Since our write up two weeks ago "Buying Cheap Cannabis Warrant Plays In Preparation For Fall Pop", HIP.WT.A has more than doubled for us and our followers to $0.28. We think that these warrants are still the best cannabis play out there right now and has much more to move. Another low-float gold area play has been brought to our attention and we think it is set to run further. We are up to 650 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.
HIP.WT.A are warrants on Newstrike Brands (HIP.CN) trading in Canada. The stock closed at $0.80 along with the warrants at $0.28 on Monday. The warrants came about from a financing that closed in June:
"TORONTO, June 19, 2018 (GLOBE NEWSWIRE) -- Newstrike Resources Ltd. (TSXV:HIP) (“Newstrike” or the “Company”) is pleased to announce that it has closed its previously announced short form prospectus offering on a bought deal basis, including the full exercise of the over-allotment option. A total of 69,000,000 units of the Company (“Units”) were sold at a price of $0.75 per Unit (the “Issue Price”), for aggregate gross proceeds to the Company of $51,750,000 (the “Offering”).
Each Unit is comprised of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant is exercisable to acquire one Common Share at an exercise price of $1.00 per share, subject to adjustment in certain events, until June 19, 2023."
HIP.WT.A has a strike price of $1.00 on HIP and expires in June 2023. That means if you hold the warrants, you have the right to buy HIP at $1.00 any time between now and nearly 5 years from now by exercising them. Since they trade on the open market, you can always sell them at any time before then too, and it is usually the preferable move because of time value. HIP is less than $1.00 now, so HIP.WT.A's value is in the ability to spend less money to gain a position in HIP in hopes that it does go up well over $1.00 within the next few years.
In our write up "Explaining HIP.WT.A And Why You Want To Buy The Warrants Over Stock", HIP was at $0.77 and HIP.WT.A was at $0.205. Since then, the stock has increased 4% but the warrants 37%, so the advantage of buying the warrants over the stock is closing, but it is still there. The easiest way to explain this is in a chart, which we have updated from the one we made in the previous report:
Here are the choices in our example, just to make the math clean and easy to follow. You can either buy 10,000 HIP shares at $0.80 for $8,000 or 10,000 HIP.WT.A at $0.28 for $2,800, 20,000 warrants for $5,600 or 30,000 warrants for $8,400. Previously, in all three scenarios you would have been risking less than the money you would spend on shares, but since HIP.WT.A has outperformed the stock, 30,000 warrants cost more than 10,000 shares now (but may still be worth it).
HIP is a risky stock, very much an all-or-nothing play. We think that five years from now it will either be much higher than $0.80 or a failed investment, and that most people interested in the stock will feel the same.
Looking at the chart, if HIP becomes a complete dud and goes to $0.10, your warrants are worthless. But the shares also took a big hit and because you risked less money on the warrants, you lost less money overall. You would lose $7,000 on the stock in this scenario but only $2,800 to $5,600 on 10,000 to 20,000 warrants. If you purchased 30,000 warrants, you would have lost $8,400 overall.
Now let's look at the other extreme. Let's say HIP is a success and goes to $3.00 (and keep in mind it was higher than this price earlier this year on hype). Someone who bought 10,000 shares at $0.80 has a position worth $30,000 now and cashed in $22,000 of profits. But someone who instead bought 30,000 warrants saw their $8,400 investment turn into $60,000 for a $51,600 profit. You either have the choice to exercise the warrants, where you pay $30,000 to buy 30,000 shares and immediately sell them for $90,000 or sell HIP.WT.A on the open market where it should be worth at least the intrinsic value of the warrants ($3 less $1 strike) plus maybe a few cents time value depending on how many years are left on the warrants.
Why do you want to buy HIP.WT.A instead of HIP? Simple. You have the opportunity to risk LESS money for GREATER upside. The caveat to this is in the middle of the chart. If HIP stays at $0.80 or goes only to $1.00, the shares make some money but the warrants get wiped out. But keep in mind that you have nearly FIVE YEARS for this position. That is a long time and any investor should assume that HIP is either a $3.00+ or $0.10 stock by then. And if by next year you decide you don't like HIP, there is still plenty of time to sell the warrants for some value as they will still have 3-4 years time left and someone else will pay for that gamble.
There is also HIP.WT. We actually traded these warrants with success earlier in the year. See our write up "Cannabis is on the Rise Again". The difference between HIP.WT.A and HIP.WT is the terms of the warrants. HIP.WT has a strike price of $1.75 and expires in February 2020. The higher strike price and less time value makes these warrants much more risky. HIP could double to $1.60 in the next two years and both shareholders and HIP.WT.A holders make good money but HIP.WT holders get wiped out. Otherwise the same trading strategy as presented in the above chart applies but with the $1.75 strike price instead of $1.00. We think it is best to buy and hold HIP.WT.A until HIP hits around $1.20 and then HIP.WT starts to make more sense as the leveraged upside buy.
Take a look at the value chart on Canadianwarrants.com:
This chart was updated on August 24th. At a price of $0.76 for HIP, this site gave HIP.WT.A a value of $0.59, which was 2.5x higher than the $0.235 price it was at the time, and still 2.1x higher than HIP.WT.A's $0.28 close on Monday (with HIP 4 cents higher). HIP.WT is also trading at a bargain, with a value of $0.24 versus a price of $0.085 at the time, making it undervalued by 2.8x or 2.5x its close of $0.095 on Monday. Last week, HIP.WT.A was relatively cheaper than HIP.WT, but that has since flipped thanks to the volatile and rising stock price. We still think HIP.WT.A is the better warrant to play right now because its strike price is closer to being in-the-money, making its vega higher, but that can change if HIP rises well above $1.00. Either one of these warrants will make holders a lot of money on less money risked than holding HIP shares should the stock price continue to move quickly like it has for the latter half of August.
Why does this website value HIP.WT.A at $0.59? Because that's how much the time value should be worth with five years left for the opportunity. Imagine our chart above but if HIP.WT.A was trading at $0.35 instead of $0.28. You could buy 20,000 warrants for $7,000 instead of 10,000 shares for $8,000 and still have a more favorable outcome once HIP hits $3.00. The fact that you can buy at $0.28 instead and have an even better leveraging opportunity than what should exist should be considered a bonus that bulls on HIP cannot not pass up in our opinion.
Another stock to pay close attention to is BTU Metals Corp. (BTU.CN), which popped over 100% on Friday after announcing that it acquired the Dixie Halo Property which is contiguous to Great Bear’s Dixie Project in the Red Lake District in Ontario, Canada:
"Vancouver, British Columbia (FSCwire) - BTU METALS CORP. (“BTU” or the “Company”) (BTU-TSX:V) pleased to announce that the Company has acquired 10 claims comprising 85 units (1,514 hectares) adjoining the northern and eastern boundaries of Great Bear Resources Corp.’s (GBR – TSX:V) Dixie Project located in the Red Lake District of Ontario. Great Bear recently reported a high-grade discovery in drill core assaying 16.35 meters of 26.91 g/t gold and 7 meters of 44.47 g/t gold in two holes on the “Hinge Zone” at the Great Bear’s Dixie Project (see PR dated August 22, 2018).
The Dixie Halo property wraps around the north-eastern and eastern portions of the Great Bear’s Dixie Project. The northwestern portion of the Dixie Halo property is approximately 2.3 kilometers northeast of Great Bear’s “North West Step-Out” target and approximately 4.5 kilometers northeast of the “Hinge Zone”. Portions of the Dixie Halo property were actively explored as recently as 2008 (Trueclaim Resources Inc.-Assessment Report # 20006619) with two drill holes located within 250 meters of the Dixie Halo property boundary. A complete review of the assessment files will be initiated immediately."
Disclosure: We are long HIP.WT.A and BTU.
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
HIP.WT.A are warrants on Newstrike Brands (HIP.CN) trading in Canada. The stock closed at $0.80 along with the warrants at $0.28 on Monday. The warrants came about from a financing that closed in June:
"TORONTO, June 19, 2018 (GLOBE NEWSWIRE) -- Newstrike Resources Ltd. (TSXV:HIP) (“Newstrike” or the “Company”) is pleased to announce that it has closed its previously announced short form prospectus offering on a bought deal basis, including the full exercise of the over-allotment option. A total of 69,000,000 units of the Company (“Units”) were sold at a price of $0.75 per Unit (the “Issue Price”), for aggregate gross proceeds to the Company of $51,750,000 (the “Offering”).
Each Unit is comprised of one common share of the Company (a “Common Share”) and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each Warrant is exercisable to acquire one Common Share at an exercise price of $1.00 per share, subject to adjustment in certain events, until June 19, 2023."
HIP.WT.A has a strike price of $1.00 on HIP and expires in June 2023. That means if you hold the warrants, you have the right to buy HIP at $1.00 any time between now and nearly 5 years from now by exercising them. Since they trade on the open market, you can always sell them at any time before then too, and it is usually the preferable move because of time value. HIP is less than $1.00 now, so HIP.WT.A's value is in the ability to spend less money to gain a position in HIP in hopes that it does go up well over $1.00 within the next few years.
In our write up "Explaining HIP.WT.A And Why You Want To Buy The Warrants Over Stock", HIP was at $0.77 and HIP.WT.A was at $0.205. Since then, the stock has increased 4% but the warrants 37%, so the advantage of buying the warrants over the stock is closing, but it is still there. The easiest way to explain this is in a chart, which we have updated from the one we made in the previous report:
Here are the choices in our example, just to make the math clean and easy to follow. You can either buy 10,000 HIP shares at $0.80 for $8,000 or 10,000 HIP.WT.A at $0.28 for $2,800, 20,000 warrants for $5,600 or 30,000 warrants for $8,400. Previously, in all three scenarios you would have been risking less than the money you would spend on shares, but since HIP.WT.A has outperformed the stock, 30,000 warrants cost more than 10,000 shares now (but may still be worth it).
HIP is a risky stock, very much an all-or-nothing play. We think that five years from now it will either be much higher than $0.80 or a failed investment, and that most people interested in the stock will feel the same.
Looking at the chart, if HIP becomes a complete dud and goes to $0.10, your warrants are worthless. But the shares also took a big hit and because you risked less money on the warrants, you lost less money overall. You would lose $7,000 on the stock in this scenario but only $2,800 to $5,600 on 10,000 to 20,000 warrants. If you purchased 30,000 warrants, you would have lost $8,400 overall.
Now let's look at the other extreme. Let's say HIP is a success and goes to $3.00 (and keep in mind it was higher than this price earlier this year on hype). Someone who bought 10,000 shares at $0.80 has a position worth $30,000 now and cashed in $22,000 of profits. But someone who instead bought 30,000 warrants saw their $8,400 investment turn into $60,000 for a $51,600 profit. You either have the choice to exercise the warrants, where you pay $30,000 to buy 30,000 shares and immediately sell them for $90,000 or sell HIP.WT.A on the open market where it should be worth at least the intrinsic value of the warrants ($3 less $1 strike) plus maybe a few cents time value depending on how many years are left on the warrants.
Why do you want to buy HIP.WT.A instead of HIP? Simple. You have the opportunity to risk LESS money for GREATER upside. The caveat to this is in the middle of the chart. If HIP stays at $0.80 or goes only to $1.00, the shares make some money but the warrants get wiped out. But keep in mind that you have nearly FIVE YEARS for this position. That is a long time and any investor should assume that HIP is either a $3.00+ or $0.10 stock by then. And if by next year you decide you don't like HIP, there is still plenty of time to sell the warrants for some value as they will still have 3-4 years time left and someone else will pay for that gamble.
There is also HIP.WT. We actually traded these warrants with success earlier in the year. See our write up "Cannabis is on the Rise Again". The difference between HIP.WT.A and HIP.WT is the terms of the warrants. HIP.WT has a strike price of $1.75 and expires in February 2020. The higher strike price and less time value makes these warrants much more risky. HIP could double to $1.60 in the next two years and both shareholders and HIP.WT.A holders make good money but HIP.WT holders get wiped out. Otherwise the same trading strategy as presented in the above chart applies but with the $1.75 strike price instead of $1.00. We think it is best to buy and hold HIP.WT.A until HIP hits around $1.20 and then HIP.WT starts to make more sense as the leveraged upside buy.
Take a look at the value chart on Canadianwarrants.com:
This chart was updated on August 24th. At a price of $0.76 for HIP, this site gave HIP.WT.A a value of $0.59, which was 2.5x higher than the $0.235 price it was at the time, and still 2.1x higher than HIP.WT.A's $0.28 close on Monday (with HIP 4 cents higher). HIP.WT is also trading at a bargain, with a value of $0.24 versus a price of $0.085 at the time, making it undervalued by 2.8x or 2.5x its close of $0.095 on Monday. Last week, HIP.WT.A was relatively cheaper than HIP.WT, but that has since flipped thanks to the volatile and rising stock price. We still think HIP.WT.A is the better warrant to play right now because its strike price is closer to being in-the-money, making its vega higher, but that can change if HIP rises well above $1.00. Either one of these warrants will make holders a lot of money on less money risked than holding HIP shares should the stock price continue to move quickly like it has for the latter half of August.
Why does this website value HIP.WT.A at $0.59? Because that's how much the time value should be worth with five years left for the opportunity. Imagine our chart above but if HIP.WT.A was trading at $0.35 instead of $0.28. You could buy 20,000 warrants for $7,000 instead of 10,000 shares for $8,000 and still have a more favorable outcome once HIP hits $3.00. The fact that you can buy at $0.28 instead and have an even better leveraging opportunity than what should exist should be considered a bonus that bulls on HIP cannot not pass up in our opinion.
Another stock to pay close attention to is BTU Metals Corp. (BTU.CN), which popped over 100% on Friday after announcing that it acquired the Dixie Halo Property which is contiguous to Great Bear’s Dixie Project in the Red Lake District in Ontario, Canada:
"Vancouver, British Columbia (FSCwire) - BTU METALS CORP. (“BTU” or the “Company”) (BTU-TSX:V) pleased to announce that the Company has acquired 10 claims comprising 85 units (1,514 hectares) adjoining the northern and eastern boundaries of Great Bear Resources Corp.’s (GBR – TSX:V) Dixie Project located in the Red Lake District of Ontario. Great Bear recently reported a high-grade discovery in drill core assaying 16.35 meters of 26.91 g/t gold and 7 meters of 44.47 g/t gold in two holes on the “Hinge Zone” at the Great Bear’s Dixie Project (see PR dated August 22, 2018).
The Dixie Halo property wraps around the north-eastern and eastern portions of the Great Bear’s Dixie Project. The northwestern portion of the Dixie Halo property is approximately 2.3 kilometers northeast of Great Bear’s “North West Step-Out” target and approximately 4.5 kilometers northeast of the “Hinge Zone”. Portions of the Dixie Halo property were actively explored as recently as 2008 (Trueclaim Resources Inc.-Assessment Report # 20006619) with two drill holes located within 250 meters of the Dixie Halo property boundary. A complete review of the assessment files will be initiated immediately."
Great Bear (GBR.CN) has jumped from $0.72 to $1.95 in the week since the discovery was made on its property. The Sokoman Iron Corp (SIC.CN) area plays didn't have much staying power as SIC has dropped 50% from its high, so keep that in mind when trading these types of stocks. However, the move on GBR appears to be stronger and the trading on BTU looks really good. BTU jumped 114% on Friday, but closed at its day low of $0.075. After dropping to $0.06 in early trading on Monday, it perked up considerably in the afternoon to close at $0.08. We think it will challenge and break through that $0.105 high that it made on Friday. It has 36.5 million shares outstanding for a $3 million market cap compared to a $47 million market cap for GBR. It did a recent financing at $0.06, but those shares are on lock-up until October. This is not a typical "value trade" that we like, but rather a favorable chart setup on a stock that could move a lot on hype.
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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