Image source: UnsplashFor the trading week ended May 3, 2024, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 8.6% compared to the prior week when it decreased by 2.1%. The index consists of 14 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?The GoodThere were 1 stock that increased by more than 10%, which is my metric for inclusion in this category: TLRY +14.8%. Tilray Brands, Inc. increased 14.8% although on 5/4/24 BTIG stated there was a ‘murky’ road ahead for cannabis reclassification. Readers may recall I expressed this same sentiment in the prior week’s report. TLRY has a beta of 2.5 which means continual volatility is likely going forward, which will delight option traders.The BadThere were no stocks that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category.The UglyThere was 1 stock that decreased by 20% or more, which is my metric for inclusion in this category: NEPTF -41.6%. In my view Neptune Wellness Solutions Inc. is terminally unwell, and the consummate “dead stock walking” which has a petty cash market capitalization of $173K.Valuation Metric ReviewThere was a 13.3 % increase in the “Big 4” (all of which increased) compared to the prior week when there was a 1.8% increase (initially incorrectly reported as a 1.4% increase).RecapThere was a 2.7% increase in the relative strength index compared to the prior week when there was a 1.4% increase. 6 of the 14 MCCCI stocks increased. The bifurcation of the MCCCI obtains, as all “Big 4” stocks increased as opposed to 2 of the 10 others. In a future report, I will identify which MCCCI stocks are on the “danger list” and may not survive 2024.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, April 29
The Canadian Cannabis Report – Monday, April 22
The Canadian Cannabis Report – Monday, April 15