Message board fun and games with Cannabis plays like New Age Farms

Banter on stock message boards can be fun.  On occasion you might stumble on someone sharing some useful information, but by and large it typically degenerates into a penis waving contest between those pumping the positives and others who bash based on the negatives.  I am prone to do both, with different stocks of course.  

New Age Farms trades in Canada on the Canadian Securities Exchange (CSE) under the symbol NF and in the U.S. on the OTCBB with the symbol NWGFF.  The company came onto my radar the same way many penny stocks do, via a promotional email blast from some outfit that calls itself Daily Stock Reporter.  

The email itself is pretty much standard boiler plate for penny stock promotion, with the typical hyperbole you would expect:  "There's no telling how big of a run this could have....".  If you look closely at the small font print at the bottom of the email it discloses payment of $12,500 in cash. There's also a link to a "Full Report":  http://egmprofiles.com/NWGFF.pdf

If you bother to go onto that site you'll see the disclaimer again at the bottom, and if you click the word disclaimer it takes you to this EGM's disclaimer page.  I have to admit that I love the honesty and candor, they basically say "this is a pump".  Here's a cut and paste of some of what it says.

What will happen when the Campaign ends?

Most, if not, all of the Profiled Issuers are penny stocks that are illiquid and whose securities are subject to wide variations in trading price and volume. During the Campaign the trading volume and price of the securities of each Profile Issuer will likely increase significantly. When the Campaign ends, the volume and price of the Profiled Issuer will likely decrease dramatically. As a result, investors who purchase during the Campaign and hold shares of the Profiled Issuer when the Campaign ends will likely lose most, if not, all of their investment.

Why do we publish only favorable Information?

We only publish favorable information because we are compensated to only publish favorable information.

Why don’t we publish negative information?

We don’t publish negative information because we are not paid to publish negative information. We are paid to publish only favorable information.

Is the Information complete, accurate, truthful or reliable?

The Information is a snapshot that provides only positive information about the Profiled Issuers. The Information consists of only positive content. We do not and will not publish any negative information about the Profiled Issuers; accordingly, investors should consider the Information to be one sided and not balanced, complete, accurate, truthful or reliable.

What we do not do.

We do not publish negative information about the Profiled Issuers. We do not verify or confirm any portion of the Information. We do not conduct any due diligence or research any aspect of the Information including the completeness, accuracy, truthfulness or reliability of the Information. We do not review the Profiled Issuers’ financial condition, operations, business model, management or risks involved in the Profiled Issuer’s business or an investment in a Profiled Issuer’s securities.

Its hard to argue with that disclosure, its pretty bang on the money and brutally honest.  If you want to read the whole thing here's the link:  http://www.egmfirm.com/disclaimer/

I shared that information on Stockhouse.ca, my user ID is ledrog and I've been on that site since 2001. As you might expect I was attacked by the bulls as a short, accused of using multiple IDs, and of engaging in manipulation so that I could load up "cheap".  I find that funny since it wasn't long ago that NF was trading around 2 or 3 cents, so I hardly think anything over 10 cents is "cheap".  

Full disclosure, I have no position in NF long or short and no intention of initiating one at any time in the future.  

Okay.....so the bulls say:  What of it?  Read the news, this is a great company.....gonna be huge, great business plan, yadda yadda yadda.  Yeah yeah, I've heard it all before.

These emails are aimed at the lowest common denominator in my opinion, people with more money than brains.  I'm talking about people who think "Safe Harbour" is a small town in Newfoundland. Its "Forward Looking Language" we're talking about here.  Anything that says we: expect, anticipate, plan or similar type language.  It sounds great, but these are not material statements of fact.  Plans don't always work out, expectations are often not met, things that are anticipated sometimes never come to pass.

Regular readers know I'm not big on fundamentals, especially with highly speculative stocks.  The point I keep trying to drive home is that if you want to make money with penny stocks, your best chance is with companies that are lightly traded, because the sheep haven't been called to the dinner table yet.  

The risk you take buying when things are quiet is that the herd will never show up.  That the promotion, news and hype that gets the great unwashed all excited, greedy and buying high, that it won't happen.  In my view that's still better than storming into a stock that's already climbed from 1 or 2 cents to 20 or 30 cents for gains of 1,000% or more.

I'd love to post a chart of NF, but charting sites are few and far between for CSE listed stocks. The CSE has the easiest listing standards in Canada, I liken the CSE to the U.S. OTC non-reporting Pink Sheets, sometimes called the Gray Market.

Cannabis stocks are popping up all over the place, and I fully expect to get more emails on others, especially for those listed on the CSE and Pinks.  I have taken a couple of flyers myself and if one of the companies I hold starts getting pumped and promoted in this fashion, I'm sure you can guess what I'll be doing.

Good luck

MyDx - Another way to play the marijuana space

This blog is starting to generate some emails, nothing huge, one or two a week.  Last Wednesday Zane wrote and asked me if I'd consider looking into a company called MyDx Inc that trades OTCQB under the appropriate symbol MYDX.OB.  They have created a hand held analyzer that detects chemicals in, you guessed it, Mary Jane. as well as food, water and even air.  It can work in tandem with a smart phone and a downloadable free application.  

I've already written about another interesting Cannabis play in Rocky Mountain High Brands (RMHB.OB) and their Hemp Infused energy drinks, so I figured.....what the hay.  Or perhaps:  "What the hemp" might be a better way of putting it.

Cannabis, Hemp, Marijuana, call it what you want, the sector is getting a lot of...uhm, Buzz.  With California voting in favour of legislation and Canada poised to do the same at the federal level this spring it stands to reason that public companies in this space are going to be attracting a lot of attention.

I'm not going to go in depth on the fundamentals here, regular readers already know my opinion.  I consider all fundamental data to be at least weeks and often times months old. Hence in my view its already "baked" into the share price.  Okay okay, I'll slow down on the Wacky Tabacky quips....they're hard to resist.

MYDX closed this past Friday at .022 cents American, trading on the OTCQB as opposed to the non reporting Pink Sheets which I will not touch.  As of  October 12th of this year there were 150.5 million shares outstanding, giving the company a Market Cap of about $3.3 million.  

There is some promotion going on, which as I've often pointed out is to be expected with development stage companies.  They're profiled at CFN Media Group, a website that specializes in promoting the overall Cannabis space.

http://www.cannabisfn.com/mdc/mydx-inc/

They haven't been around for a long time, with the chart showing trading starting in April of 2015 in the $2 to $3 range.  That's quite a drop, all the way down to just a couple of pennies.  You can see for yourself here:

Two things pop out.  One obviously is the big drop in the PPS, and the second is the explosion of volume starting in September and carrying through to the present.  

According to news released by the company, their application was the number one downloaded free App in IOS App Store in the medical category:

http://finance.yahoo.com/news/mydx-one-app-rockets-top-141100654.html

There's another reason however why I think volume has exploded, and that reason is short selling. As might be expected with a stock trading for less than one single nickel, short interest has been very low....until recently that is.  Up until September the reported numbers of shares borrowed and sold into the market was only a few thousand, forty odd thousand as recently as July.

And then it shot up to almost 200K at the end of August and then to a high of over 2 million as recently as September 30th.  The most recent update has short interest just shy of 1 million current up to Oct. 15th.  So short interest shot up in tandem with the explosion in trading volumes in other words.

That suggests to me that MYDX is now fully "in play".  In my opinion this stock has attracted the attention of the real players, and as such I expect there to be a lot of volatility.  High frequency traders scalping large quantities for small % gains, retail investors buying and holding, penny flipping types riding momentum on swing trades.  And given the minuscule market cap, it strikes me that there is a lot of upside potential here.  

Now full disclosure.  As I write this I have no position in MYDX whatsoever, and as it says at the very bottom of this blog, I have not and will not ever accept payment in any form to write about any stock. With that being said I may very well open up a position in this company, perhaps within the next 48 hours.  

Do note that penny stocks are incredibly high risk investment vehicles.  It is quite possible that one may lose some or all of their investment when buying OTC stocks, so please take special care here. My regular readers know my favourite saying: "Nobody ever went broke by taking profits".  In my view stocks like MYDX are only suitable for risk capital, that is to say money that one can afford to lose.  

Please do your own DD and research and examine your own objectives, be they long term, short term or somewhere in between.  And good luck.  

Resverlogix - Shareholders waiting to see what's in the box

Resverlogix (RVX.TO in Canada or RVXCF in the U.S.) is reminding me of a Christmas present wrapped and under the tree, or perhaps an episode of the game show 'Let's Make a Deal'.

Back on August 22nd the company announced that its Annual General Meeting (AGM) of October 5th 2016 had been cancelled, with no date for rescheduling at that time,and no reasons given. Message board participants reported communications with the company's IR representative as saying no explanation could be given due to disclosure rules, I myself received such an email.

Then on October 6th the company put out a PR announcing the Annual and Special Meeting of shareholders will be held on December 15th 2016.  

http://web.tmxmoney.com/article.php?newsid=8112457906672798&qm_symbol=RVX

The company hasn't been sitting on its hands in the interim.  They just did a presentation in Cologne at BIO Europe.  Here is a link to the slide presentation from that event:  

http://www.resverlogix.com/upload/media_element/252/01/rvx-bio-europe---november.pdf

Notable in that presentation is yet another mention of a second licensing/development deal to be announced in 2016, the first being the deal in 2015 with Shenzen Hepalink.  When that deal was announced RVX.TO had made a big move and was trading up around $3 CDN after starting 2015 at less than $0.60 cents.  

Which brings me back to the first line of this blog posting, the references to the Christmas present under the tree or an episode of "Let's Make a Deal". 

In the PR of October 6th linked above the company stated that the matters to be considered at the December 15th meeting will be delivered to shareholders and filed on SEDAR no later than November 15th 2016.  I am expecting that information will give at least an indication, (if not the outright reason) as to why the Oct. 5 AGM was cancelled.  

Is it simply the licensing/development deal?  If so is it significant enough to send RVX soaring like it did in early 2015?  Is it perhaps something else more significant?  Could it be something negative?

Back this past August and early September RVX was trading down around $1.20 per share.  After spiking briefly up near $2.50 the PPS has settled in and around $1.80 to $1.90 with occasional gusts up around $2.  So what's in the box?  Did Uncle Resverlogix get us that gaming system all the kids are wanting? Or socks and underwear?   We can take $1.80 or so per share now, or wait to see what's behind the curtain.

I am holding out to see what's behind that curtain.  The phase III BETonMACE trial for diabetes patients has now been enrolled for a full year and the company recently announced that there have been no safety or efficacy issues or concerns.  

The market game is never easy, and that's is as it has to be.  It is my belief that there has been a manipulative foot holding the PPS down.  Yes $1.80 or so is much better than the $1.20 it was at, but I think there is much more upside to come, and that good news on or before November 15th could send the PPS on another ride like it had in early 2015 when the price soared from less than 60 Canadian pennies to up around $3.  The difference now being that if a similar run starts it will be from a substantially higher launching pad.

Good luck.....read the disclaimer at the very bottom.  My views are biased as I am a shareholder.  

Nasal surgeries in the United States poised to explode

Next week many in the medical community are expecting a surge in patients needing dire nasal surgery.  The cause?  The election on Tuesday will have so many voters pinching, squeezing and holding their noses so hard that serious damage can occur to that part of the body known in medical circles as the proboscis.  

While I try to be helpful here with this blog, in this case I don't see a solution.  I grew up in the United States and find most Americans to be warm, caring, inviting...by and large American are wonderful people.  And a lot of them are really smart.  That's why its so perplexing to see that the best my American friends can come up with in their election for President is Donald Trump and Hillary Clinton.  

There are so many men and women in the United States who are caring, principled and intelligent. And this is the choice you're forced to make?  To quote a recent movie title:  'Whiskey Tango Foxtrot'!!!  I do not envy you my American friends.  Hell, the guy pushing the broom at the hotel I stayed at in Virginia Beach this past summer has more appeal than Clinton or Trump.

Good luck America, I'll be watching.  And if anyone can suggest a publicly traded company that will benefit from all the nasal surgery that is sure to follow please send me an email.  You have until Tuesday morning to let me know.  

Vuzix - What happened? Know the risks

I first offered up my opinion on Vuzix on Saturday September 3rd, when the PPS had closed at $8.81 the day before.  I had opened a position on the short side on September 1st just after the opening bell a little north of $9, a position which still remains open.  I revisited Vuzix again on Oct. 10th by which time the PPS had fallen to $8.  In the first post I made note of all the bullish promotion, and in the second I focused in more on the history of dilution.

Now it is November and the PPS has fallen all the way under $6, closing at $5.85 on Friday November 4th 2016.  So why am I writing about Vuzix again?  Is it to pat myself on the back?  Yeah okay, there is an element of that certainly. I'm human and as prone to the sin of pride as anyone. But I also know that success can be fleeting in the markets, VUZI could rally next week and the pumpers will jump all over this pathetic little blog.  And if it makes it all the way back to $9 or even $8....have at her, fill your boots.  

I do in fact expect there to be a rally here and there obviously.  Rarely do stocks go up or down in a straight line.  VUZI didn't go from about $4.50 in May to almost $10 in September of this year without pauses and pullbacks, and it didn't fall from those lofty heights to under $6 without the occasional move upward.

This post is going to be about the risks associated with taking out a long position in VUZI.  There's lots of chatter about this company being an industry leader, either now or in the future, but I put that down to either wishful thinking or brainless pumping.

The single biggest risk in my view is Competition.  This is a very crowded space and Vuzix is a guppy swimming with whales. Other entities competing include electronic giants like: Samsung, Sony, LG, Toshiba, as well as other players like Google, FaceBook and Microsoft.  

When it comes to brand recognition alone most people will recognize all those names.  Vuzix on the other hand?  I bet most people (discounting current and past shareholders) have never heard the name once.  Vuzix is going up against major players with established supply and distribution channels, no need to hit the road with a U-Haul to visit trade shows for the big boys.

And with the way the AR and VR space is integrating with other devices like computers, smartphones and gaming systems, its not hard to see Vuzix operating at a severe handicap, perhaps so severe that its insurmountable.

And then of course there's financing.  There's an old saying, ''build a better mousetrap and the world will beat a path to your door''.  That's certainly true in this space as evidenced by the amount of money raised by a start up called Magic Leap.  Maybe you've seen this eye popping video that company put out:

Magic Leap has reportedly raised $1.4 billion in venture capital from such players as Google, JP Morgan, Alibaba and others.  Here's a Forbes article on the company:

http://www.forbes.com/sites/davidewalt/2016/11/02/inside-magic-leap-the-secretive-4-5-billion-startup-changing-computing-forever/#6c6ff42ee83f

In fairness Vuzix was profiled its own video back in 2014.  Here it is:

I don't know about anyone else, but the whale jumping out of the gym floor, that has ''WoW'' factor written all over it.  The Vuzix bit about the stadium lights going down and a technician using the glasses for GPS and technical assistance, meh.  Like there wouldn't be a maintenance guy at the stadium who could take him there and a cell phone conversation wouldn't be enough to fix the problem if the tech didn't know what to do.

I know Vuzix bulls like to make a big deal about the $25 million Intel invested almost two years ago in exchange for shares.  But $25 million for a company with around $40 Billion on its balance sheet, its almost like me buying a homeless person a cup of coffee.  Besides Vuzix is an Intel customer, and given the way Vuzix burns through capital it was probably a wise investment, companies with $0 money have a hard time paying their bills after all.  

In short (no pun intended, well....maybe a little) I see Vuzix as being just way too small to compete in this space.  The company has a long history of attracting investor attention via promotion and bullish sounding press, but ultimately it has always failed to deliver where it really counts, on the bottom line.  Artificial and Virtual reality products like glasses, this will be a huge market in my opinion, but Vuzix will be a footnote I believe, like Tandy and Commodore 64 in the home computing space.