Cannabis stocks have been pulling back over the summer, particularly over the last several days. Earlier in the year we gained some notoriety for our long AND short plays in the sector, particularly on Canopy Growth Corporation (CGC) (WEED.TO). See our past write-ups titled "Sell WEED, for The Tax Man Cometh" in April and "Buy WEED When There Is Blood On The Streets" in February. We are up to 633 followers despite not giving out a lot of alerts, a fact that we think is indicative of a diligent and prudent stock picking history. If you like our picks you can follow our blog by clicking the follow button on the top of the left hand panel. You can also follow us on Twitter @StockTradePicks. We have over 3,000 followers on Twitter as well.
While we think that Canopy is at a good price, there are actually better opportunities through two long term warrants in the cannabis industry and we want to maximize our leveraged upside. Warrants on Kalytera Therapeutics Inc. (KALY.V) (KALTF) under the symbol KALY.WT just started to trade last week and are at an extreme discount in our opinion. These warrants expire on August 8, 2021 at a strike price of $0.155. We traded Newstrike Brands Ltd. (HIP.V) warrants HIP.WT with great success in March. Since then, HIP has tanked to under $0.50 and a new set of warrants have started trading upon the latest financing.
Why do we believe that KALY.WT offer such tremendous value even as the warrants are out of the money? It is through the power of leveraging and long time to expiry on a volatile stock. As an early stage CBD biotech stock, KALY is very much an all-or-nothing play. Within three years it is likely to be much, much higher on great success, or a failure and diluted into oblivion. Not flat-lining at 10-15 cents for three years.
Therefore one can use warrants to risk less dollars invested for the same upside, or the same dollars invested for much greater upside, or a combination of both. This chart should clearly illustrate the potential of the warrants:
If you have $10,000, you have a choice to buy 100,000 KALY shares at $0.10 with that money. Or you could buy KALY.wt at $0.03. You can buy 100,000 for $3,000 up to 300,000 for $9,000 and still have varying degrees of cash left over out of that $10,000, while having the same or better upside.
If KALY goes to $0.01 at the end of the three year period, the warrants are worthless. But the shareholder lost $9,000 on the shares. The warrants allow you to risk less capital in this highly risky stock.
Now let's say KALY goes to $0.50 by the start of August 2021. Someone bought 100,000 shares or 200,000 warrants. The person who bought 100,000 shares saw their $10,000 turn into $50,000, for a $40,000 win. However, the person who bought 200,000 warrants spent $6,000 and saw their position increase to $69,000 (50 cents less 15.5 cents for the strike price of the warrants is 34.5 cents intrinsic value which you can either exercise or sell on the open market, multiplied by 200,000) for $63,000 profit. That person risked less money AND had higher upside.
Where this strategy can lose is if KALY doesn't move much at all. For instance, if KALY was to stay flat at $0.10 for the next three years, the warrants would expire worthless and warrant holders would lose everything, but shareholders haven't gained or lost any money. KALY.wt holders have to hope that KALY is at least $0.185 if they bought in at $0.03 in order to break even, but KALY shareholders would already be making some money at that price. But one must ask what's the chance of that happening? Either KALY is a big winner, or a big loser over the next three years. That's the nature of this stock. If you think KALY is headed above $0.25, it is really better to load up on warrants instead of stock.
Now how much should the warrants be worth? This chart shows that at 3 cents, the warrants are a really good deal. You can buy 300,000 warrants for $9,000 and still have $1,000 left over and nearly 3 times the upside at the shareholder. Here is an options calculator chart from CBOE:
It is showing that at $0.10 for KALY, 1090 days to expiry for the $0.155 strike, that KALY.WT should actually be worth 5.42 cents. It is better off for people to have 200,000 warrants for $10,000 than 100,000 shares for $10,000 because of the upside potential of the stock assuming 100% volatility, but buyers of the warrants today have an even better deal than that right now at 3 or 3.5 cents. With a 52-week high of over $0.50, you can argue that KALY has an even higher volatility than 100%, which would only increase the value of the warrants. You can click on the CBOE link above and put in your own parameters to figure out the fair value of the warrants.
The new set of warrants on Newstrike are HIP.WT.A, which expire in June 2023, nearly 5 years from now, and have a strike price of $1.00. We first brought up HIP.WT.A in our last post at $0.105 but it is still very cheap at $0.12. Why do we think they are such a bargain? Take a look at the value chart on Canadianwarrants.com:
This chart was updated on August 4th. At a price of $0.485 for HIP, this site gives HIP.WT.A a value of $0.32! Determining the value inherent in HIP.WT.A would be the same exercise as what we did for KALY.WT. But the difference is that we have an outside source in Canadianwarrants.com that is already giving us a fair value for these warrants, so readers don't have to rely solely on our word. KALY.WT should be up on this website soon, and will likely agree to our conclusion that these warrants are undervalued as well.
Disclosure: We are long HIP.WT.A and KALY.WT on the TSX.
Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
If you're interested in making money investing or trading the stock market, here are some good resources to assist you. This includes technical analysis, investing in the weed sector, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies.
Microcap Millionaires Free Video: Cheap Gold Miner Set to Soar in Fall 2017
The dividend stock report from dividendstocksonline.com
While we think that Canopy is at a good price, there are actually better opportunities through two long term warrants in the cannabis industry and we want to maximize our leveraged upside. Warrants on Kalytera Therapeutics Inc. (KALY.V) (KALTF) under the symbol KALY.WT just started to trade last week and are at an extreme discount in our opinion. These warrants expire on August 8, 2021 at a strike price of $0.155. We traded Newstrike Brands Ltd. (HIP.V) warrants HIP.WT with great success in March. Since then, HIP has tanked to under $0.50 and a new set of warrants have started trading upon the latest financing.
Why do we believe that KALY.WT offer such tremendous value even as the warrants are out of the money? It is through the power of leveraging and long time to expiry on a volatile stock. As an early stage CBD biotech stock, KALY is very much an all-or-nothing play. Within three years it is likely to be much, much higher on great success, or a failure and diluted into oblivion. Not flat-lining at 10-15 cents for three years.
Therefore one can use warrants to risk less dollars invested for the same upside, or the same dollars invested for much greater upside, or a combination of both. This chart should clearly illustrate the potential of the warrants:
If you have $10,000, you have a choice to buy 100,000 KALY shares at $0.10 with that money. Or you could buy KALY.wt at $0.03. You can buy 100,000 for $3,000 up to 300,000 for $9,000 and still have varying degrees of cash left over out of that $10,000, while having the same or better upside.
If KALY goes to $0.01 at the end of the three year period, the warrants are worthless. But the shareholder lost $9,000 on the shares. The warrants allow you to risk less capital in this highly risky stock.
Now let's say KALY goes to $0.50 by the start of August 2021. Someone bought 100,000 shares or 200,000 warrants. The person who bought 100,000 shares saw their $10,000 turn into $50,000, for a $40,000 win. However, the person who bought 200,000 warrants spent $6,000 and saw their position increase to $69,000 (50 cents less 15.5 cents for the strike price of the warrants is 34.5 cents intrinsic value which you can either exercise or sell on the open market, multiplied by 200,000) for $63,000 profit. That person risked less money AND had higher upside.
Where this strategy can lose is if KALY doesn't move much at all. For instance, if KALY was to stay flat at $0.10 for the next three years, the warrants would expire worthless and warrant holders would lose everything, but shareholders haven't gained or lost any money. KALY.wt holders have to hope that KALY is at least $0.185 if they bought in at $0.03 in order to break even, but KALY shareholders would already be making some money at that price. But one must ask what's the chance of that happening? Either KALY is a big winner, or a big loser over the next three years. That's the nature of this stock. If you think KALY is headed above $0.25, it is really better to load up on warrants instead of stock.
Now how much should the warrants be worth? This chart shows that at 3 cents, the warrants are a really good deal. You can buy 300,000 warrants for $9,000 and still have $1,000 left over and nearly 3 times the upside at the shareholder. Here is an options calculator chart from CBOE:
It is showing that at $0.10 for KALY, 1090 days to expiry for the $0.155 strike, that KALY.WT should actually be worth 5.42 cents. It is better off for people to have 200,000 warrants for $10,000 than 100,000 shares for $10,000 because of the upside potential of the stock assuming 100% volatility, but buyers of the warrants today have an even better deal than that right now at 3 or 3.5 cents. With a 52-week high of over $0.50, you can argue that KALY has an even higher volatility than 100%, which would only increase the value of the warrants. You can click on the CBOE link above and put in your own parameters to figure out the fair value of the warrants.
The new set of warrants on Newstrike are HIP.WT.A, which expire in June 2023, nearly 5 years from now, and have a strike price of $1.00. We first brought up HIP.WT.A in our last post at $0.105 but it is still very cheap at $0.12. Why do we think they are such a bargain? Take a look at the value chart on Canadianwarrants.com:
This chart was updated on August 4th. At a price of $0.485 for HIP, this site gives HIP.WT.A a value of $0.32! Determining the value inherent in HIP.WT.A would be the same exercise as what we did for KALY.WT. But the difference is that we have an outside source in Canadianwarrants.com that is already giving us a fair value for these warrants, so readers don't have to rely solely on our word. KALY.WT should be up on this website soon, and will likely agree to our conclusion that these warrants are undervalued as well.
Disclosure: We are long HIP.WT.A and KALY.WT on the TSX.
Bitcoin has gone from a concept worth pennies a few years ago to worth thousands of dollars. It may appear to some who are late to the game that the opportunity to get rich is gone. However, there are still plenty of ways to make some money trading in bitcoin and other cryptocurrency. Here are some links to valuable reports and strategies:
The Cryptocurrency Codex from the Cryptocurrency Institute
Secrets To Unlimited Free Bitcoin
The Crypto-Currency Evolution eBook
Bitcoin Complete Guide for Dummies
The Bitcoin Miracle Guide
The Bitcoin Cheat Code Book
The Crpytocurrency Course
Bitcoin Investing Live
If you're interested in making money investing or trading the stock market, here are some good resources to assist you. This includes technical analysis, investing in the weed sector, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies.
Microcap Millionaires Free Video: Cheap Gold Miner Set to Soar in Fall 2017
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Top rated signals for binary options from binaryoptionsprosignals.com
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review shows how to time the market with its "Percent of X" indicator
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
Try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Top rated signals for binary options from binaryoptionsprosignals.com
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review shows how to time the market with its "Percent of X" indicator
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
Try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
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