Markets and Metals Weekly Navigator (July 5th, 2020)

marijuana - stock market - mj-stocks-26

Gold & Silver Mining Stocks Continue to Charge Ahead Along with the Market

The U.S. equity market bounced back last week after a challenging week prior, the S&P 500 was up 4%. The U.S. saw better than expected employment numbers last Thursday, the June employment rate fell to 11.1% from 13.3%.

Gold and silver mining equities continued to charge ahead this week, significantly outpacing the precious metals. Junior gold miners were up 4% on the week (NYSE:GDXJ), senior gold miners were up 3% (NYSE:GDX), and silver miners were up 2% (NYSE:SIL).

Capital 10X will be producing the next installment of its Silver Insights Series this week, identifying the drivers of the very dispersed performance in silver equities during the last bull run.

Cannabis Week in Review

Aurora Cannabis (TSX:ACB) announced the retirement of Terry Booth (previous CEO) from Board of Directors on June 29th. This is welcome news from a shareholder perspective as it allows the company to jettison all historic connections with previous management, the stock is down 86% over the last year – under-performing the marijuana ETF (TSX:HMMJ) by 24%.

Organigram (TSX:OGI) announced on July 3rd that it is laying off at least 220 employees, representing a quarter of its staff.  The company also said that it would right-size production and review its assets.

The bloom has come off the rose for OGI over the last year, the company had a great 1st half of 2019 on the back of strong operational performance. It has nearly given up all the out-performance relative to the index since, sales haven’t met expectations and operational performance has slipped.

Liberty Health Sciences (CSE:LHS) announced Fiscal 2020 financial results on June 26th, full-year revenue came in at $50 million – a 400% increase from the previous year ($10M).  Liberty trades at a large valuation discount relative to it’s U.S. cannabis peers, 3.3X Price to Sales vs. 10X for Curaleaf.

Source: YCharts

COVID-19 and Pro Sports

Capital 10X examined what the new reality for sports would be in the era of COVID-19. Dr. Copeland (Chairman of MedQuest’s Advisory Committee) outlined the 5 health guidelines that leagues should adhere to for the safe return of professional sport.

The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Capital 10X gets down to the real money business, actionable financial insights for traders and investors. We analyze company earnings, interview management teams and help teach the fundamentals of financial analysis and options trading. Our mission is to hunt for genuine 10 baggers.