Seeking Alpha's Most Followed Marijuana Stocks: 2 Winners And 11 Losers, Post-Election

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Includes: BLOZF, CANN, CBIS, CVSI, ERBB, GRNH, INSY, MCIG, MJNA, NGBL, PHOT, PMCB, TRTC, VPCO
by: Anthony Cataldo

Summary

An equal-weighted portfolio of the N=13 Seeking Alpha most followed marijuana stocks, purchased on Election Day, has already lost 34% of its value.

The market for recreational marijuana increased on November 8, 2016, and more than 20% of the U.S. population, now, has legal access to pot.

Even with a tripling of the U.S. market, a post-election portfolio has only n=2 winners [15%] and n=11 losers [85%].

I have located data in the APPENDIX, to reduce “noise” in the body of the article; tax loss selling should begin after Thanksgiving and accelerate through year-end.

It is still too early to initiate a long-term buy-and-hold position in these stocks or in this growing sector or segment of the economy.

Disclosure: I have sold the vast majority of my position in Cannabix Technologies (OTCPK:BLOZF), retaining only 1,000 shares. The relevant SA Instablog, providing my motivation for exiting this position, is located here. With this single exception, I do not hold any marijuana stocks. However, I am very excited about the opportunities to initiate positions in this sector or segment of the economy, at or near calendar year-end.

My earlier SA articles addressed the "most followed" marijuana stocks. The most recent is located here.

If you invested $100 in each of the N=13 marijuana stocks most followed by SA readers, your $1,300 investment is, now, worth $856.17, for a 34% holding loss in 9 trading days. This measure ignores brokerage commissions. There remains no compelling reason to initiate a long-term buy-and-hold position in any of these stocks. I recommend that you wait until the last week in December.

Focusing on the same N=13 marijuana stocks, the below graphic was developed. The detailed data is located in the APPENDIX for reference. It is excluded from the body of this article to save you time and reduce "noise."

Note that only n=2 of the stocks have enjoyed an appreciation of value since the November 8, 2016 elections and decriminalization ballot measures. The n=2 winners are examined below the graphic. While I like being 85% correct, I seek to examine and investigate why my prediction was not correct in these n=2 of N=13 cases.

PharmaCyte Biotech Inc. - A Post-Election Day Winner

Below is a 9 trading day chart for PharmaCyte Biotech:

Click to enlarge

News or Events to Explain Increase in Price-per-Share

The November 14 and November 16 headlines, both, resulted in very apparent increases in the price-per-share for PharmaCyte Biotech stock, as follows:

Click to enlarge

The above market reactions to news are so very apparent, it is not even necessary to perform any form of statistical analysis for this penny stock. Still, with a 52-week range of $0.023 through $0.0985 per share, and trading at only $0.0527 per share, I would expect this stock to decline as we approach calendar year-end tax loss selling. The exception would require a barrage of additional positive news releases and headlines between now and calendar year- end. Keep in mind, those buying at the 52-week high of $0.0985 are calendar year-end "bag holders," and will consider selling to offset taxable gains and even generate tax losses for 2016.

My earlier opinion with respect to Insys Therapeutics continues to apply:

PharmaCyte Biotech Inc. Summary: PharmaCyte Biotech's stock did not peak on or about the November 2012 election event date. PharmaCyte Biotech's stock peaked on or about the November 2014 election event date. PharmaCyte Biotech's stock declined prior to the calendar year-end tax-loss selling. PharmaCyte Biotech is a "penny" stock. Sell PharmaCyte Biotech in November and repurchase on December 31st, if you like the firm and stock for a long-term buy-and-hold.

Insys Therapeutics Inc. - A Post-Election Day Winner

Below is a 9 trading day chart for Insys Therapeutics:

Click to enlarge

News or Events to Explain Increase in Price-per-Share

There are several news releases that could have contributed to the increase in the price-per-share for Insys Therapeutics stock, as follows:

Click to enlarge

There are too many PRNEWSWIREs in too few trading days to statistically test or identify which had the most significant impact on the increase in Insys Therapeutics stock prices over the past 9 trading days. It may not matter, as my earlier opinion with respect to Insys Therapeutics continues to apply:

Insys Therapeutics Inc. Summary: Insys Therapeutics' stock did not peak on or about the November 2012 election event date. Insys Therapeutics' stock peaked on or about the November 2014 election event date. Insys Therapeutics' stock did not decline prior to the calendar year-end tax-loss selling. Insys Therapeutics is not a "penny" stock, by any definition. Insys Therapeutics is not trading like a marijuana stock, and I have no buy or sell recommendation.

Summary

Tax loss selling season will begin on or about the end of November. This is when investors examine the prospect of writing a check to the Internal Revenue Service on April 15, 2017, or "matching" losers against winners to minimize this cash outflow. This "seasonal" is well documented in the financial economics literature. It is not anomalous.

I was correct in my predictions for n=11 of N=13 or 85% of the stocks I examined in an earlier article. I am providing explanations for the n=2 exceptions. In both cases, there were headlines that can explain these exceptions over a very short, 9 trading day period. I will continue to "sit on the sidelines" and wait for calendar year-end before taking any long-term buy-and-hold position in any marijuana stock.

APPENDIX

> 5,000 SA Followers

n

Sector

Firm Name

Ticker

1

AgTech

Growlife Inc.

( OTCPK:PHOT)

2

GreenGro Technologies Inc.

( OTCPK:GRNH)

3

Biotechnology

Cannabis Science Inc.

( OTCPK:CBIS)

4

PharmaCyte Biotech Inc.

( OTCQB:PMCB)

5

Insys Therapeutics Inc.

(NASDAQ: INSY)

6

Consulting Services

General Cannabis Corp.

( OTCQB:CANN)

7

Consumption Devices

mCig Inc.

( OTCQB:MCIG)

8

Vapor Corp.

(NASDAQ: VPCO)

9

Cultivation & Retail

Terra Tech Corp.

( OTCQX:TRTC)

10

Hemp Products

Medical Marijuana Inc.

( OTCPK:MJNA)

11

Medbox Inc/Notis Global Inc.

( OTCPK:NGBL)

12

CV Sciences Inc.

( OTCQB:CVSI)

13

Other Ancillary

American Green Inc.

( OTCPK:ERBB)

Click to enlarge

The chart was developed from the data, provided below:

Date

PHOT

GRNH

CBIS

PMCB

INSY

CANN

MCIG

VPCO

TRTC

MJNA

NGBL

CVSI

ERBB

2016-11-08

$0.0158

$0.1011

$0.0660

$0.0300

$11.7500

$4.3500

$0.1960

$0.0001

$0.4900

$0.1600

$0.0006

$0.6100

$0.0031

2016-11-09

$0.0154

$0.0910

$0.0530

$0.0300

$13.5600

$4.0200

$0.1720

$0.0001

$0.4500

$0.1300

$0.0005

$0.5500

$0.0023

2016-11-10

$0.0098

$0.0649

$0.0360

$0.0300

$14.0500

$3.6700

$0.1110

$0.0001

$0.3800

$0.0900

$0.0003

$0.4300

$0.0016

2016-11-11

$0.0120

$0.0850

$0.0480

$0.0300

$13.6300

$3.4800

$0.1480

$0.0001

$0.4000

$0.1100

$0.0004

$0.4800

$0.0019

2016-11-14

$0.0125

$0.0959

$0.0510

$0.0400

$14.5300

$4.0500

$0.1950

$0.0001

$0.4300

$0.1400

$0.0004

$0.4700

$0.0021

2016-11-15

$0.0110

$0.0820

$0.0470

$0.0400

$14.1000

$4.2600

$0.1770

$0.0001

$0.4200

$0.1300

$0.0003

$0.4300

$0.0018

2016-11-16

$0.0109

$0.0845

$0.0450

$0.0400

$12.7200

$3.9500

$0.1640

$0.0001

$0.4100

$0.1300

$0.0004

$0.4500

$0.0018

2016-11-17

$0.0118

$0.0819

$0.0410

$0.0600

$13.4900

$3.7300

$0.1650

$0.0001

$0.4000

$0.1200

$0.0004

$0.4400

$0.0017

2016-11-18

$0.0112

$0.0740

$0.0380

$0.0500

$13.4500

$3.7500

$0.1600

$0.0001

$0.3800

$0.1100

$0.0003

$0.4200

$0.0015

Click to enlarge

Two stocks have appreciated in value, as depicted in the graphic and contained in the body of the article:

Date

PHOT

GRNH

CBIS

PMCB

INSY

CANN

MCIG

VPCO

TRTC

MJNA

NGBL

CVSI

ERBB

2016-11-08

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

0%

2016-11-09

-3%

-10%

-20%

0%

15%

-8%

-12%

0%

-8%

-19%

-17%

-10%

-26%

2016-11-10

-38%

-36%

-45%

0%

20%

-16%

-43%

0%

-22%

-44%

-50%

-30%

-48%

2016-11-11

-24%

-16%

-27%

0%

16%

-20%

-24%

0%

-18%

-31%

-33%

-21%

-39%

2016-11-14

-21%

-5%

-23%

33%

24%

-7%

-1%

0%

-12%

-13%

-33%

-23%

-32%

2016-11-15

-30%

-19%

-29%

33%

20%

-2%

-10%

0%

-14%

-19%

-50%

-30%

-42%

2016-11-16

-31%

-16%

-32%

33%

8%

-9%

-16%

0%

-16%

-19%

-33%

-26%

-42%

2016-11-17

-25%

-19%

-38%

100%

15%

-14%

-16%

0%

-18%

-25%

-33%

-28%

-45%

2016-11-18

-29%

-27%

-42%

67%

14%

-14%

-18%

0%

-22%

-31%

-50%

-31%

-52%

Click to enlarge

Disclosure: I am/we are long BLOZF.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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