For the trading week ended January 28, 2022, there was a de minimis decrease of 0.09% in my proprietary Canadian Cannabis Company Index (MCCCI) compared to the prior week when there was a decrease of 13.6%. The index consists of 22 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.

Image by Herbal Hemp from Pixabay

The 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.

The Good

There were no stocks that increased by more than 10% which is my metric for inclusion in this category.

The Bad

There were 3 stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category: ROMJF -16.7%, ACB -12.3% and NXTTF -10.7%. There was no news regarding the sharp decline of Rubicon Organics Inc. Aurora Cannabis Inc. is a repeater from last week’s report and as I said then ACB “has a sea of red ink to deal with in addition to the general malaise of the sector.”

The Ugly

There was 1 stock that decreased by 20% or more, which is my metric for inclusion in this category: NEPT -21.2%. Neptune Wellness Solutions Inc. to me is an enigma wrapped in a puzzle.

Valuation Metric Review

There was a de minimis decrease of 0.07% in the “Big Four” compared to the prior week when there was a precipitous decrease of 14.6%. Is equilibrium back after a 1-week hiatus?

Recap

3 of the 22 stocks in the portfolio increased, an indication of a tenuous sector signaled by my “new” metric. There was a decrease of 11.9% in the relative strength index compared to the prior week when there was a decrease of 4.5%. Let us see how this volatile sector has performed at the same time next week shall we?