The Canadian Cannabis Report - Monday, Dec. 19

For the trading week that ended December 16, my proprietary Canadian Cannabis Company Index (MCCCI) decreased by 6.3% compared to the prior week when it decreased by 25.4%. The index consists of 21 stocks, many of which are among the most widely held holdings of the 3 ETFs (MJ, CNBS, and THCX) that I consider to be a reliable barometer of the Canadian cannabis sector. MCCCI's differentiated business model is both weighted and market capitalization based because I believe that this approach best represents the current landscape of the Canadian cannabis sector. Now let us look at this week’s good, bad, and ugly stocks, shall we?

Image by Herbal Hemp from Pixabay
 

The Good

There was 1 stock that increased by more than 10%, which is my metric for inclusion in this category: RDDTF +24.4%. Radient Technologies Inc. is the 2nd lowest capitalization stock in the MCCCI and there was no news to help us understand this price rise.
 

The Bad

There were 5 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: TGODF -17.7%, DLTNF -15.6%, TRSSF -15.3%, MEDIF -13.8%, and VVCIF -12.4%. Green Organic Dutchman Holdings Ltd. has entered into a definitive agreement to merge with BZAM Cannabis.
 

The Ugly

There were 2 stocks that decreased by 20% or more, which is my metric for inclusion in this category: NEPT -38.0%, and HEXO -25.6%. As I stated last week “Neptune Wellness Solutions Inc. is especially vulnerable to further price decline going forward” and has decreased 97.6% YTD. Hexo Corp. has decreased by 97.9% since my last article.
 

Valuation Metric Review

There was a decrease of 6.25% in the “Big Four” (all of which decreased for the 2nd consecutive week) compared to the prior week when there was a decrease of 25.4%. This continued underperformance of this cohort weighs heavily on the MCCCI.
 

Recap

Only 1 of the 21 stocks in the MCCCI increased, which is another indicator of the continued froth in the sector. There was no change in the relative strength index compared to the prior week when there was also no change. Let us see how this volatile sector has performed at the same time next week, shall we?


More By This Author:

The Canadian Cannabis Report - Monday, Dec. 12
The Canadian Cannabis Report - Monday, Dec. 5
The Canadian Cannabis Report - Monday, Nov.28

Disclaimer: The information provided in this article is for general informational purposes only. 

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