In our write up from yesterday "KBEV Announces World's First Cannabis Nootropic Beverage", we recommended Koios Beverage Corp. (SNOVF) (KBEV.CN) after it closed at $0.35 in Canada on Tuesday. Let's just say it did well as we expected as it closed up 54% to $0.54. While it is so easy to make money on cannabis stocks, we might as well keep on with them with another new pick and a reiteration of an undervalued favorite. We are up to 658 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.
Centric Health Corporation (CHHHF) (CHH.TO) moved up 48% on nearly a million volume on the OTC symbol and 7.5 million in Toronto on the announcement of a strategic partnership with Canopy Growth (CGC) (WEED.TO):
TORONTO and SMITHS FALLS, ON, Sept. 5, 2018 /CNW/ - Centric Health Corporation ("Centric Health" or the "Company") (TSX:CHH) today announced that it has entered into multi-year supply and service agreements with Canopy Growth Corporation ("Canopy Growth") (TSX: WEED; NYSE: CGC) for the provision of medical cannabis. Under the agreements, Canopy Growth will be the preferred education partner and supplier of choice of medical cannabis primarily through its Spectrum Cannabis brand to Centric Health and the seniors that it serves both in long-term care and retirement residences, as well as seniors living in the community.
Spectrum Cannabis and Centric Health will work collaboratively to educate Centric Health's clinical pharmacists, as well as other healthcare partners, residents and seniors and their families, on the benefits and potential applications of medical cannabis. Centric Health's clinical pharmacists are in an ideal position to provide guidance on the safe use of medical cannabis as they are specially trained in geriatric medicine. Many seniors face significant barriers when it comes to access and knowledge around the benefits of medical cannabis but with the support of trained pharmacists and educators, the seniors that Centric Health serves and those living within the community will have the ability to receive assessments and on-going support from a pharmacist to ensure the highest degree of safety and efficacy. Centric Health's unwavering commitment to quality care and resident outcomes through their existing pharmacy operations and focused strategy of expanding service offerings to seniors in the community makes for an ideal long-term strategic partnership.
"We believe that our partnership with Centric Health will help reduce many of the existing gaps in the continuing care space by having a trusted partner at our side who can provide education, assist in policy development and, most importantly, provide clinical pharmacist oversight of medical cannabis through medication management," said Mark Zekulin, President & Co-CEO, Canopy Growth. "The continuing care space is comprised of a patient population that can greatly benefit from the therapeutic effects of medical cannabis."
Canopy Growth and Centric Health have also entered into a separate business development agreement wherein Canopy Growth has advanced funds to Centric Health to help with improved education and assistance programs. As part of the business development agreement, Centric Health issued 850,000 warrants to Canopy Growth at an exercise price of $0.25 per common share for a life of 48 months with the vesting date set at September 4, 2020.
"Our strategic relationship with Canopy Growth leverages Centric's national Specialty Pharmacy footprint and respected clinical pharmacists with their sophisticated educational platform and range of medical cannabis products, including the Spectrum Cannabis line that makes it easy for seniors to understand the strength and dosage of the medical cannabis they are using as part of their treatment program," said David Murphy, Centric Health's President and Chief Executive Officer. "The combination of Centric Health and Canopy Growth capabilities will ensure that, where a healthcare practitioner has determined medical cannabis is appropriate, seniors and home operators will have the best possible support and oversight for medical cannabis treatments."
We think that the stock mainly moved up on the attachment to CGC, rather than the generic idea of being able to provide medical marijuana to the elderly residents of its buildings. We think that the business development agreement where CGC paid money upfront in exchange for CHH's participation in education and assistance programs is key.
We are having a difficult time in deciphering exactly how CHH will make money off of this agreement and have come to the conclusion that it is likely Canopy paying CHH through increased awareness to a potentially lucrative market that may be resistant to medical marijuana. Many retired people in North America grew up with the "war on drugs" as part of their political culture. This will be a challenge to break that moral code but if CHH can do it, it will be a massive achievement for the cannabis industry at large but for these two companies specifically. CGC may be seeking the expertise of CHH to crack this lucrative market.
CHH has otherwise been struggling with stagnant growth and lack of profitability, so this agreement with CGC might be exactly what it needs to get a shot in the arm. We think that shot in the arm will come primarily from the stock performance side in the short term and business development side much later. As in other words, we will be playing the spike on the hot cannabis sector and attachment to CGC in particular, but this is not a mid nor long-term hold for us.
In terms of a medium term hold, since our article "Buying Cheap Cannabis Warrant Plays In Preparation For Fall Pop" and "The Best Way To Play Cannabis Right Now", we have been highly recommending HIP.WT.A. The warrants have risen from $0.12 to $0.26 but despite that, we have purchased more warrants on Wednesday. As of August 31, the value chart on Canadianwarrants.com has HIP.WT.A valued at $0.62:
Here is an excerpt from our write up "Explaining HIP.WT.A And Why You Want To Buy The Warrants Over Stock". The prices used in the example are out of date but it still serves its purpose of illustrating the value in HIP.WT.A as a long term leveraged security in a hot cannabis sector.
HIP.WT.A are warrants on Newstrike Brands (HIP.CN) trading in Canada. 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.
Centric Health Corporation (CHHHF) (CHH.TO) moved up 48% on nearly a million volume on the OTC symbol and 7.5 million in Toronto on the announcement of a strategic partnership with Canopy Growth (CGC) (WEED.TO):
TORONTO and SMITHS FALLS, ON, Sept. 5, 2018 /CNW/ - Centric Health Corporation ("Centric Health" or the "Company") (TSX:CHH) today announced that it has entered into multi-year supply and service agreements with Canopy Growth Corporation ("Canopy Growth") (TSX: WEED; NYSE: CGC) for the provision of medical cannabis. Under the agreements, Canopy Growth will be the preferred education partner and supplier of choice of medical cannabis primarily through its Spectrum Cannabis brand to Centric Health and the seniors that it serves both in long-term care and retirement residences, as well as seniors living in the community.
Spectrum Cannabis and Centric Health will work collaboratively to educate Centric Health's clinical pharmacists, as well as other healthcare partners, residents and seniors and their families, on the benefits and potential applications of medical cannabis. Centric Health's clinical pharmacists are in an ideal position to provide guidance on the safe use of medical cannabis as they are specially trained in geriatric medicine. Many seniors face significant barriers when it comes to access and knowledge around the benefits of medical cannabis but with the support of trained pharmacists and educators, the seniors that Centric Health serves and those living within the community will have the ability to receive assessments and on-going support from a pharmacist to ensure the highest degree of safety and efficacy. Centric Health's unwavering commitment to quality care and resident outcomes through their existing pharmacy operations and focused strategy of expanding service offerings to seniors in the community makes for an ideal long-term strategic partnership.
"We believe that our partnership with Centric Health will help reduce many of the existing gaps in the continuing care space by having a trusted partner at our side who can provide education, assist in policy development and, most importantly, provide clinical pharmacist oversight of medical cannabis through medication management," said Mark Zekulin, President & Co-CEO, Canopy Growth. "The continuing care space is comprised of a patient population that can greatly benefit from the therapeutic effects of medical cannabis."
Canopy Growth and Centric Health have also entered into a separate business development agreement wherein Canopy Growth has advanced funds to Centric Health to help with improved education and assistance programs. As part of the business development agreement, Centric Health issued 850,000 warrants to Canopy Growth at an exercise price of $0.25 per common share for a life of 48 months with the vesting date set at September 4, 2020.
"Our strategic relationship with Canopy Growth leverages Centric's national Specialty Pharmacy footprint and respected clinical pharmacists with their sophisticated educational platform and range of medical cannabis products, including the Spectrum Cannabis line that makes it easy for seniors to understand the strength and dosage of the medical cannabis they are using as part of their treatment program," said David Murphy, Centric Health's President and Chief Executive Officer. "The combination of Centric Health and Canopy Growth capabilities will ensure that, where a healthcare practitioner has determined medical cannabis is appropriate, seniors and home operators will have the best possible support and oversight for medical cannabis treatments."
We think that the stock mainly moved up on the attachment to CGC, rather than the generic idea of being able to provide medical marijuana to the elderly residents of its buildings. We think that the business development agreement where CGC paid money upfront in exchange for CHH's participation in education and assistance programs is key.
We are having a difficult time in deciphering exactly how CHH will make money off of this agreement and have come to the conclusion that it is likely Canopy paying CHH through increased awareness to a potentially lucrative market that may be resistant to medical marijuana. Many retired people in North America grew up with the "war on drugs" as part of their political culture. This will be a challenge to break that moral code but if CHH can do it, it will be a massive achievement for the cannabis industry at large but for these two companies specifically. CGC may be seeking the expertise of CHH to crack this lucrative market.
CHH has otherwise been struggling with stagnant growth and lack of profitability, so this agreement with CGC might be exactly what it needs to get a shot in the arm. We think that shot in the arm will come primarily from the stock performance side in the short term and business development side much later. As in other words, we will be playing the spike on the hot cannabis sector and attachment to CGC in particular, but this is not a mid nor long-term hold for us.
In terms of a medium term hold, since our article "Buying Cheap Cannabis Warrant Plays In Preparation For Fall Pop" and "The Best Way To Play Cannabis Right Now", we have been highly recommending HIP.WT.A. The warrants have risen from $0.12 to $0.26 but despite that, we have purchased more warrants on Wednesday. As of August 31, the value chart on Canadianwarrants.com has HIP.WT.A valued at $0.62:
Here is an excerpt from our write up "Explaining HIP.WT.A And Why You Want To Buy The Warrants Over Stock". The prices used in the example are out of date but it still serves its purpose of illustrating the value in HIP.WT.A as a long term leveraged security in a hot cannabis sector.
HIP.WT.A are warrants on Newstrike Brands (HIP.CN) trading in Canada. 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.
Disclosure: We are long HIP.WT.A and CHH
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
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.
No comments:
Post a Comment