June 14, 2017
"Stocks in the Spotlight's"
A CURRENT UP-DATE
Nasdaq symbol in ( ) = Quote
-- News in ( ) = news
on each will take you there
Week's Closing Indices
Cannabis Stocks - A Fast Growing Industry
The DOW 30 seems to be stuck in a range
the markets seem to be caught in a fairly tight trading range for most
of the year. On March 3 the DOW 30 closed at 21,005 and on June 6 it
closed at 21,136. This works out to a 131 point gain in 3 months, or a
gain of 0.006%.
tight range is showing us that only a few stocks are responsible for
the continued bull market, which is not a great sign for the months
ahead. If only a few companies are causing the bull market than it will
only take a few to go the other way.
investors looking for Apple to trade for $5000 a share, or maybe
Amazon. It will never happen meaning someday investors will feel like
they have made enough and start selling. A bit of a notice ahead of
time. Once they start selling the markets will fall so fast we will be
lucky to get out with our shirts still on.
is a strong chance that the sideways action has to do with the hopes
and let downs having to do with a tax reduction. The Republicans are
just taking so long and the longer it takes the more blame people will
put on the Republicans.
that were also worried about the possibility of higher interest rates,
since the Feds are holdovers of the Obama administration, had their
worst worries come true. The FEDS raised interest rates by 1/4%.
should not happen in my opinion. It could easily slow down the
recovering mortgage industry. Wages have been stuck in the backwoods
with no increases and millions of Americans are still out of work.
I feel the rally has more legs left, I am still concerned, as this is
still the most overvalued market I have ever seen. Yes, the rally can
continue but it's doing so on a small group of stocks and the best
thing we can do is keep one eye open and take a defensive stance.
I don't believe this rate increase will lead to much, but it is a start to the road higher and corrections can start any time.
means taking some profits on the big positions and moving that money
into bargains in the secondary stocks, plus finding a low-priced stock
and putting some money there.
strong consumer confidence will be the recipe for a continued long term
rally. Falling consumer confidence due to fear will be the straw that
breaks the camel's back.
DOW 30 chart below is an average of all 30 of the Dow Jones industrials
and what percentage they're away from the 52-week high. I use it as a
measure of when markets are undervalued, or overvalued, simply
because these 30 stocks are carried by just about every fund there is.
Keep in mind, since it is a discount, the percentage can never be in
The record for the
discount to the 52-week high is - 2.87% reached on 1.8.2010.
The maximum discount was -52.76 on 11.20.08 showing just how far this index can move.Currently the discount rate is -5.61%,
meaning there is some room to continue improvement, but the nearer the
average of all 30 stocks come to the 52-week high the more overvalued they become. In 2016 there were 24 that reached a new 52-week high. There have been 22 reaching a new high so far in 2017.
This index had
been trading mostly between -7% and -5% from December all the way to
today. We can see by the chart above how the Dow 30 has stayed in this
range for six months, with only one breakout, making it harder to
figure out what it is going to do next.
once an index or stock sets a new high the next new high is easier to
only has to
break the current one by 0.01%. Also, Once the previous 52-week high
it is easier to set a new high. The DOW 30, about a week ago, set a new high 12 days
straight for a total gain of 703.10 points in those 12 days but this works out to only a total of 3.9%.
fear of losing profits will be the reason forcing the markets down
rapidly, which in an overvalued market is, and should be, expected.
Nothing goes up forever. Blue chips and big OTC stocks have become
much overvalued again due to this continued rally.
for the bargains, look for the deals and look at newer and start up
companies and do the homework.
other best bet would be a small stock that reads good and offers a
decent chance. It needs to be trading near the low-end but with a
reason to climb. Again, they are out there. We just have to search hard
to find them.
A Fast Growing Industry
The Cannabis industry will be 2nd to none as far as growth.
Billions of dollars over a short period of time as the market is pre-built
last several months I have been receiving promotional information on
cannabis stocks in my email and even a few times as headlines to an
article in MY Yahoo! Of course I was driven to do a bit of research and
what I found what scary.
The email was about how we could invest $50 in 10 different cannabis
stocks and we would be able to retire sooner than we ever expected.
Most of these companies were low-priced stocks (penny stocks), but a
few were higher than a dollar. Nothing wrong with being under a buck
but it does depend on what we are looking for.
couple of examples would be a stock (CBIS) trading for $0.11 with no
and 2.31 billion shares outstanding. Another (MJNA) was trading at
over $9 million in revenue but with 3.03 billion shares. (TAUG) $0.001 -
1.84B. (PHOT) .0063 - 1.9B. Not one is worth even following with so
There are a few of them that I feel are worth a closer look. If you
want to watch them they are: CVS Sciences (CVSI) $0.28 - General
Cannabis Corp. (CANN) $1.21- Cannagrow Holdings (CGRW) $1.02 . If
interested in the industry these three show promise.
There are so many pot stocks with an outrageous amount of shares issued
and trading. We need to remember my rule and that is to never invest in
a penny stock that has over 100 million shares outstanding.
This is because with too many shares trading the Market Makers (MM) own the stock and the company can do little about it.
This is because MM's do not read the news on a company.
They do not read the financial reports because they do not care.
only care about "supply and demand" and with too many
there will always be a supply.
Most of these new pot stocks will never
make it. Many are trading because they want to play the "private
offering" game as they can continue to raise money without even getting
up to go to work.
But, there are those that are real and very much concerned about
building a strong company in the fastest growing business in North
America. Rumor has it that the entire country of Canada will legalize
cannabis next year. I'm guessing the US will be right behind Canada.
Yes, I do believe the cannabis industry is going to explode and as in
any new industry there will be opportunities to make big profits on
successful companies entering the cannabis market place. I also believe
that the medical aspect will be the place to be.
best bet would be to find a low-priced stock that is pursuing the
idea of making medical products from cannabis, as it appears cannabis
has the ability to cure many problems. Companies that are developing
unique health products and pharmaceuticals that utilize cannabis is the
place we want to be.
I firmly believe we can make big money in this exploding industry but
not if we are not very careful. We have to do our homework and make
sure we do not get caught up in Pump & Dumps, or for that matter
companies that have little to offer.
I am working hard trying to find a good candidate worthy of our hard earned money. I am working on a few good cannabis stocks and I will certainly let you know as soon as I find one I feel we should jump on.
In closing I will give you a cannabis stock I feel strongly about and
it just set an all-time low. Its a Canadian stock trading at 0.10. The
name is Algae Dynamics (ADYNF)
and it looks like a great shot, especially when at the low (no bad
news). The 52 week high is 0.84. Pick up some shares before it moves
back up and I expect the move up soon.
We need to remember that, traders do not read the news, that too many
shares trading is not good and the story has to make sense.
Powin Energy - (OTC-BB) (PWON) (52 week range 0.30 - 2.89 ), now at $1.35.
is a giant contract when compared to the 2 MW contract with California
Edison. It also shows Powin can build any size storage you need.
is not very many shares are available anywhere under $2, making $1.35 a
steal. Low float and no one wanting to sell are the reasons. My best
guess is a much higher price in the next 18 months.
From $1.75 to over $15.55
Advanced Micro Devices (AMD) (52 week range 4.30 - 15.55 ), now at $11.77, up from $3.64 0n 1.20.17.
has all of a sudden turned things around, as they always have, and many
analyst are recommending buying the stock even after moving over 800%
It appears Apple will be using AMD's new chip in the new 21" and 25" computers.
problem now is if we should continue to buy and since I am very
concerned about a big correction I recommend waiting to buy until we have a
lower entry level as this stock tends to follow the markets down
whenever they fall.
some profits and learn as much as possible and be ready when it trades
lower. We could easily see over $20 in 2017, but under $6 in a
From $9.50 to over $27
Fonar Corp. ( FONR ) (52 week range 15.70 - 28.09),
now at $27.35. I first started following
Fonar in 1982 and have followed it every day since. Great products would
be the reason to own this stock. The current PE is only 9.26.
has been a favorite of mine for over 30 years. My buy at $.62 a few years
back led to over $27 before falling back to the $9 area but once there
the stock moved up and has been flirting with the $27 area again.
recently announced revenue of $20 million for the 3rd Q, with $5.5 mil. in profits, or $0.88 per share.
No matter how much I like the stock it has too high to buy. Entry is best if under $20. Lighten up while near $27.
Best if in after a pullback !
From $9.50 to over $19
Comtech Telecommunications ( CMTL ) (52 week range 9.52 - 19.80), now at
$19.41, up from $15.00 last week. Our original buy under $4, in 2003, carried
all the way to over $50 and split twice along the way. CMTL is a stock
to own for the long term.
A few months back the company
issued a press release, disclosing a public offering price of a
new offering would be $14 per share, which makes entry
here a decent shot a profits.
buy under $10 last November has worked quite well, however in lieu of
the overvalued markets taking some profits might not be a bad idea.
Best if in under $14 !
In closing I would like to mention that one of the worst things we can do is buy stock in a young penny stock company that has already issued, or is going to issue too many shares too low in price.
market makers love too many shares as it keeps the price low making it
possible to short millions of shares, which prevents the stock from
a quality small stock "to buy" with not too many shares owned, near the
low, will be very hard but once found the rewards can be plentiful.
If you have a situation, or questions, please feel free to contact me.
I wish you all good luck in 2017!
J.R. Budke became a stock broker in 1981, an options
principle in 1982 and a branch office manager in 1987 and a National
Sales Manager over 150 stockbrokers. He is currently
inactive as a stockbroker as of 12/31/99. J.R. writes the articles and
opinions for the Stocks in the Spotlight. The stories and stocks found on this
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