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Showing posts from March, 2019

HEXO: Trending Up

HEXO Corp. is playing several favorable trends that should lead the cannabis stock to rally further in the next few months. The uplisting to the NYSE American stock exchange is a major catalyst that is still playing out. The Newstrike Brands deal gives the company the scale needed to attract more institutional investors. The stock is cheap on a P/S ratio in comparison to industry peers. The market loves the growth offered by the cannabis sector, andHEXO Corp.(HEXO) is the next company to offer that expansion profile that the market eats up. The combination of an uplisting to a major U.S. stock exchange and a large merger positions the stock for a big breakout to new highs, typical of the sector. Read the full article on Seeking Alpha.  More commentary - WhoTrades Disclosure: No position. Please review the disclaimer page for more details. 

Stitch Fix: Big Beat Wasn't A Surprise

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Stitch Fix (SFIX) is now up 20% in after-hours trading following a monster beat in FQ2. The market was fearful about active clients growth in the typically weak holiday quarter. Investors need to focus more on the 18% YoY growth with the big growth period outside of the busy holidays were people are focused on gifts for other people.

The company boosted FY19 guidance to $1.545 billion for growth in excess of 25%.


With 103 million shares outstanding, the stock trades at only about 2x sales estimates based on 103 million shares outstanding and a $32 stock price. Stitch Fix traded all the way up to $50 and these numbers support a return to the previous highs.



More commentary - WhoTrades


Disclosure: No position. Please review the disclaimer page for more details

Aurora Cannabis: $8 Isn't Likely Enough

The market wants to push Aurora Cannabis towards previous highs. Cowen placed a $10.50 target on the stock while the previous high of $12.50 is on the radar. The Canadian cannabis market is about to become flooded with legal supply as the illegal supply undercuts prices. The best projection is that weak prices causes Aurora Cannabis to miss revenue targets this year, ultimately crushing the stock towards year end. My investment thesis on Aurora Cannabis (ACB) has long held that the cannabis stock might have another rally left based on sector momentum. In the short term, the market cares more about price than fundamentals and a move above $8 has been a signal for another test of previous highs. A big analyst call sealed the likely rally in the stock.

Updated 3/13
The hiring of Nelson Peltz doesn't signify anything, but Nelson getting richer per the huge option grant to him. Regardless, the stock was big buy for this break above $8.

Option Grant
In consideration for the Services to be…

Ambarella: Never Ending Decline

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After the close, Ambarella (AMBA) reported FQ4 quarterly results that beat estimates. The guidance for FQ1 just shows how the CV chips can't gain traction. After reporting FQ4 revenues of $51.1 million, the company gave horrible guidance for the current quarter.

GreenSky: Absurdly Cheap Fintech

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GreenSky (GSKY) is up about 12% in mid-day trading following solid Q4 results in comparison to expectations.The stock is still down over 50% from last year as the fintech reset EBITDA expectations from very high levels.

Novavax: Too Bullish

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For a stock trading at $0.63, Novavax (NVAX) sure has a lot of bullish investors. According to sentiment on StockTwits, investors are still still 85% bullish on the stock.

Novavax Fails Again

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Before the bell, Novavax (NVAX) released results on the latest Phase 3 test for RSV for infants that failed to meet desired results. The failure follows similar results with the RSV for older results a couple of years ago.
The study failed to sufficiently separate from placebo as measured by the incidence of RSV lower respiratory tract infection (LRTI) through 90 days of life, the primary endpoint. In the treatment group, the incidence of medically significant RSV LRTI was 39% (placebo incidence not provided). Other trial highlights provided in the presentation.



The stock is being hammered down 67% to $0.69. Cowen slaps a $0.25 target on the stock has Novavax has again failed to get a drug approved while spending millions on drug testing. My long frustration with the company is that they constantly shift focus on vaccines without any results while burning cash left and right. The lack of partnerships for their promising vaccines has always been a telling story since the sm…