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Thrilho
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Stocks

Postby Thrilho » Wed Nov 15, 2017 2:46 am

So disclaimer, right off the bat: I am new to this and do not claim to have any idea what I'm talking about. But there's a market that is jumping right now, and I thought I'd call some attention to it. Maybe get some people interested and maybe some of you guys make some cash. I got in a couple weeks ago and I've already tripled up.

As some of you are probably aware, Canada is set to legalize weed in mid 2018 and medical has been legal there since 2001. There are a few giants in the industry already, all of which are trying to grab big worldwide market share. The biggest players are Canopy Growth (TWMJF), Aurora (ACBFF), Aphria (APHQF), MedReleaf (MEDFF). Then there are all kinds of smaller companies who are in distribution, pharmaceuticals, nutraceuticals, and all kinds of other tiny niches. The whole industry is blowing up, with some of these big players doubling or more over the last month and some smaller guys doing even better than that.

A great resource for industry news, opinions, and misleading garbage is: reddit.com/r/weedstocks/

Providing that link and bringing awareness to the industry in general is the primary reason I wanted to post, but since I'm here I might as well provide some of my own opinion. There is virtually no revenue in these companies yet, so many of the typical financial indicators are out the window. To me, it's about estimating what a company is worth in the future vs their current market cap. Estimating that value is tough, but one way to do it would be comparing market cap for company A vs company B. Then compare their operations, strategy, etc and figure which one is undervalued.

To level set, the market leader right now is Canopy, at $2.9B market cap. Two weeks ago Canopy was at $2.1B while Aurora, Aphria and MedReleaf were bunched around $800M. Since then, the whole market has jumped but Aurora has moved into a clear second position. Aurora is now at $2.0B, Aphria is at $1.1B and MedReleaf is at $1.2B.

I liked Aurora's strategy, so I bought into them and one of their subsidiaries. It might be a little late to get value on Aurora, but maybe not on the subsidiary. So I'll just give some info on both.

Aurora (ACBFF) $5.04 stock price - $2.02B market cap - 400M shares
Two weeks ago they were at $2.20. Earlier today they hit a high of $5.45. In July of 2016 they were $.37 and basically non-existent. But they have gone all in, issuing a ton of stock to get to a ~$200M cash position that is allowing them to build their 800,000 square foot Aurora Sky facility at the Edmonton airport. This last year, they've operated with one facility at around 50,000 square feet. They say Aurora Sky should be fully functional mid-2018, with first crops starting Q1 2018.

Canopy, for comparison, has around 500,000 square feet as of now. They are planning on building a 3,000,000 square foot facility, but ground hasn't broken yet and as far as I know it's still in conceptual-land. Then have been making a number of other acquisitions to give them more. But just to level set, the industry leader currently has around 500,000 square feet.

Then Aurora has recently made some big acquisitions/partnerships. They acquired Pedanios, which gives them a distributor for Germany. Acquired a 20% stake in Cann Group, an Australian producer which has Australia's first medical cannabis license. Then on November 7, they signed a master service agreement with Radient Technologies, which has an oil extraction process that increases efficiency from 80% to 95% and reduces extraction time from hours to minutes. The Radient agreement was, I believe, a primary driver of the stock jump over the last week. It's great for Aurora and also great for....

Hempco (HMPPF) $2.28 stock price - $81M market cap - 36M shares
Hempco is an established player in the hemp industry, which agreed on 11/9 to give Aurora rights to a controlling stake in their company. Right now, their primary markets are:

1. Food products (hemp seed, protein powder)
2. Hemp fiber (clothes)
3. Nutraceuticals
4. Animal feed (just getting into it)

Which are great markets, and with a parent company that has the global reach Aurora is shooting for there's tons of potential. But based on statements from Aurora and Hempco management, it's clear that they're going to go heavy into CBDs. Which is going to be a HUGE market. There are wide ranging descriptions of the potential benefits, but some include anti-stress, anti-anxiety, anti-nausea, anti-depressant, anti-ADHD, sleep-aid, muscle relaxer, epilepsy cure, and more. I won't say what of these is true, because research has been pretty minimal so far. But it's legal in the US, I think it's going to be a very big market, and Aurora seems to have plans to get a lot of theirs from Hempco brand hemp. With the help of the Radient process.

So that's the operations side. But from the pure stock side, the big thing here is the market cap is still only $81M. They've only issued 36M shares, which is way less than most companies in the industry, and with Aurora's war chest of cash available for expansion they won't really need to issue a whole lot more. Also, I don't have the actual contract, but in the initial language on the deal with Aurora there was some kind of non-dilution agreement.

So it would make sense to me that Aurora would grow Hempco, increase the value of their stock, then issue a bunch of stock. As opposed to the Aurora strategy to date of diluting the hell of their stock to grow. Hempco just doesn't really need to do that, since they have access to Aurora's capital.

So it's possible that the value will grow by a great deal while the stock base stays the same or similar. So, for example, if their market cap grows to $300M but they don't issue any new shares their stock would be worth around $10. So that's why I put every cent I had available into Hempco at .63. They're now at $2.28 but I think the sky is the limit on them. And the market is not fully aware of the yet. Even though their stock jumped about 95% yesterday, it's only on about 300K trades. Compared to Aurora, which did 5M today.

ADDENDUM:
While I typed this, Aurora announced a proposal to Cannimed's board to acquire all Cannimed's shares. I don't feel like re-typing, but this would be a huge acquisition. Cannimed is one of the leaders in medical cannabis, at $275M market cap. They just showed a 80% quarter over quarter revenue growth and deal significantly in oils, which is what Hempco is going to produce. Aurora and Cannimed's stocks are probably going to get a big boost on the news, my guess is that the market won't fully see the impact to Hempco right away.

But aside from Aurora and Hempco, there are a bunch of other smaller guys that I'm watching but don't have fully formed opinions on. Many of them are pre-clinical pharmaceutical/nutraceutical companies that are under $1.00 or even under $.50. Pick the right one and the upside is huge. Some of the ones on my watchlist:

Ticker Price Market Cap
RVVTF $.20 $11M
NXTTF $.24 $78M
IMLFF $.59 $77M
PUFXF $.53 $23M
MYMMF $1.63 $134M
THCBF $.70 $72M
MPXEF $.51 $132M
SPRWF $1.27 $240M
RDDTF $.92 $152M (Radient Technologies, also will likely get a boost from the news)

So anyway, I just wanted to get this stuff out there so you guys could do some additional research if you want and maybe spark some conversation. The market was down today after a big run in the last week, so it may be a good time to grab piece. I've got some work to get to tonight, so I probably won't be on much to debate with anyone who finds fault in my numbers. But hope someone finds it worthwhile. Good luck to all!
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Re: Stocks

Postby jersey cubs fan » Wed Nov 15, 2017 2:49 am

I'll take an 1/8th of each, thanks.
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Thrilho
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Re: Stocks

Postby Thrilho » Wed Nov 15, 2017 3:13 am

Top notch first reply. Btw, this Cannimed deal came out of left field and my inexperienced trading brain is still trying to process the implications. In the thread below people are saying that Aurora has been pumping up their stock value so they could use it to buy Cannimed and that there could be a drop in Aurora's price.

https://www.reddit.com/r/weedstocks/com ... m-comments

So since I'm not a stock genius I'm not really going to take much of a position on what's going to happen to Aurora's or Cannimed's prices after this huge deal. But I will maintain that the additional distribution will be good for Hempco, and since they're my main horse anyway I'm just gonna be happy for the potential implications for them.
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Re: Stocks

Postby Derwood » Wed Nov 15, 2017 3:14 am

I was really hoping this was going to be a crazy person thread about Bitcoin
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Re: Stocks

Postby UK » Wed Nov 15, 2017 5:43 pm

Look at XXII - I bought it earlier this Summer and it has done well. Last year, I bought Zynerba (ZYNE) and it produced similar results in the hemp industry.
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Re: Stocks

Postby javy knows my name » Wed Nov 15, 2017 6:17 pm

This thread should be really titled "Growth Stocks"
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Re: Stocks

Postby cl smooth » Wed Nov 15, 2017 6:26 pm

Soy! Soy!

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Re: Stocks

Postby CyHawk_Cub » Wed Nov 15, 2017 6:33 pm

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Re: Stocks

Postby Banedon » Wed Nov 15, 2017 6:50 pm

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Re: Stocks

Postby Ding Dong Johnson » Wed Nov 15, 2017 8:35 pm

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Re: Stocks

Postby SpongeWorthy » Wed Nov 15, 2017 8:53 pm

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Re: Stocks

Postby SouthSideRyan » Wed Nov 15, 2017 9:37 pm

Image

Should go without saying, don't take stock advice from randoms on the internet.
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Re: Stocks

Postby Thrilho » Wed Nov 15, 2017 10:21 pm

SouthSideRyan wrote:Image

Should go without saying, don't take stock advice from randoms on the internet.

But then how will I make my commissions?!

This board has lots of functions, and one is an aggregator of information. Same with that sub reddit I linked. Of course nobody should take anything some random guy says and put a bunch of money on it sight unseen. But UK says "hey, check out XXII" and I add it to my watch list and then do a whole bunch of research to decide if I want to do anything with it.

Also, aside from the investment aspect it's been fun watching this market. There's craziness happening at all times and big price swings just about every day recently. I've always liked to follow minor leaguers, do research, pick my horses and watch the results roll in. Now all the good minor leaguers are up and it's winter so I'm trying to find a new hobby. This stock picking seems like a fun one, so I thought I'd throw a thread up and see what happens.

As to idea of following the companies I pushed, my main one, Hempco, fell 22% today to end at 1.75. But as with the industry in general, I'm in hold mode and not sweating the ups and downs. Hempco jumped from .60 to 2.25 in two weeks so it seems like a correction was coming. But I still think it's going way higher than 2.25 in the long term. We'll see though. Either way, it's fun having something to root for on a daily basis when baseball is out.
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Re: Stocks

Postby CubInOK » Thu Nov 16, 2017 1:57 am

SouthSideRyan wrote:Image

Should go without saying, don't take stock advice from randoms on the internet.

Which of the mentioned companies does Thrillho own and when will they turn into Enron?
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Re: Stocks

Postby CubinNY » Thu Nov 16, 2017 2:40 am

The stock market jargon frightens me. I would love to be in on making trades and figuring out horsefeathers, but I just give my money to William Blair for retirement and forget about it.
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Re: Stocks

Postby SouthSideRyan » Thu Nov 16, 2017 2:57 am

Turns out William Blair is just a guy CubinNY knows who claims to have an emu farm in Utica.
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Re: Stocks

Postby Sammy Sofa » Thu Nov 16, 2017 3:09 am

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Re: Stocks

Postby Thrilho » Thu Nov 16, 2017 3:26 am

CubInOK wrote:
SouthSideRyan wrote:Image

Should go without saying, don't take stock advice from randoms on the internet.

Which of the mentioned companies does Thrillho own and when will they turn into Enron?

Image
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Re: Stocks

Postby CubinNY » Thu Nov 16, 2017 1:48 pm

SouthSideRyan wrote:Turns out William Blair is just a guy CubinNY knows who claims to have an emu farm in Utica.

William has moved on to Bison and Wagyu leasing. He told me it’s a can’t miss.
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Re: Stocks

Postby biittner77 » Thu Nov 16, 2017 2:02 pm

This sounds like the plot of the movie Boiler Room. They used to call it a stock pool back in the days of JP Morgan before there were regulations. Now they call it a pump & dump.
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Re: Stocks

Postby Thrilho » Thu Nov 16, 2017 3:05 pm

biittner77 wrote:This sounds like the plot of the movie Boiler Room. They used to call it a stock pool back in the days of JP Morgan before there were regulations. Now they call it a pump & dump.

The Canadian weed stock industry in general or the companies I cited? That's been common response about Aurora and Hempco but in that movie the company was just a shell with no profit potential. You can dispute that these are the companies that are going to reap the profits, but the worldwide weed/oil/CBD/hemp market seems like a pretty big pie.
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Re: Stocks

Postby Thurman Merman » Sun Nov 19, 2017 4:50 am

So im getting a bit concerned that the market is going to see a correction in the near future. Maybe unfounded, but my worry is that its going to be another large one like we had 10 years ago. I dont really know much about stocks or the market, but I dont really want to lose half my 401k if i can avoid it. I know conventional wisdom would say to just keep my money in the market and ride it out, as any immediate losses will be made back with gains in the long run, but is there any merit to switching over to something much more stable for the next year or so in case the market crashes, and if it does, then switch it back to really lock in some gains? Obviously i cannot predict when the market would crash (hell, the horsefeathers happening now could be starting a chain that results in a crash 10 years from now), but im just nervous with all these market gains seemingly predicated on this tax bill giving corporations lots of money. Thoughts?
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Re: Stocks

Postby Enn Tea » Sun Nov 19, 2017 2:09 pm

Groupon apparently has a horsefeathers ton of cash, no debt, and is looking like a good cheap stock to jump in on. I bought some for 5.20/piece about a week ago and its jumped to 5.47 since.
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Re: Stocks

Postby UK » Sun Nov 19, 2017 2:22 pm

Thurman Merman wrote:So im getting a bit concerned that the market is going to see a correction in the near future. Maybe unfounded, but my worry is that its going to be another large one like we had 10 years ago. I dont really know much about stocks or the market, but I dont really want to lose half my 401k if i can avoid it. I know conventional wisdom would say to just keep my money in the market and ride it out, as any immediate losses will be made back with gains in the long run, but is there any merit to switching over to something much more stable for the next year or so in case the market crashes, and if it does, then switch it back to really lock in some gains? Obviously i cannot predict when the market would crash (hell, the horsefeathers happening now could be starting a chain that results in a crash 10 years from now), but im just nervous with all these market gains seemingly predicated on this tax bill giving corporations lots of money. Thoughts?


Yes, it's largely a bubble based on speculation of a GOP tax plan. If this tax plan fails to pass the Senate, the market will drop to pre Trump election levels.

It's still a bullish market teetering on a chicken little panic.

I think a correction will take place in the next 500 days.
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Re: Stocks

Postby Enn Tea » Mon Nov 20, 2017 7:39 pm

P.S. Square (SQ) has made me so much money that I kinda feel bad about it, and its still going strong.
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