed's IPO was a flop, even though it is the only company in the sector legally allowed to sell medical marijuana.
And I find it very surprising that FITX gains 27% despite being most closely tied to PHOT. A lot of PR and IR helped FITX disassociate from the PHOT meltdown. I am sure FITX investors would argue that is a testament to FITX's value and the confidence people have in FITX.
PHOT resumes trading. Any Tsunamis left? Sell in May?
April 23rd to the present. Despite neither CANN nor PHOT are being investigated after their halts, and MMPRs are finding customers, investors continue to lose hope.
The most anticipated Marijuana stock of the year, Tweed Inc., continues to slump. It has dropped -11.5% despite announcing that demand for marijuana has been higher than expected. It seems that no one reads the memos.
Since PHOT has resumed trading, 11/12 stocks that we have been covering continue to slip. FITX is the only exception despite the fact that it currently does not have any marijuana sales.
PHOT's -78% is painful to look at. Unlike CANN, PHOT has not bounced up from its fall.
Conclusions: Investors behave irrationally.
Reviewing The Wreckage
March 18th to the present.
12 out of the 12 companies we have been looking at have seen losses since the Yellen Tsunami, ranging from GWPH -5.21% to PHOT's -83.9%
11 out of those 12 are down double digits and 10 of those are down more than -30%.
Nothing much has changed to the marijuana besides perception.
Conclusions: Investors behave irrationally.
The question you should ask yourself after looking at these charts is, what did you expect? When the value of a stock rises rapidly because of pumps and not intrinsic value, maintaining those prices will be impossible.
^NDX Chart
^NDX data by YCharts
The Nasdaq (^NDX) and Gold and Silver joined marijuana investors for the dive, sort of.
But for the most part change has been slight. Life kept on going.
NYSE Composite (^NYA) rebounded for a nice 1.58% gain
PHLX Gold and Silver Index (^XAU) seemed to be the only index severely affected by the Yellen remarks.
Reflexivity and The Irrational Investor Theory
The message is: investors you create your own reality. Because the illiquid nature of these stocks it is very easy to manipulate the price, every buy and sell moves the price. These stocks have a tendency to overreact to news, positively or negatively.
The stocks that I listed here are not necessarily the "top" players that will lead the industry. Nor are they the most followed stocks. These are companies that I try to follow because I feel their movements can affect the rest of the players.
Not one company out of these 12 is priced higher than it was on March 18th. What should you take away from this? While one might think it is sell on the moment you hear bad news, in fact, it is don't buy unless you plan to hold. Investors who bought these stocks dreaming of gold and now look at their portfolios as a bloody massacre should realize that only they are responsible. We drove these prices up and now we drive them down. Simple as that. We bought high and sold low. This causes illiquid securities to be devalued.
Writing about the marijuana industry is fun because one cannot use the normal metrics to discuss it. But I think understanding why certain stocks gain value and others don't gives us profound insight as investors into how markets operate. Although underlying value is always nice, perception and sentiment rule, at least in the short term.
What the last few months teach us is that the value of stock ownership isn't based on the historical underlying value of a stock it is based entirely on the perception that stock will be worth sometime in the near future. Although this might be obvious or well-known to some, I think it is easy to forget this basic fact about investing. So much so marijuana stocks rising nearly 70,000% in value within a matter of months indicates that capital gains don't have to be related to the value of the company at all.
Conclusions
So, what's changed? As far as I can tell, nothing. MMPRs are selling marijuana, legalization is slow-going but moving along, and CANN and PHOT are not under investigation. So, what happened?
I am a contrarian. I buy when stocks are down and sell when stocks are up. Investors like to do the opposite. I see this as a buying opportunity. Since Yellen, the halts, and bubbles bursting, I've done nothing but wait for stocks that I like to fall hard enough to find a great buying opportunity. Some of the stocks here are still 'overvalued' and may continue to fall. Others I think have great potential that investors have yet to notice. The sector can continue to slump as we go into the summer. But I am going to do my due diligence and find the real gems. And no matter what, I will always avoid the hyped plays.
Editor's Note: This article covers a stock trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
UPDATE YOUR ALERT SUBSCRIPTIONS NOW:
That sounds well and good except for the fact the company that has 3.4 would be considered to be by many already diluted. Regardless of the fact they could issue more. Lets assume this company had 500 million outstanding shares and another 500 mill authorized. I would buy into the company on good news with the 500mil since it is likely to go up quicker then the one with 3.4mil. I could always sell. The 3.4 million looks hampered to begin with aside from the fact the company with 500 million could clearly cancel the rest of the shares that are authorized therefore increasing the value of shares. I am getting close to 15 messages.
If neither company is making money and one has 500 million shares issued and another has 3.4 and neither is making revenue why would you want to pick the company with seven times the shares of b outstanding?
That is the essential analysis or the definitive consequence of not having the license, a dead company, like it or not. This is a very hard wait out because we are now at the mercy of a Governmental Entity. We can debate this all day but the "tale of the tape" is the license. I am sure the Government wants us to succeed since from my understanding, the firms now licensed cannot keep up with the demand. When I say succeed I do not mean in the personal sense but based on the officials passing a bill that is leaving patients without the necessary medication. It will be a great embarrassment to the Government.
With that you just won the argument, the license is the concrete or the foundation otherwise it is another pink with promises and high hopes that mean nothing but the investor losing money. As I have said before all views even those that question the company should be argued and debated on these boards. Pumping sky high or at this point saying all the pictures are phony and the whole thing is a scam are not needed. Yes your skeptical approach in all stocks is a necessary evil. If you believe all the hype you are not investing your actually praying in a hopeful manner, which is good for the soul but not the wallet. Always remember what Bill is trying to do in a bad economy is build a business. Lets see if we can be the economic beneficiary of his efforts.
Definitely between .11 and .16. Hard to say if it will go higher. But remember now we have a company that is finally in gear once we have license. Just think if you bought and there was an article that there would be a delay. You would buy into a sell off. Too Too Risky. Best bet buy on the news. Look at Dirv news came out stock went up.
Remember there were heavy bids on the buy side. Plus I feel there are a lot of people who selling at these prices will still make money. No way to know for sure. I am glad we are seeing a lot of shares traded which shows interest. I know it is discouraging when you compare this company to the other MJs and they have a better price. Even with all the good news we have. But I do feel we will get a nice pop on license news. Even Big investor or whatever that message says, will explode on license watch. There is no way around it. I also believe we are the best company out there. Thanks for your response if you disagree once again say why.
It will go up how high I along with others do not know. But I do think license like it or not is the key. Hopefully it will go to .16 I predicted weeks ago .13 to.15 Then again why do you think people are buying. This is already a little past 20mil still a great interest shown.
Without the license this will not go anywhere. Why take the chance until they get the license. Capo you cannot blame them.
I agree buy back would be very expensive. However there are OTC boards that just require .01 and I believe and audit to get on. Secondly there is the Nasdaq QXM (correct me if I am wrong) that is easier to get on. Remember MJ is a commodity. I agree without a reverse split very hard to get on regular Nasdaq. Let's see how high we go with license which is the only way it will go up. Finally if we get license what do you think will be the highest, .13 to .15 or higher???
I believe license and uplifting news along with audit will rise pps. Once again without they there is no planting or profit. License news is a must before stock goes up. Thanks for your enlightening posts.
If you are going to buy before the news you want cheap. Secondly there are a lot of people who made money on this and can afford to sell cheap. I do not feel the MM's have a secret plan. It may turn out your right but that is a result of shorts v those who hold for a better price. One thing we know there is a lot of buying. Remember old adage Volume precedes price.
If there was a license approval it would be a matter of public record and all one would have to do is call HC. I think we are still waiting. Could be this week no later then next week.
This is exactly why are state of the art facility is the best. Buying a chocolate factory or large old buildings increases the risk of contamination which can break a company. Now we see why Dr. Felten was brought in for Quality Control. There is no cheap way around. Excellent post.
Once again no matter were you are on the chart pps must be translated into MONEY for SHAREHOLDERS, "BOTTOMLINE.'
Right on. Plus are moving up in the Benzinga Index NO. 2.
We are lucky to have these people on board including Dr. Felten. Your right waiting periods can be great for shorts. Hold on an increase in pps is on its way.
So far it appears this Pr company is making the right moves. Because of Phot and Cann the sector was hurt. No doubt in my mind. We needed good news re "we are not in trouble like Phot" to insure the investors and potential investors they are not buying into a halted company. I know now we are right on track.
I agree but the reality there are investors holding onto big gains and if they sell now or at .05 will make money. However, if they let this run, you are right it will go up very high. Once again I look at what the market bears. But I will hold until it down trends then buy back hopefully the same day. Thanks for your response.
Thanks for the analysis. I do not have a business or finance background it is always good to get this information. Thanks for the response.
Thanks for your response.
I felt at first we would go up to .13 to .15 anything over .15 I will take. What is your evalution?
You are exactly right, along with grants and private placements to do research. Now we see why they brought in Dr. David felten and the founder of RXNB. Make no mistake Fitx is on the move. Remember we are now 2 on the stock lists Benzinga has first is GWPH which sell for 68 dollars a share.
Remember we are now no 2 on the Benzinga index after Gwph which is 68 dollars a share.
No doubt you are correct. Make million. Thanks for your response.