For the trading week that ended December 8, 2023, my proprietary Canadian Cannabis Company Index (MCCCI) increased by 4.2% compared to the prior week when it increased by 10.4%. The index consists of 14 stocks, many of which are among the most widely held holdings of the 3 ETFs (, , and ) that I consider to be a reliable barometer of the Canadian cannabis sector. MCCCI’s differentiated business model is both weighted and market capitalization-based because I believe that this approach best represents the current landscape of the Canadian cannabis sector. Now let us look at this week’s good, bad, and ugly stocks, shall we?Image Source:
The GoodThere were 2 stocks that increased by more than 10%, which is my metric for inclusion in this category: +32.5% and +10.6%. In my view, the recent price spike in Canopy Growth Corporation is largely due to the which is expected to reduce debt and therefore interest expense.
The BadThere was 1 stock that decreased by more than 10% (but less than 20%) which is my metric for inclusion in this category -10.6%. Rubicon Organics Inc. was a “good” stock last week and its thinly-trade history adds to the trading volatility.
The UglyThere was 1 stock that decreased by 20% or more, which is my metric for inclusion in this category: -45.8%. Neptune Wellness Solutions Inc. is a 4th quartile MCCCI stock with frequent price swings.
Valuation Metric ReviewThere was a 3.6% increase in the “Big Four” (3 of which increased) compared to the prior week when there was an 11.5% increase. As cited above, CGC was (by far) the outlier of the group. However, I believe this may likely be short-lived.
RecapThere was a 7.3% decrease in the relative strength index compared to the prior week when there was a 17.1% increase. 4 of the 14 MCCCI stocks increased, all of which are among the 6 highest capitalization stocks in the MCCCI. This anomaly may be a “1-off” but it is indicative of how they often trade in “lock-step.” Let us see how this volatile sector has performed at the same time next week, shall we?More By This Author:
The Canadian Cannabis Report – Monday, Dec. 11
