Sunday 22 November 2020

JUPW: Recent Tight-Float IPO On Verge Of A Major Run

Jupiter Wellness (JUPW)
Current Price: $4.10
Target Price: $7.50
Upside Potential: 83%
Market Cap: $37 million
Shares Outstanding: 9 million
Float: 1.5 million

We have put out a bullish trade alert on Jupiter Wellness (JUPW).  JUPW was a recent IPO that has been extremely thinly traded so far. Considering its tight float and thin trading, any kind of volume spike could lead it to have a massive run, with last Tuesday's move from $4.19 to as high as $5.42 on 120,000 volume being just a small taste of what can happen. We are up to 941 followers despite not giving out a lot of alerts, a fact that we think is indicative of a successful, 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 as well as follow our Small Caps, Big Gains blog where we put up our Canadian picks. You can also follow us on Twitter @StockTradePicks which has over 4,700 followers.

JUPW closed its IPO financing just a couple of weeks ago, raising $7 million at $7.50. That makes anything in the $4's a steal as the institutional investors behind the deal will likely want to see it push above the $7.50 raise. Since there is only 1.5 million shares in the float, this would be relatively easy to do. The company has released a series of news items, with the most recent being an endorsement from golfer Ernie Els:

Els commented, "I've been using CaniSun sunscreen and I love the product. This is an easy endorsement for someone who is in the sun as much as I am."

Brian John, CEO of Jupiter Wellness added, "We're excited that Ernie loves Canisun Suncare Products. His endorsement of our brand is highly impactful and validates our efforts to create top-notch products that consumers love."

JUPW is a CBD wellness company. Endorsements of this type are going to be a major boost to product sales, especially in the target market of older consumers who might otherwise be less aware or accepting of CBD products. Every additional news release increases the chance of a major spike as something will suddenly catch on and the day traders pile in the pre-market. While our fair target is $7.50, we can't rule out one of those 100%-500% pre-market spikes that you see a couple of times a week on a thinly traded stock with a small float with a similar profile to JUPW.

Given that the Democrats now have control over the White House pending finalized election results, the cannabis sector could become bullish on expectations of favorable legislation. JUPW has some decent numbers for a startup and with endorsement deals like with Els, these revenue numbers should continue to grow: 


JUPW achieved $178,000 in revenue with a net loss of $607,000 in Q3. That's impressive revenue growth of 3,400% from startup status in 2019. As the net loss was $607,000, that $7 million the company just raised is going to last it for a while. Especially on this revenue growth path where gross margin will offset more and more of the operating costs. The company could possibly attain positive operating cash flows before it burns through the $7 million IPO and might not need to raise again.

Disclosure: We are long JUPW


What's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.

There are also some good books available on microcap stocks and day trading such as:

Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)

The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks

Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of

How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology

How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology

A Beginner's Guide to Day Trading Online (2nd edition)

Stock Investing for Beginners: Marijuana Stocks


Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:

The dividend stock report from dividendstocksonline.com

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