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S&P/TSX Composite Index Today: Aurora Cannabis Inc, Canopy Growth and Aphria Inc Dominate – Again

— James West

Aurora Cannabis Inc (TSE:ACB) (OTCQB:ACBFF) (FRA:21P), Canopy Growth Corporation (TSE:WEED) (OTCMKTS:TWMJF) (FRA:11L1) and Aphria Inc (TSE:APH) (OTCMKTS:APHQF) (FRA:10E) once again combined to drive the S&P/TSX Composite Index (INDEXTSI:OSPTX) higher on Monday, March 12. Canopy saw the biggest gain on the day, having notched an increase  of $1.54 a share to close up 5 percent at $32.49. Aurora added 2.8 percent on 7.3 million shares traded, while Aphria cranked through 4.2 million shares traded, adding $0.30 on the day to close at $14.29.

Aurora pressed higher on news that it had been added to the S&P TSX Composite Index, while Aphria and Canopy didn’t put out any news to justify the push today. On a side note, Aphria CEO Vic Neufeld was announced as the new chairman of the board of Scythian Biosciences Inc (CVE:SCYB) (OTCMKTS:SCCYF) (FRA:9SB), while the company announced a 4:1 forward split of its stock, which it says it will do to “encourage liquidity”.

The cannabis sector has been somewhat volatile since reaching its highest valuation in early January, and after a correction to an average of about 35%, in late January, has been slowly making its way higher, led by the unicorn stocks mentioned above.

Cronos Group Inc (CVE:CRON) (NASDAQ:CRON) (FRA:7CI) meanwhile, has seen its liquidity increased dramatically since listing on NASDAQ last week, with its U.S. listing now generating 3 times as much volume on NASDAQ as it does on its TSX Venture listing. NASDAQ, as Cronos may soon discover, is inundated with short strategists who thrive on liquid companies with no major institutional holdings that are obliged to raise capital continuously to expand operations.

The S&P TSX Venture Composite index meanwhile saw almost nothing in the way of significant action from any marijuana companies with the sole exception of Cannabis Wheaton Income Corp, which rose $0.04 on volume of 1.4 million shares traded.

Increasingly, the trend in 2018 is for the billion dollar companies to flock to NASDAQ and the Toronto senior board, with both Canopy Growth and Aurora indicating they would seek a NASDAQ listing, while stealthy CannTrust Holdings Inc snuck quietly onto the TSX senior board with little fanfare. CannTrust has a market cap of just $774 million as of the end of day today, and may be the next green unicorn, if the TSX effect on uplisting junior ACMPR growers remains intact.

 

 

James West

James West

Editor and Publisher

I employ a Capital Efficiency Model that dictates money should never be exposed for longer than is absolutely necessary to the possibility of being lost. Thus, I routinely sell half my position when a stock doubles from my entry price, and I sell stocks that lose 20%, unless there are...
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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

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