Capital 10X – Pot Stocks Weekly Performance Wrap (November 15th, 2019)

Below is a comparison of the biggest winners and losers in PotStocks this week, grouped by market cap and country. See whether your picks are outperforming or if you need to rebalance your portfolio.

The High Level

It was a solid week for PotStocks across the sector, led by multiple earnings beats coming from the industry leaders. The HMMJ was up a solid 5.4% during a week that seemed to signal the cannabis industry found its bottom and finally rebounded. And then I woke up.

This week was about as disappointing as investors could have expected almost straight across the board. Every group was down on the week, with large-cap Canadian LPs leading the way.

Supposed industry bellwether Canopy Growth led the way, missing analysts’ estimates by 27%, while losses were twice as high as expected. While some write-downs were taken, we don’t believe the bandaid has been pulled off yet.

Organigram fell the most at 40%. While revenue was down 34% quarter-over-quarter, investors punished the stock more than others. Perhaps they aren’t as wed to this name as others or it’s just too boring that it doesn’t get the same hype as others.

Supreme was also down on the week with a substantial (but somewhat justified) revenue drop in Q1 2020, although numbers were solid. They also managed to secure a $90 million credit facility, which is surprising given the liquidity taps have dried up.

Aurora’s revenues actually shrank quart-over-quarter, leading to a shrinking stock price as well. The company is also facing a cash crunch, and with over a billion shares already outstanding, things are looking grim. That’s before you consider possible write-downs.

The Green Organic Dutchman was down 33% on the week as well. While they made announcements around securing funding, earnings clearly left investors wanting more growth.

Surprisingly, Zenabis was flat on the week. Compared to peers that’s an excellent performance, however, it’s unclear why. Earnings painted a tough road ahead with the company seemingly required to walk a tight rope to escape their liquidity crunch.

MediPharm Labs also reported earnings and had solid numbers. However, they were caught in a bear market and fell 23% this week. However, they are still up 133% on the year.

Pot Stocks Group Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Large-Cap Weekly Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Large-Cap YTD Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Mid-Cap Weekly Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Mid-Cap YTD Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Small-Cap Weekly Performance

Source: Yahoo Finance.

Canadian Pot Stocks – Small-Cap YTD Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Large-Cap Weekly Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Large-Cap YTD Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Mid-Cap Weekly Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Mid-Cap YTD Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Small-Cap Weekly Performance

Source: Yahoo Finance.

U.S. Pot Stocks – Small-Cap YTD Performance

Source: Yahoo Finance.

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.

Evan Veryard
Evan Veryard has a Bachelor's of Chemical Engineering from McGill University and a MaSc. of Chemical Engineering from RMC. He has over 6 years of research experience focusing on industrial materials. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.

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