In our write up called "Buying Cheap Cannabis Warrant Plays In Preparation For Fall Pop", we have so far been correct in calling another run in the cannabis industry. HIP.WT.A has nearly doubled for us and our followers but we think that it makes the best cannabis play out there right now and it still has much more to move. There have been some questions and misunderstandings about these warrants so we will use this write up to explain the opportunity. We have also found an extremely low-float non-cannabis stock that we think is due for a huge run. We are up to 647 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 $0.77 and the warrants at $0.205 on Wednesday. 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. The easiest way to explain this is in a chart:
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 $0.77 for $7,700 or 10,000 HIP.WT.A at $0.21 for $2,100, 20,000 warrants for $4,200 or 30,000 warrants for $6,300. In all three scenarios you would be risking less than the $7,700 you would spend on shares.
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 $0.77 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 $6,700 on the stock in this scenario but only $2,100 to $6,300 on the warrants, depending on how much you bought.
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 $0.77 has a position worth $30,000 now and cashed in $22,300 of profits. But someone who instead bought 30,000 warrants saw their $6,300 investment turn into $60,000 for a $53,700 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 $0.77 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 have a strike price of $1.75 and expire in February 2020. The higher strike price and less time value makes these warrants much more risky. HIP could double to $1.50 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 20th which is already far out of date compared to current market prices but can still be used as an illustration of relative value. At a price of $0.55 for HIP, this site gave HIP.WT.A a value of $0.39, which was 2.4x higher than the $0.16 price it was at the time. HIP.WT is also trading at a bargain as well, with a value of $0.12 versus a price of $0.06, making it undervalued by 2x. But on relative terms, HIP.WT.A is cheaper than HIP.WT. That's why HIP.WT.A is the preferred buy, though HIP.WT is by no means a bad decision. With HIP being at $0.77, HIP.WT.A would be worth much more than $0.39 once this website updates its chart.
Why does this website value HIP.WT.A at $0.39? 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 $0.21. You could buy 20,000 warrants for $7,000 instead of 10,000 shares for $7,700 and still have a more favorable outcome once HIP hits $3.00. The fact that you can buy at $0.21 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 Tel-Instrument Electronics Corp. (TIK) which we think is about to go on a huge run after releasing its Q1 2018 results ended June. We first called it on August 20th, and it has moved up a little bit - from $2.90 to $3.05 - since. TIK is valued at less than $10 million market cap. For that kind of market cap, its financial performance is what you would expect with stagnant revenues and operating losses. However, it's not the past that we are looking at when looking at a potential big spike, but the near future. TIK's management is painting a picture of the future that looks quite bright in the Q1 SEC filing released Monday evening:
"We have recently been informed by Germany that they plan to award a contract to the Company for 275 TS-4530A test sets, which should result in a multi-million dollar contract for the Company. This award is currently being protested by an unsuccessful bidder, but we hope to receive this contract within the next few months. We are also currently pursuing opportunities in Australia and other areas in the Middle East and Canada. We have just started to receive orders from the overseas markets, and we will continue to actively market our products to all of the major international customers. Our expectation is that we will significantly improve both our revenues and gross margins starting sometime in the 2019 calendar year, but because the timing of these new orders is largely out of our hands, we expect to see continued volatility in our quarterly revenues. Nonetheless, we are encouraged by the increasing activity we are seeing for both our commercial and military products."
The company already disclosed some details about the German contract last week which resulted in a huge pop in the stock price. With expectations of a significant operating improvement in 2019 and additional international orders, we expect further good news from the company coming soon.
The real key to the opportunity on TIK is that it is a small float stock that is tightly held with minimal dilution possible. Take note of this in the Q1 filing:
The stock only has less than 3.3 million shares outstanding, but more importantly has only 4 million shares authorized. That means the risk of dilution while holding it is limited to that few hundred thousand, if any at all. This is very important because many traders get caught up in dilutive financing deals that are announced overnight on these super small float plays and get badly burned. This won't happen on TIK, at least not until management seeks approval to increase the authorized share count beyond 4 million.
The other key to seeing this stock fly would be its float. From Yahoo Finance:
TIK shares are 56% held by insiders which means the float is a mere 1.3 million! One of only a handful of stocks to boast such a low float. The fact that it has a cap on the amount of shares it can issue at 4 million makes it even rarer since it will not be able to easily dilute, for instance, like what we are seeing on HMNY right now. We think that TIK can repeat its performance as a big gainer, following up its spike on the German contract news from last week.
Disclosure: We are long HIP.WT.A and TIK.
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 $0.77 and the warrants at $0.205 on Wednesday. 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. The easiest way to explain this is in a chart:
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 $0.77 for $7,700 or 10,000 HIP.WT.A at $0.21 for $2,100, 20,000 warrants for $4,200 or 30,000 warrants for $6,300. In all three scenarios you would be risking less than the $7,700 you would spend on shares.
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 $0.77 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 $6,700 on the stock in this scenario but only $2,100 to $6,300 on the warrants, depending on how much you bought.
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 $0.77 has a position worth $30,000 now and cashed in $22,300 of profits. But someone who instead bought 30,000 warrants saw their $6,300 investment turn into $60,000 for a $53,700 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 $0.77 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 have a strike price of $1.75 and expire in February 2020. The higher strike price and less time value makes these warrants much more risky. HIP could double to $1.50 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 20th which is already far out of date compared to current market prices but can still be used as an illustration of relative value. At a price of $0.55 for HIP, this site gave HIP.WT.A a value of $0.39, which was 2.4x higher than the $0.16 price it was at the time. HIP.WT is also trading at a bargain as well, with a value of $0.12 versus a price of $0.06, making it undervalued by 2x. But on relative terms, HIP.WT.A is cheaper than HIP.WT. That's why HIP.WT.A is the preferred buy, though HIP.WT is by no means a bad decision. With HIP being at $0.77, HIP.WT.A would be worth much more than $0.39 once this website updates its chart.
Why does this website value HIP.WT.A at $0.39? 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 $0.21. You could buy 20,000 warrants for $7,000 instead of 10,000 shares for $7,700 and still have a more favorable outcome once HIP hits $3.00. The fact that you can buy at $0.21 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 Tel-Instrument Electronics Corp. (TIK) which we think is about to go on a huge run after releasing its Q1 2018 results ended June. We first called it on August 20th, and it has moved up a little bit - from $2.90 to $3.05 - since. TIK is valued at less than $10 million market cap. For that kind of market cap, its financial performance is what you would expect with stagnant revenues and operating losses. However, it's not the past that we are looking at when looking at a potential big spike, but the near future. TIK's management is painting a picture of the future that looks quite bright in the Q1 SEC filing released Monday evening:
"We have recently been informed by Germany that they plan to award a contract to the Company for 275 TS-4530A test sets, which should result in a multi-million dollar contract for the Company. This award is currently being protested by an unsuccessful bidder, but we hope to receive this contract within the next few months. We are also currently pursuing opportunities in Australia and other areas in the Middle East and Canada. We have just started to receive orders from the overseas markets, and we will continue to actively market our products to all of the major international customers. Our expectation is that we will significantly improve both our revenues and gross margins starting sometime in the 2019 calendar year, but because the timing of these new orders is largely out of our hands, we expect to see continued volatility in our quarterly revenues. Nonetheless, we are encouraged by the increasing activity we are seeing for both our commercial and military products."
The company already disclosed some details about the German contract last week which resulted in a huge pop in the stock price. With expectations of a significant operating improvement in 2019 and additional international orders, we expect further good news from the company coming soon.
The real key to the opportunity on TIK is that it is a small float stock that is tightly held with minimal dilution possible. Take note of this in the Q1 filing:
The stock only has less than 3.3 million shares outstanding, but more importantly has only 4 million shares authorized. That means the risk of dilution while holding it is limited to that few hundred thousand, if any at all. This is very important because many traders get caught up in dilutive financing deals that are announced overnight on these super small float plays and get badly burned. This won't happen on TIK, at least not until management seeks approval to increase the authorized share count beyond 4 million.
The other key to seeing this stock fly would be its float. From Yahoo Finance:
TIK shares are 56% held by insiders which means the float is a mere 1.3 million! One of only a handful of stocks to boast such a low float. The fact that it has a cap on the amount of shares it can issue at 4 million makes it even rarer since it will not be able to easily dilute, for instance, like what we are seeing on HMNY right now. We think that TIK can repeat its performance as a big gainer, following up its spike on the German contract news from last week.
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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