More posted thoughts on GRNH
Here is why I expect GRNH to be a 25+ bagger this fall:
Prior response to sector catalysts, as history is one of the best predictors of the future in terms of price action in a similar situation -- GRNH historically vastly outperforms the sector on any major catalyst.
GRNH was a 40-bagger in 6 trading days in January 2014 and an 8-bagger in 7 weeks this March/April -- that is best in the sector for each of those catalysts during their respective time periods.
Size of the "tradable float": this is obviously determined by subtracting out insider shares from total shares BUT there are a lot of other metrics that really influence this number besides % of insider ownership.
If one thinks of the float as the effective supply, then how tightly shareholders hold onto their shares during a rally is a very important metric -- and the rabidity of the shareholders has an outsized effect on this -- GRNH shareholders are very confident and passionate during a rally and are not quick to sell for a measly double or triple -- this effectively shrinks the float
The MMs who trade in this stock are of a similar mindset due to their prior experiences so there is also less MM churning of shares in GRNH in comparison to most other MJ stocks during a runup
There is no convertible debt so there will not be any new shares hitting the float during the rally, which obviously shrinks the float relative to most stocks down here
In addition, convertible debt invariably causes the owners of said debt to short all rallies in the stock so they can drive the stock price down, convert their debt and use those shares to cover at the bottom -- the less shorting that goes on, the smaller the tradable float
There are other certainly other factors that influence the size of the tradable float which certainly impact the supply of GRNH shares available to buy (and short) during a rally but the above are some of the larger ones
And then I like to think about the demand side of the equation:
GRNH is an old MJ stock, one of the original guard... So it is extremely well-known and popular... It is a huge favorite of those that follow the sector
Dollar volume is the single most important metric in regard to direct measurement of demand and GRNH's dollar volume is extremely high relative to the small float -- this is the perfect storm
The superior liquidity in GRNH, driven by the popularity of the ticker, further serves to drive demand and interest in the stock -- a huge reason why it is my largest holding
The CEO understands PR and knows how to create hype and excitement with press releases
Although true fundamentals in this situation are significantly less important, I do believe that GRNH essentially moved a ton of revenue from Q2 into Q3 so their mid-November report, the one all new prospective shareholders will be reading/following, should show a pretty impressive increase in revenues and the all-important press release summarizing the quarterly results should come across as pretty impressive
The comparative superiority of GRNH as a stock with money-making potential becomes a self-fulfilling prophesy as buyers gravitate to this equity over other options
In the end, the supply/demand ratio in combination with the superior liquidity in this stock will not only attract a large number of new shareholders this fall, but even more importantly, it will attract a large number of deep-pocketed individuals and groups who are not just looking for a quick flip on the double -- and in the end, big money is what really drives share prices in these types of scenarios
Sleek
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