Invest $1,000 in This Oil Stock Today to Profit in 2021

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Canadian oil stocks are under considerable pressure. Oil’s sharp collapse, which saw West Texas Intermediate (WTI) plunge into negative territory for the first time ever, is hitting the energy patch hard. While the immediate outlook remains gloomy, this has created an opportunity to acquire quality drillers at once in a generation prices.

One oil stock that stands out is Frontera Energy (TSX:FEC). The driller, which emerged from the bankruptcy of Pacific Exploration and Production, has lost 64% since the start of 2020. This is significantly greater than the 55% decline of the international Brent benchmark price.

While there are plenty of headwinds ahead, there are signs that Frontera is very attractively valued, making it a speculative buy for contrarian investors betting on higher oil.

Why invest in oil stocks?

A key advantage of investing in oil companies rather than oil is their levered exposure to the price of crude. This means that when oil plunge their price decline, like Frontera’s, typically exceeds that of benchmark oil prices.

Conversely, when oil rallies it means they generally experience far greater gains than oil, meaning they can deliver outsized returns to investors.

Key is identifying those upstream oil producers that possess quality assets and strong fundamentals, allowing them to weather the current crisis.

Quality oil portfolio

Frontera owns a diversified quality portfolio of oil assets across South America, with its main producing acreage located in Colombia. This not only gives Frontera a handy financial advantage by allowing it to access Brent pricing, which trades at a premium to WTI, but benefit from lower operating expenses.

As a result, Frontera reported a credible first-quarter 2020 operating netback of US$16.21 per barrel of oil sold. The driller’s ongoing push to reduce operational costs and shutter non-economic production will keep its operations cash flow positive. That will be aided by Colombian government initiatives to reduce pipeline transportation costs.

Solid fundamentals for an oil stock

One of Frontera’s key strengths is its considerable liquidity and solid balance sheet. It finished the first quarter with US$265 million in cash and another US$30 million of restricted cash. This gives Frontera considerable financial flexibility, positioning it to emerge from the latest crisis relatively unscathed.

Importantly, Frontera has a very manageable US$364 million of long-term debt and lease liabilities. There are no debt repayments due until 2023, giving Frontera considerable breathing space to overcome the current crisis.

What makes Frontera a top oil stock to buy (aside from its solid balance sheet and quality assets) is that its shares are on sale. The driller is trading at a deep discount to the after-tax net asset value of its proven and probably oil reserves.

At the time of writing, Frontera’s price of $3.55 per share is less than a third of its $11 per share after-tax net asset value. This highlights the considerable potential upside available when oil firms and Frontera’s stock rallies.

Foolish takeaway

Frontera has long failed to unlock value from its oil assets. Finally, toward the end of 2019 it had resolved many of its legacy issues and was on track to reward investors, but this was derailed by the latest oil price collapse and coronavirus pandemic.

Nonetheless, Frontera will survive the current crisis. As oil prices rally higher, it will deliver considerable value for shareholders during the second half of 2020.

Looking for bargain stocks that could deliver outsized returns?

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
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More reading

• $1,000 Invested in Each of These Oil Stocks Could Make a Fortune in 5 Years
• 2 Canadian Oil Stocks to Buy Today and Profit in 2021
• 1 Top Canadian Oil Stock to Buy Today and Profit From a 2021 Oil Price Rally
• 2 Top Canadian Oil Stocks to Profit From the Oil Price Rally

Fool contributor Matt Smith has no position in any of the stocks mentioned.

The post Invest $1,000 in This Oil Stock Today to Profit in 2021 appeared first on The Motley Fool Canada.

3 Dividend Must-Have Investments

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Generating a stable income for retirement is one of the primary goals of any investor. In order to accomplish that goal and remain diversified, investors should invest in a multitude of stocks across a broad section of the market. Here are some income-producing investments that should be income must-haves for nearly any portfolio.

This is a dividend must-have

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is neither the largest or the most well-known of Canada’s big banks. It is, however, a well-diversified bank with a handsome dividend and plenty of growth potential.

When it comes to international expansion, Scotiabank opted for the Latin American nations of Mexico, Chile, Columbia, and Peru. In contrast, nearly all of Canada’s other big banks opted towards expanding into the areas of the U.S. market. That’s not to say that Scotiabank didn’t expand elsewhere — it did, but the focus was on those four nations.

Those four nations are part of a trade bloc known as the Pacific Alliance. By expanding throughout those nations, Scotiabank has effectively become a familiar face to do business across the region. This has led to impressive growth during earnings season, also fueling the strong growth of Scotiabank’s attractive, must-have dividend.

Scotiabank currently offers a quarterly distribution every January, April, July, and October that works out to a handsome 6.28% yield.

A solid, stable utility

Few investments can offer the defensive peace of mind that Fortis (TSX:FTS)(NYSE:FTS) has. Fortis is one of the largest utilities in North America with a diversified portfolio of regulated facilities that is scattered across the U.S. and Canada.

One of the main benefits of investing in a utility stems from the business model itself. Utilities provide a regulated service in exchange for a recurring revenue stream. The terms of those agreements are set out in regulated long-term agreements that can span decades. That stable and recurring revenue stream leads to handsome dividends for investors.

Fortis offers a quarterly dividend that currently works out to a respectable 3.58%. Additionally, Fortis boasts well over four decades of consecutive annual bumps to that must-have dividend. This is something that few companies can offer, and Fortis remains committed to continuing that trend.

Fortis provides that handsome quarterly distribution every February, May, August, and November.

Your cell phone can make you rich!

Telecoms represent one additional area to consider. BCE (TSX:BCE)(NYSE:BCE) in particular operates one of the largest wireless networks in Canada as well as a vast media empire. That media segment includes TV and radio stations as well as an interest in professional sports teams.

BCE’s wireless segment is what investors should be most excited about. Wireless connections have evolved in the past decade from communications devices to become a must-have of our digital life. In short, an endless array of new data-hungry apps and devices provide a recurring revenue stream for BCE and in turn, a generous dividend.

BCE’s quarterly dividend currently works out to an appetizing 5.91% yield. Apart from the growing necessity of wireless connections, worth noting is that BCE has been paying dividends for well over a century. In other words, this makes BCE an incredibly stable investment to make for any portfolio of dividend must-have investments.

BCE has distributions in March, June, September, and December.

This Tiny TSX Stock Could Be the Next Shopify

One little-known Canadian IPO has doubled in value in a matter of months, and renowned Canadian stock picker Iain Butler sees a potential millionaire-maker in waiting…
Because he thinks this fast-growing company looks a lot like Shopify, a stock Iain officially recommended 3 years ago – before it skyrocketed by 1,211%!
Iain and his team just published a detailed report on this tiny TSX stock. Find out how you can access the NEXT Shopify today!

Click here to discover how!

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• Millennial Couples: Opportunity of a Decade to Invest for Your Future!
• These 3 Canadian Dividend Kings Haven’t Missed a Payout for 100+ Years
• TFSA Investors: Got $6,000? These 3 Stocks Are Looking Good
• 3 Stocks to Buy With Dividend Yields of More Than 7%

Fool contributor Demetris Afxentiou owns shares of Fortis Inc. and The Bank of Nova Scotia. The Motley Fool recommends BANK OF NOVA SCOTIA.

The post 3 Dividend Must-Have Investments appeared first on The Motley Fool Canada.

Goldman Scandal, BTC Bull Trap Fears, How Libra Will Make Money: Hodler’s Digest, May 25–31

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Goldman Sachs attacks crypto, why Bitcoin may be wandering into a bull trap, and how Libra is going to make money.

Jayant Bhandari: East Asia Will Be a Post-Pandemic Success

In conversation with Maurice Jackson of Proven and Probable, Jayant Bhandari of Capitalism and Morality offers his take on what the post-COVID-19 world will look like.

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Technical Analyst: Gold Explorer Stock at Point of Breakout After Prolonged Major Accumulation

Technical analyst Clive Maund charts Black Tusk Resources and explains why he sees it as an "immediate strong speculative buy."

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ALERT: 2 Super-Cheap Bank Stocks to Buy Today

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Investors have been treated to the second quarter of Canadian bank earnings in late May. Predictably, Canada’s top financial firms have been squeezed due to the COVID-19 pandemic. Provisions for loan losses have skyrocketed at top banks, but bank stocks have reacted surprisingly well. Bank stocks took another spill on Friday, which means investors may want to consider buying the dip. Today, I want to look at two bank stocks that offer monster dividends. Let’s dive in.

One regional Canadian bank stock that fell after earnings

Laurentian Bank (TSX:LB) is a regional bank based in Quebec. Its shares were down 9.39% in early afternoon trading on May 29. The stock has dropped 28% in 2020 so far. Laurentian released its second-quarter 2020 results on the same day.

The bank took major hits due to the COVID-19 pandemic throughout the second quarter. Adjusted net income plunged 76% year over year to $11.9 million and adjusted diluted earnings per share fell 81% to $0.20. Laurentian’s provision for credit losses increased to $54.9 million in Q2 2020. This is compared to $9.2 million in the second quarter of 2019. This increase was driven by higher collective allowances. However, net write-offs only climbed to 0.03% of loans compared to 0.02% in the prior year.

Shares of Laurentian Bank were trending toward technically oversold territory at the time of this writing. The bank slashed its dividend by 40% to a quarterly payout of $0.40 per share. This still represents a strong 5.6% yield. Quebec was one of the first provinces to push forward with its economic reopening. I like this regional bank stock as a buy-the-dip opportunity right now.

If you’re on the hunt for income, look to CIBC

Canadian Imperial Bank of Commerce (TSX:CM)(NYSE:CM) has boasted one of the best dividend yields of its peers in recent years. The fifth largest of the Big Six Canadian banks released its second-quarter results on May 28. Shares of CIBC were down 1.91% in early afternoon trading on Friday, May 29. The stock has dropped 15% in 2020 so far.

Like its peers, CIBC struggled mightily in the second quarter. Its second-quarter profit fell 71% year over year to $392 million. It reported adjusted earnings per share of $0.94, which fell far short of analyst expectations. Meanwhile, its set-asides for loans erupted to $1.41 billion compared to $261 million in Q2 2019. Regardless, CIBC remains confident in its path forward. The bank still boasts an immaculate balance sheet, making it well equipped to weather this financial storm.

Earlier this year, I’d recommended that investors look to buy CIBC at a discount. Bank stocks have been hit hard this spring, which has generated some attractive buying opportunities. Shares of CIBC last possessed a favourable price-to-earnings ratio of 9.7 and a price-to-book value of one. Moreover, the bank announced that it would maintain its quarterly dividend payout of $1.46 per share. This represents a tasty 6.5% yield.

Bank stocks are not the only great option for investors right now…

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More reading

• 2 Regional Canadian Banks Far Cheaper Than the Big Six
• Is 6.5%-Yielding Canadian Imperial Bank of Commerce (TSX:CM) Stock a Buy?
• TFSA Investors: How to Earn $410 in Monthly Income and Pay Zero Taxes to the CRA
• Top TSX Financial Stocks for June 2020
• Buy And Hold This 1 High-Yield Dividend Stock for at Least 10 Years

Fool contributor Ambrose O’Callaghan has no position in any of the stocks mentioned.

The post ALERT: 2 Super-Cheap Bank Stocks to Buy Today appeared first on The Motley Fool Canada.

Forget Air Canada (TSX:AC) and Airlines: Buy This 1 REIT Stock Instead

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The coronavirus pandemic pulled the rug out from under airline companies. Air Canada (TSX:AC) was one of the TSX’s stellar performers in 2019 and the past decade. This year, however, Canada’s flag carrier is operating on less than 10% capacity and doing cargo flights only. Pretty soon, the stock price could drop to below $10.

If you have the appetite to invest, cast out airline stocks and consider Summit Industrial (TSX:SMU.UN) instead. This real estate investment trust (REIT) will deliver high, not zero, returns.

Fading glory

Air Canada’s first-quarter 2020 earnings results were understandable. Business screeched to a halt when the government announced border closures and travel restrictions. COVID-19 paralyzed domestic and international air travel.

Air Canada was down on its knees. The impact of the health crisis is so devastating. After 27 consecutive quarters of year-over-year operating revenue growth, the company is suddenly looking bankruptcy in the eye. Its operating loss ballooned to $433 million versus $127 operating income in the same quarter in 2019.

Apart from the significant financial damage to the company, 16,500 employees lost their jobs. Fortunately, the displaced workers will remain on the payroll from March 15 to June 6, 2020. Air Canada availed of the Canada Emergency Wage Subsidy (CEWS) to make rehiring possible.

The latest from Air Canada is the launching of a public offering for about $500 million worth of Class A and Class B voting shares. The company hopes to raise $1 billion to bolster its cash position and provide more flexibility to manage the health crisis.

Booming REIT

In contrast to Air Canada, Summit Industrial reported solid operating and financial performance for the first quarter (ended March 31, 2020). This $1.3 billion REIT had sterling results in crucial metrics compared with the same period in the prior year.

Revenue increased by 37.7%, while the occupancy rate was 98.4%. Summit’s average lease term is 5.3 years, with 1.6% annual contractual rent escalations. Because of the increase in revenue, operating growth, and robust operating performance, net rental income grew by 39.6%.

The focus of Summit is light industrial and other properties. It has nine newly-acquired light industrial properties with a total leasable space of 746,903 square feet.

Summit paid $43.6 million in maturing mortgage debt and secured a new $300 million unsecured revolving credit facility to be more financially flexible. The available cash-on-hand is $200 million, while its pool of unencumbered assets is worth $635.3 million.

Unlike Air Canada, Summit is generating revenue despite the pandemic. The REIT was able to collect about 96% of rent due in April, and around 87% of May rents to-date. Some tenants signed rent deferral agreements.

The record results tell you that Summit Industrial is a screaming buy. You can be a quasi-landlord by purchasing this REIT at $10.31 per share. But the real takeaway is the 5.45% dividend yield.

Different futures

Air Canada will be away from the limelight in 2020. A near-term comeback is close to impossible. Summit Industrial would see growth with the rising demand for industrial properties. Logistics companies and e-commerce retailers will need more delivery take-off points.

Speaking of Air Canada’s future…

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More reading

• Air Canada (TSX:AC): Slow Recovery or Another Fall?
• Could Air Canada Make You a Millionaire?
• Forget Air Canada (TSX:AC): This Airline Stock Is at All-Time Highs!
• Air Canada (TSX:AC) Stock: Was Warren Buffett Wrong to Sell All Airline Stocks?
• Invest $1,000 in 3 Top Stocks and Watch the Magic

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool recommends SUMMIT INDUSTRIAL INCOME REIT.

The post Forget Air Canada (TSX:AC) and Airlines: Buy This 1 REIT Stock Instead appeared first on The Motley Fool Canada.

$10,000 Bull Trap? Why Bitcoin Price Is Now Likely to Pull Back

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Bitcoin price is up 25% for the month of May, but is a pullback now imminent?

Soar Above Coronavirus With These 3 Canadian Growth Picks

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When many investors think of the TSX or Canadian stocks, the first thing that comes to mind may be energy, or financials, or materials stocks. This makes sense, as these three sectors are central to the Canadian economy and drive domestic stock market performance. Innovation and technology are often ignored.

This is due, in part, to a lack of high profile names aside from Shopify Inc. In this article, I am going to highlight three non-Shopify growth plays for investors to consider.

Constellation Software

Constellation Software (TSX:CSU) is a new company that has ridden the wave of technology supremacy to this point. Compared to other software-as-a-service (SAAS) businesses in the tech sector, Constellation has a relatively sticky revenue stream. This company has large clients, including the Canadian government. Further, Constellation has a growth profile most companies would die for.

Constellation has grown mostly through acquisition. We could see this track record of accretive acquisitions continue in the near term. Companies will continue to be deeply discounted due to pessimism around deteriorating market conditions. There are some analysts who have pegged Constellations’ growth potential for earning around 25% a year on a compounded annual growth rate (CAGR). This makes Constellation an excellent long-term buy-and-hold growth play on any future dips.

Lightspeed POS

For those who believe the economic recovery post-Covid-19 will be of the U-shaped variety, Lightspeed POS (TSX:LSPD) is a high-risk, high-reward way to play growth in the medium term. Being in the business of payment and point of sale solutions for small and medium sized enterprises (SMES), Lightspeed’s sensitivity to economic events affecting SMESs, such as the coronavirus pandemic, makes it a prime candidate for a V-shaped rally trade.

I remain highly concerned about permanent long-term damage arising from this impending recession. But for those who are more bullish on a quick recovery, Lightspeed is a potentially lucrative trade at these levels. The company has recently completed a financing to shore up its balance sheet.

In addition, the company has done a lot of work on updating its POS systems to handle take-out orders. This strategic pivot combined with low monthly fees relative to other expenses make this company’s product “stickier” than other highly sensitive fixed costs that SMES will be focused on cutting, in order to stay alive.

Open Text

Another Canadian software company, Open Text Corp. (TSX:OTEX), is a great option for investors seeking high growth at a reasonable price. This company has continued to report strong numbers despite recent events, due to the continued strength in the secular trend of cloud computing.

If anything, Open Text is one of the few companies out there that could grow out of this pandemic. This feat seems nearly impossible for every other sector. The company’s recently announced partnership with Amazon Web Services makes me even more interested in Open Text’s growth profile.

In terms of Canadian technology growth options on the TSX, Open Text has become one of my top picks of late. The company’s compounded annual revenue growth of 14% is approximately triple that of the TSX. Additionally, the revenue streams for Open Text come mainly (approximately 90%) from outside Canada, providing Canadian investors with geographical currency arbitrage and diversification.

Stay Foolish, my friends.

The 10 Best Stocks to Buy This Month

Renowned Canadian investor Iain Butler just named 10 stocks for Canadians to buy TODAY. So if you’re tired of reading about other people getting rich in the stock market, this might be a good day for you.
Because Motley Fool Canada is offering a full 65% off the list price of their top stock-picking service, plus a complete membership fee back guarantee on what you pay for the service. Simply click here to discover how you can take advantage of this.

Click Here to Learn More Today!

More reading

• Open Text (TSX:OTEX): You Can Buy and Hold it Forever
• Is White-Hot E-Commerce Stock Lightspeed POS (TSX:LSPD) Still a Buy After Soaring 177%?
• TFSA Investors: Where to Invest $6,000 Right Now?
• 3 Top Growth Stocks to Buy With $1,000
• 3 Top TSX Stocks That Can Make You Rich!

Fool contributor Chris MacDonald has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of and recommends Constellation Software, Shopify, and Shopify. The Motley Fool owns shares of Lightspeed POS Inc. The Motley Fool recommends OPEN TEXT CORP.

The post Soar Above Coronavirus With These 3 Canadian Growth Picks appeared first on The Motley Fool Canada.

2 Regional Canadian Banks Far Cheaper Than the Big Six

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Not to knock the Big Six Canadian banks, but the underrated regional banks such as Canadian Western Bank (TSX:CWB) and Laurentian Bank (TSX:LB) are now trading at very steep discounts to book value after the COVID-19 crash.

The Big Six are praised for their impressive capital ratios and stellar financial flexibility, which is a heck of a lot better than prior to the Financial Crisis. But it’s worth noting that Canada’s regional banks also are on relatively sound footing. I think their capital ratios are more than worthy of your investment dollars, even at these unprecedented depths.

The regional banks do lack the geographical diversification of their bigger peers. But I’d argue that a steep discount on a regional bank stock may more than make up for it. If the price is right, every stock, even those that are less ‘wonderful,’ can be attractive buys.

Consider the following regional Canadian banks if you’re looking for deep value beyond the Big Six.

Canadian Western Bank

As you may have guessed from the name, Canadian Western Bank is primarily focused on the Western Canadian market. With considerable exposure to Alberta, CWB has been under pressure ever since oil prices plunged back in 2014.

After the coronavirus-induced oil demand shock, oil prices fell to new lows (briefly falling into the negatives), and CWB stock imploded. It fared far worse than its Big Six peers during the February-March crash. The stock lost over 52% of its value before posting a partial recovery to $23 and change.

The bank has its fair share of oil and gas (O&G) loans, and because of this, the stock has traded at a widening discount to other banks. But of late, I think the valuation gap has widened too far. I think value hunters can bag a huge bargain with the heavily out-of-favour regional stock, as oil gradually looks to normalize.

CWB stock sports a bountiful 5% yield and trades at a mere 0.8 times book.

Laurentian Bank

If you seek an even larger discount, Quebec-focused regional bank Laurentian may be the horse to bet on. Its shares are currently off 50% from all-time highs. The bank stock trades at 0.6 times book, but does come with a tonne of baggage.

In my last piece on Laurentian, I warned investors against the added risks. The capital ratio, while certainly not abysmal, leaves a lot to be desired relative to its peers. Just over a year ago, Laurentian found had a bit of trouble with its mortgage book and the stock has struggled to break through the $46 ceiling of resistance ever since.

“The bank found itself in a ‘mini mortgage crisis’ a while back, and until now, management has failed to show that it’s able to keep its expenses in check.” I wrote in that earlier piece, urging investors to take a rain check on the name. “As the bank moves ahead with its business model and strategy shake-up, there’s also the potential for other issues to arise should management fail to execute amidst the dire macro environment.”

Which is the better regional Canadian bank to buy?

To this day, there’s still too much baggage, and far too much uncertainty to really tell if Laurentian Bank is actually ‘undervalued,’ even at today’s unprecedented depths. As such, I’d pass on the name and its 8.6% yield in favour of Canadian Western Bank, which I believe has more upside.

If you’re looking for opportunities in this uncertain market, I’d encourage you to consider the following

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada‘s market-beating team has just released a brand-new FREE report revealing 5 “dirt cheap” stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
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More reading

• ALERT: 2 Super-Cheap Bank Stocks to Buy Today
• Did Warren Buffett’s Luck Finally Run Out?
• Top TSX Financial Stocks for June 2020
• Earn $1,155 in Dividend Income That the CRA Can’t Touch
• Does Size Matter When It Comes to Investing?

Fool contributor Joey Frenette has no position in any of the stocks mentioned.

The post 2 Regional Canadian Banks Far Cheaper Than the Big Six appeared first on The Motley Fool Canada.

Bitcoin Rising, Satoshi Discoveries, & Google Enters the Race: Bad Crypto News of the Week

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Check out this week’s Bad Crypto News

Pot Stocks Are Surging: Best Buys in This Risky Sector

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Cannabis stocks have been on a tear since their March lows.

The sector is far outpacing the broader market.

While the S&P 500 Index is up 35% and the tech-heavy Nasdaq composite index has risen 37% since March, the Horizons Marijuana Life Sciences Index Fund (HMMJ.TO) has skyrocketed 63% from its low.

If you invested $1,000 in HMMJ 11 weeks ago, you’re sitting on $1,630 now:

This fund holds dozens of marijuana stocks, including growers, pharmaceutical companies and more.

Exchange-traded funds (ETFs) like HMMJ are a great way to get a snapshot of a sector. And if you want exposure to the industry without spending hours analyzing stocks, HMMJ and other cannabis ETFs are an easy way to invest.

But here’s the thing: If you had an expert doing the heavy lifting for you — picking out the three or four best stocks of the bunch — you’d be doing even better.

For instance, Real Wealth Strategist Editor Matt Badiali has identified the top four cannabis stocks in his newsletter.

Bankruptcy Risks Abound

The reason we recommend you invest with expert advice is that cannabis can be perilous.

If you decide to invest on your own — without the help of an expert — pot stocks can be high-risk.

Take, for example, a company Matt discussed in his Marijuana Market Update on Wednesday: Green Growth Brands Inc. (GGB.CN).

In January 2019, Green Growth attempted a hostile takeover of Canadian cannabis producer Aphria Inc. (NYSE: AHPA) with a bid of C$2.5 billion (US$2.06 billion). Aphria rejected the bid a month later because it said Green Growth undervalued the company’s operations.

The takeover bid got investors’ attention, though. In January 2019, Green Growth’s stock traded for over C$6.

It continued to fall from that high, plummeting to C$0.47 per share by the end of 2019.

Last week, the company filed for bankruptcy.

As Matt put it: “If you held shares in that one, that money went to heaven.”

Green Growth is the most recent cannabis bankruptcy in a string that includes CannTrust Holdings Inc. and James E. Wagner Cultivation Corp.

Expert Advice is Key

I asked Matt to sum up what makes cannabis stocks so risky. He told me how, with the right guidance, the recent rise is just the start of where the best stocks in the business are going.

Here’s what he said:

Cannabis is a brand-new industry. Many of these companies are learning how to build out their businesses as they go. Unlike an established industry, such as clothing or real estate, cannabis has to build out from the farms all the way up to retail.

There are a million ways these companies can misstep. And investors who don’t know the signs will pay the price. I still hear from folks looking for some way to recover cash that they lost in bankruptcies like CannTrust and Green Growth Brands.

However, that risk is also our potential reward. I remember when energy drinks just showed up on the scene. They were a marginalized beverage. They marketed to young people and alternative markets like skiers and thrill-seekers. They found a niche away from traditional soft drinks…

And Monster Beverage (Nasdaq: MNST), the maker of Monster Energy and other brands, was a huge winner. Its shares were less than $1 each in early 2005. Today, they trade for more than $70. That’s a 6,900% gain. And I believe cannabis stocks can and will follow a similar path.

However, while Monster was far and away the best performer in public energy drink makers, there will be many winners in cannabis.

It takes effort to avoid putting your hard-earned money in the next CannTrust or Green Growth Brands. A little expert advice could save you a fortune.

For less than the cost of a cup of coffee each month, you can get access to Matt’s Marijuana Millionaires special report, which details the top cannabis stocks that are set to skyrocket — as well as his continued guidance on navigating the cannabis sector and several others for the next year.

You can learn more here.

Finally, we have more great content to share with you.

2 More Youtube Videos

John Ross’ new 13-minute Reading Tea Leaves video, “Vaccine Race Intensifies for Novavax Inc. (Nasdaq: NVAX).”

And Alpha Investor Report Editor Charles Mizrahi’s eight-minute video, “Dump These 2 Sick Stocks: Buy This Healthy Stock Now.”

On Monday, Matt Badiali will reach out to tell you about a recession-proof group of stocks you should buy right away.

Stay tuned!

Good investing,

Kristen Barrett

Senior Managing Editor, Winning Investor Daily

 

Invest in COVID-19 Vaccines the Smarter, Safer Way

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What happened with Moderna Inc. (Nasdaq: MRNA) shows just how tough it can be to invest in biotech companies during a pandemic.

On May 18, the firm’s shares soared 20% on news that it had begun phase 1 trials of a potential COVID-19 vaccine.

However, since then, unexpected side effects, company executives dumping their shares and other issues have raised concerns about the vaccine.

Not to mention that Moderna is a relatively new company without a single product on the market yet.

In a little more than a week, its stock price fell from $80 to $52 — a 35% plunge.

The Moderna example shows that you can lose a lot of money quickly by betting on the wrong biotech firm.

But there’s a better, safer way to invest in biotech right now: the “picks and shovels” companies such as West Pharmaceuticals Services Inc. (NYSE: WST).

WST specializes in making syringes and other injectors. Its products will be essential for delivering a COVID vaccine when we eventually have one that works.

Wall Street seems to love this stock, as its shares are up more than 60% since March 23. And as we get closer to a vaccine, WST will go even higher.

Brian Christopher recommended WST in his April 8 article, noting that it has increased its dividend payouts for 27 years in a row.

I asked Brian to share his thoughts on WST’s recent surge, and how readers should approach buying it.

 

WST Has a Great Future — but Be Patient

By Brian Christopher

What a move, eh?

WST jumped as much as 25% above its February high.

But, that was a huge move in a short period and it’s beginning to retrace a bit.

After closing above $218 on May 18, shares dropped to $201:

 

WST Soared in April and May Before a Small Retreat

A prospective investor should respect that pullback. Wait to see if shares continue their current uptrend before establishing a position.

The company has a great future, but there’s no need to rush to buy shares when you can be patient and get a better deal.

And if you bought WST when I recommended it on April 8 — congratulations! You’re already up more than 25%, with even bigger gains ahead.

— Brian

 

As you can see, WST is an awesome opportunity. However, there’s an even better way to profit from the race for a COVID-19 vaccine.

In fact, Jeff Yastine is confident that even a small investment of a few hundred dollars in this company could turn into a massive windfall in the coming months.

That’s because this biotech firm has been at the forefront of COVID-19 testing and research. And believe it or not, its stock is still undervalued right now.

It won’t be that way for long, though.

In a brand-new presentation, Jeff explains why this stock will soar like no other stock has done before.

Click here to watch it now.

Regards,

Jay Goldberg

Assistant Managing Editor, Banyan Hill Publishing

Canada Revenue Agency: 3 Important Tips for the 2020 Tax Year

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The final deadline for income tax filing is dead ahead on June 1, 2020. This has been a whirlwind year for taxpayers, and it will be up to the Canada Revenue Agency to sift through the wreckage. Fortunately, the 2019 tax year will not present the same challenges. The same goes for Canadian taxpayers. With the 2019 tax year about to be in the rear-view mirror for most Canadians, now is a good time to think about how to tackle 2020.

Canada Revenue Agency: Be careful with CERB payments

Earlier this month, I’d asked whether changes could be coming to the Canada Emergency Response Benefit (CERB). Over eight million Canadians had received payments for the CERB program by the beginning of May. However, the program is still only set to stretch for four months in order to provide financial relief to those in need.

The Canada Revenue Agency has said that it will conduct a massive review of applicants in 2021. This is expected to be a long and arduous process. However, those who have failed to meet eligibility could be subject to stiffer-than-usual penalties. Canadians who have opted for the CERB should exercise caution and make sure they meet eligibility.

For those whose are looking for alternative ways to churn out monthly income, there is Shaw Communications. Telecoms have seen usage rates soar in this crisis, so Shaw is a stable bet for investors in 2020. The stock last paid out a monthly dividend of $0.09875 per share. This represents a strong 5.1% yield.

Expect a return to normal

The federal government has introduced radical programs like the CERB in 2020, while also providing other means of financial relief to taxpayers. This pandemic has sparked the worst economic crisis since the Great Recession. One of the ways the Canada Revenue Agency responded was to extend the filing date for Canadians for the 2019 tax year. However, for those who are expecting credits and other breaks, it may be wiser to file early.

Canadians should not expect this same leniency for the 2020 tax year. On the contrary, experts expect that governments will look to aggressively make up lost revenue due to the COVID-19 pandemic. A return to normalcy could also bring a tax crunch.

Take advantage of existing programs

New Canada Revenue Agency programs like the CERB have provided big relief when citizens needed it most. However, there are existing programs that can also be a huge help to taxpayers. When this year began, I’d focused on changes to the Basic Personal Amount (BPA).

The federal Liberals vowed to bring the BPA to $15,000 by 2023. This mechanism allows for Canadians to pay no federal income tax up to a certain amount to start the year. In 2019, an individual taxpayer can earn up to $12,069 before paying any federal income tax.

Canadians should not forget the benefits of existing registered accounts either. The Tax-Free Savings Account (TFSA) can provide fantastic flexibility for those seeking growth and income. Going back to Shaw Communications, a $20,000 investment could net a TFSA investor roughly $85/month in tax-free income. That is a very solid boon to rely on in the long term.

The 10 Best Stocks to Buy This Month

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1 Underrated Dividend Stock I Just Had to Buy This Month

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It’s the season of buying dividend stocks. March’s market crash crippled many stocks and that’s created some amazing deals along the way. Not only did the crash give investors the opportunity to secure some low prices but it also sent dividend yields soaring in the process. That’s why now is the perfect time to get in and buy a dividend stock because when the markets fully recover, these deals will be long gone.

The idea that you can easily get a top five bank stock at a dividend yield of more than 5% per year is incredible. They’re low-risk investments, they grow, and they’re great long-term buys. But from a risk standpoint I can understand not getting into financial stocks right now, especially since they could go lower amid a recession.

One of the safest high-yielding stocks out there right now

I didn’t buy shares of a bank stock. Instead, I took the opportunity to be a little greedy and lock-in even better yield, while at the same time trying to minimize my risk. That’s why I invested in True North Commercial Real Estate Investment Trust (TSX:TNT.UN).

The stock is down more than 25% in 2020. Investors are selling off real estate stocks out of fear that rent payments won’t be collected and that it will put their dividend payments in jeopardy.

But True North isn’t your average real estate investment trust. This is a stock I’ve been eyeing because of its stability. Not only does it have diversification with properties across the country, but its lead tenants are the most stable tenants you’ll find anywhere.

True North counts the federal government as a client, in addition to multiple provincial governments as well. The company says that about 35% of its revenue comes from federal and provincial governments and another 41% comes from credit-rated tenants that it says are “well capitalized.”

The company released its first-quarter results of fiscal 2020 on May 5. And with an occupancy rate of 97%, revenue of $35.3 million was up 37% from the prior-year period. True North’s funds from operations per share were $0.15 and in line with how the company did last year.

There were no red flags in the first quarter. What sealed the deal for me, however, was when on April 22 the company announced that it collected 99% of its rent for the month, confirming the stability of the REIT.

A double-digit dividend that can generate significant income

True North’s monthly dividend of $0.495 currently yields around 11% per year. It’s an incredible payout that combined with the stock’s stability made it a no-brainer to buy on the dip. Even a $12,000 investment into True North at that yield would be enough to generate $110 per month in dividend income.

And, if you hold the stock inside of a Tax-Free Savings Account (TFSA) that’s a solid stream of income that you can count on every month that won’t be taxable.

True North is a solid buy that gives investors a good mix of value and dividends. It’s a great long-term hold that can be helpful in supplementing your income during these challenging times.

The 10 Best Stocks to Buy This Month

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Fool contributor David Jagielski owns shares of True North Commerical Real Estate Investment Trust

Bitcoin Google Interest Mimics $10K Price Run as ‘Halving Hype’ Fades

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Bitcoin (BTC) interest is hitting levels that last appeared during its March crash recovery as hype over the halving finally fades.

According to the latest data from Google Trends, as of May 30, search interest was back to the same position as in mid-April. At the time, BTC/USD jumped from $6,800 to over $10,000 over the next three weeks.

BTC ditches “halving hype” 

Google Trends shows that overall interest involving Bitcoin has declined rapidly since the halving on May 11.

As Cointelegraph reported, it was this event that triggered an uptick in mainstream interest, coming amid continued economic uncertainty worldwide. 

The price run from $6,800 topped out just days before the halving date, while markets conversely did not see a “post-halving dump” after miner rewards were cut by 50%. 

Three weeks later, the mood appears to be returning to normal as various indicators point to the start of a new bullish phase for Bitcoin.

Worldwide Google search interest for “Bitcoin.” Source: Google Trends

Markets go neutral

Signs of settling down are apparent in tools such as the Crypto Fear & Greed Index, which measures market sentiment using a basket of factors. 

Having shot up from “extreme fear” to “greed” along with price, the Index now appears to be stabilizing in “neutral” territory. 

Along with that, exchange balances remain at their lowest since the price bottom in December 2018, potentially a further sign that investors do not intend to sell in the short term. 

Crypto Fear & Greed Index 3-month chart. Source: Alternative.me

Zooming out, as Cointelegraph noted this week, analyst Positive Crypto believes that in fact, the entire period since BTC/USD’s all-time highs in 2017 has been a “consolidation structure.” Lasting almost 900 days, Positive Crypto this week said that it is time for the trend to break.

At press time, Bitcoin was circling $9,500, a key focal area over the past month.

Market Sentiment Is Your Key to Getting Rich

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The most important investing lesson I’ve learned can be summarized by Berkshire Hathaway Chairman Warren Buffett’s old adage:

Be fearful when others are greedy and greedy when others are fearful.

This couldn’t be more true today.

Huge gains are made by investing when market sentiment is at an extreme low.

One way to measure sentiment is by paying attention to the Volatility of Volatility Index (VVIX).

The VVIX is a measure of the volatility of the S&P 500 Index. It indicates how fast market sentiment changes.

Historically, this indicator has provided strong buy signals, and those that followed were rewarded handsomely.

The chart below shows the relationship between the VVIX (white line) and S&P 500 Index (blue line):

When the VVIX Spikes and Then Begins Falling the S&P 500 Index Rallies

(Source: Bloomberg)

This is a pattern that repeats itself time and time again.

Recently, we witnessed the COVID-19 sell-off that occurred at an unprecedented rate.

In about a month, the S&P 500 Index fell by 35%, and the media was calling for more losses.

During this time, the VVIX spiked 119% — reaching its highest level ever. Market sentiment had hit rock bottom.

Exactly one week after the VVIX peaked, a new bull market was born.

Investors who capitalized on this buy signal have already made huge profits.

The S&P 500 Index is up 38% since March 23. And according to the VVIX, it looks like there are more gains ahead.

Count on the VVIX Indicator During Market Chaos

This isn’t the first time this has happened in recent memory.

The same thing occurred in 2018.

Investors who bought the market bottom when the VVIX began to fall made great gains. After a year, the S&P 500 Index had increased by 37%.

As you can see, market sentiment is important. That’s why it’s one of the many indicators Ian King and I follow in our Automatic Fortunes service to determine the best profit opportunities for our readers.

Regards,

Steve Fernandez

Research Analyst, Automatic Fortunes

2 Sectors Ignite Bull Market (We’re Far From 2008)

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Story Highlights:

• Housing is getting an America 2.0 upgrade. Our exchange-traded fund (ETF) is killing it — up 90% so far!
• Why movement in the “penny stock” of crypto is a bullish sign for bitcoin.
• Bitcoin’s creeping closer to our prediction. When do you think it will hit $20K?

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It’s time to call it.

The doomsday naysayers were WRONG. This is not 2008.

And here’s why.

Each week, a different America 2.0 sector breaks out higher.

Take the cornerstone of our American economy: housing.

Last week, our Bold Profits Daily homebuilding play — iShares U.S. Home Construction ETF (BATS: ITB) — was up by more than 14%.

This was one of the hardest-hit sectors in March. And it sparked the 2008-repeat rumor to spread.

But it never happened.

Since bottoming out on March 18, ITB has rallied by more than 90%!

Demand for homes has been remarkable considering the circumstances.

Yes, the process of buying a home has changed. But the change has been a great shift to America 2.0.

People are using new homebuying technology.

Online platforms like Redfin and Zillow have reported incredible news this month.

Zillow’s online 3D home tours grew by 525% between February and April, and Redfin reported that homebuying demand is now higher than it was before the lockdowns:

The great news kept coming this week: more new homes were sold in the U.S. in April than in March.

Specifically, 623,000 new homes were sold across the country last month, crushing the estimate of 490,000.

Considering that most states were still in lockdown for much of April, the fact that such a huge amount of homes were sold shows just how much demand there is.

America 2.0 is in full swing, reshaping our economy. To participate in the housing boom: Buy iShares U.S. Home Construction ETF (BATS: ITB).

There’s more growth — and gains — ahead.

“Penny Stock” Crypto — Bullish for Bitcoin

Something interesting is happening in the crypto world: lots of obscure “altcoins” are skyrocketing seemingly out of nowhere.

These are the crypto equivalent of penny stocks.

They have little to no long-term investors and are driven by sudden bursts in volume which can rapidly take them up hundreds of percent.

I believe this rally in altcoins is actually a bullish sign for bitcoin.

You see, when investors are willing to put their money into the riskiest coins, it shows that there’s a lot of confidence in the crypto market in general.

This is just like the stock market; one of the most bullish signs you can see is small-cap stocks steadily going up.

Another reason this is bullish for bitcoin is that most of these tiny altcoins are denominated in bitcoin — rather than the dollar or any other fiat currency.

That means that people have to buy bitcoin to buy into the altcoins, and when they take profits, they’ll be putting money back into bitcoin.

We’ve also seen the demand for “stablecoins” continue to grow.

On many exchanges, the easiest way to buy large cryptos like bitcoin and ethereum is by using stablecoins, which are created to keep a value of $1.

The most popular stablecoin is tether. And investors are currently loading up on it.

The black line in the chart below shows the number of total Tether transactions per day, and it just made an all-time high this past Monday:

Since tether stays at $1 all the time, investors aren’t buying it just to hold onto it. They’re buying it to spend it on cryptos.

So, the fact that tether transactions are making all-time highs is a great sign.

Why It Pays to Be a Bitcoin Bull

Institutional demand also continues to soar for bitcoin.

Crypto funds like Grayscale now holds over 350,000 BTC. And crypto lending platforms like Celsius now has over 55,000 BTC.

Smaller buyers are also fueling demand, as the number of addresses with balances of one or more bitcoin have reached an all-time high of 817,806:

What’s impressive about this demand is that retail and institutional buyers are now substantially more invested in bitcoin than they were at its 2017 peak.

And as you can see in the chart above, demand increases with price; this is why the number of addresses went from 600,000 to 720,000 as the price of bitcoin went up 10 times from $2,000 to $20,000.

So, as bitcoin continues to move higher, I expect it to fuel demand even more, which in turn will fuel the price.

We’re getting closer and closer to bitcoin $50K prediction.

Today, bitcoin’s just a pop away from $10K post-halving. So I want to know:

Paul has been calling it for a while now. This is not even close to 2008. In fact, we’ve seen an “out with the old” clearing to make way for America 2.0.

We’re entering the greatest bull market of our time … and these two sectors are going to ignite the boom.

Regards,

Ian Dyer

Editor, Rebound Profit Trader

Why I Invested $3,000 on This Little-Known Emerging Market Stock

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Last year, I invested $1,000 in a little-known emerging market stock. During this crisis, the stock was severely beaten down. So, I doubled down and plunged another $2,000 into it. The stock is Fairfax India Holdings (TSX:FIH.U), and it’s probably one of the safest bets in my portfolio. Here’s why. 

Emerging market growth

Although the economy has hit a rough patch, India’s long-term growth prospects remain as bright as ever. Much like the U.S., India’s growth is driven by the consumer. Domestic consumption has been growing at a relentless pace and is likely to hit warp speed over the next few years. 

The key driver is India’s favourable demographics. Half of the nation’s population is younger than 27 year today. Only 3% of the population qualifies as “middle class.” Coupled with the fact that the population is tech savvy, well educated, and cheaper to higher than most counterparts, average income is expected to quadruple by 2030. 

India’s gross domestic product, meanwhile, could surge from US$2.8 trillion today to $5 trillion by the end of the decade. 

Portfolio

Veteran investor Prem Watsa got involved in India’s growth story in 2015. Since then, he has created a portfolio of Indian stocks that are at the apex of this consumption growth story. Fairfax India holds major stakes in India’s largest stock exchange, banks, and airports. 

Over the past five years, Watsa has deployed US$5 billion into Indian stocks through Fairfax India. Over the next five years, he intends to double that investment. He’s probably seeking out distressed assets and undervalued stocks listed in Mumbai right now. 

However, Canadian investors seem to have overlooked this intriguing story. 

Valuation

As with any investment holding company, it’s easy to figure out Fairfax’s intrinsic value. The company’s book value per share is US$14.38, while the stock trades at US$7.46. In other words, the market price of this emerging market stock is half of book value.

It’s worth noting that this book value is probably understated as well. For example, Fairfax India holds a majority stake in the National Stock Exchange company, which is private. When the company is eventually listed, it could unlock a lot more value and be marked up on Fairfax’s books. 

Similar, private holdings such as Bangalore International Airport could be worth a lot more than their marked-to-market price on the company’s books.  

In short, Fairfax India is probably one of the most undervalued opportunities on the Canadian market right now. In fact, there’s an ongoing buyback program that signals this undervaluation. 

Bottom line

Emerging markets like India have been battered by the ongoing global economic crisis. Unlike their developed counterparts, India can’t shore up the stock market by printing money. That’s why emerging market stocks are more fairly priced. 

Canada-based Fairfax India is probably the best way for local investors to bet on this emerging market’s long-term trajectory. The stock is trading for less than half of book value and has a robust balance sheet to survive the ongoing crisis. Keep an eye on it. 

I’ve been buying the stock since last year, and my blended cost average is $8.5. You can buy the stock cheaper than that right now and reach out to me to gloat about it if you like.

Fool contributor Vishesh Raisinghani owns shares of FAIRFAX INDIA HOLDINGS CORPORATION USD. The Motley Fool owns shares of FAIRFAX INDIA HOLDINGS CORPORATION USD.

Market Rally: Top TSX Cannabis Stocks for June 2020

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After a steep decline in 2019, cannabis investors expected the industry to see some better days this year. While there is a whole new set of challenges this year, some optimism is certainly visible for a few TSX cannabis stocks.

TSX cannabis stocks as a whole have lost around 10% so far this year. The lockdowns and stay-at-home orders worked in pot companies’ favour, resulting in higher revenues last quarter.

However, dwindling revenues amid increasing competition and a liquidity crunch have crushed many cannabis players in the recent past. To add to the woes, some fundamental challenges, like the slower roll-out of retail stores and the expansion of the black market, continue to dominate.

TSX cannabis stock that stole the focus

Aurora Cannabis (TSX:ACB)(NYSE:ACB) is one pot stock that recently stole the limelight. First, for its price, which has more than doubled since its reverse-stock-split earlier this month. And second, for its volatility. Cannabis stocks are some of the most volatile sections of the broader markets. However, Aurora stock was even more volatile this month.

Its better-than-expected quarterly earnings, acquisition of Reliva, and potential turnaround contributed to investors’ optimism. However, how all these factors play out in the next couple of quarters will be interesting to see.

Interestingly, Aurora’s entry into the U.S. cannabidiol (CBD) market with Reliva could open a new growth path for it. However, an acquisition that already has a big pile of debt, together with the U.S. FDA’s stance regarding the CBD market, are some of the factors worth pondering.

Aphria: Profitable, well-capitalized

Aphria (TSX:APHA)(NYSE:APHA) seems relatively well-placed on the liquidity and profitability fronts. In terms of financials, Aphria is ahead in the race, with linking quarters of profits. Investors should note that there are many marijuana companies at the moment that are not expected to report profits for the next several quarters.

Also, Aphria’s flourishing presence in Europe could be its growth engine for the next few years. A favourable cash position and growth prospects in the cannabis derivatives markets make Aphria an exciting bet.

Aphria stock has fallen only marginally so far this year, beating the TSX stocks at large, which has lost approximately 10%.

The biggest of the TSX cannabis stocks

Speaking of cash-rich marijuana companies, let’s not forget Canopy Growth (TSX:WEED)(NYSE:CGC). Canopy is the biggest among pot stock by market cap. Even though the company has been burning significant cash in the last few quarters, its cash and equivalents were strong at $2.5 billion as of December 31, 2019.

It will report fourth-quarter earnings on May 29. Apart from its revenue and earnings figure, its cash burn rate will decide the stock’s path ahead. Notably, Canopy Growth stock has largely followed peers, doubling since the epic sell-off in March.

Foolish bottom line

From a valuation standpoint, Aurora is trading at a price-to-sales multiple of 8 times, Aphria is close to 3 times, and Canopy is expensive at 21 times. Apart from the attractive valuation, Aphria’s strong cash position will be more comforting to investors. Clearly, it is a comparatively safe bet in a risky industry.

Many top TSX cannabis stocks have seen a consistent surge in the last few months. However, that should not be seen as the next bull rally. Some significant challenges remain for them, and stocks will continue to remain highly volatile. It remains a high-risk, high-reward game for investors and certainly not for the faint-hearted.

By the way, did you check our free report on undervalued stock picks?

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Congress Fears US Is Losing Battle to Malware and Darkweb Cyberweapons

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In a May 28 virtual roundtable before the congressional Subcommittee on National Security, International Development and Monetary Policy, witnesses and congresspeople alike feared that they are not keeping up with criminals hacking the financial system.

Criminals have better resumes than government agents

One witness, Guillermo Christensen, a partner at law firm Ice Miller, admired the cyber talent operating illegally: 

“We are always playing catch up with the criminals. […] It’s very hard to find people who are as qualified as some of these criminal hackers, frankly, to take apart their schemes and trace them.” 

Another issue is the overclassification of government information, presenting a barrier to private-sector security efforts. “The information sharing between the private sector and the public sector is very valuable but it could be better,” saft Naftali Harris, co-founder and CEO of SentiLink, an anti-fraud software company.

Fintech’s vulnerability during the pandemic

In response to a question from subcommittee chairman Emanuel Cleaver (D-MO) as to the vulnerability of fintech to hacking, cybersecurity strategist Tom Kellermann warned that the current system is vulnerable to new developments and increasingly remote workflows: 

“Financial institutions have the best security in the world, but because of telework and because of the customized malware or weaponry that are being developed in the darkweb, primarily the Russian-speaking darkweb. […] They’ve learned ways around the perimeter defense of the network security espoused by the standards of regulators around the world.”

Kellerman continued to explain that telework allows hackers easy access to well-defended financial networks via the worse-defended home systems of executives. He further called out APIs as adding another element of risk: 

“The greatest vulnerability of fintech is they build out these APIs that allow them to connect to other financial institutions as well as other fintech vendors. Those APIs themselves are being exploited left and right.”

During the hearing, Chairman Cleaver commented that “It seems that we are losing this battle.” His closing remarks were no more optimistic. “Your comments were very informative but also very scary,” the chairman said.

Cointelegraph has reported previously on the rise in scamming and hacking amid the coronavirus pandemic. Indeed, a number of new threats specifically target hospitals and healthcare facilities.

Canopy’s Cash Crash; Cyber Contract; Costco Cleans Up

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Friday Four Play: The “Roof Is on Fire” Edition

If you had the “riots and looting” square on your Revelations bingo card … today’s your day. Go ahead and cover that square up. It’s been that kind of year, you know.

And if you’re still worried about covering up that “World War III” square … don’t give up hope just yet. President Trump spoke on U.S.-China relations today, taking a hard line against Beijing’s new Hong Kong security law.

Outside of Revelations bingo, the U.S. Commerce Department reported that April consumer spending plummeted 13.6% in April. It was the largest drop since the government started to track consumer spending in 1959.

And finally, President Trump and Twitter Inc. (Nasdaq: TWTR) are locked in an online death match over free speech. I’m honestly surprised neither side has Godwin-ed this debate yet. Give it time, though. This is an internet fight, after all.

My, aren’t we just bursting at the seams with good news today?

Wait … I have some good news just for Great Stuff readers! (And no, it isn’t that I saved a bunch of money on my car insurance.)

Even amid all the carnage, Paul Mampilly found a company that he believes is set to soar 300% or more in the coming months. On Tuesday, Paul issued a broadcast covering his simple strategy that has helped him pull these double- and triple-digit winners from the market year in and year out.

(Psst, this is the “300 Event” that I was telling you about!) And it’s not too late to check out Paul’s interview covering this strategy.

Click here to see it before the video is taken offline.

And now for something completely different … here’s your Friday Four Play:

No. 1: Crushed Canopy Leaving Linton

Canopy Growth Corp. (NYSE: CGC) finally ditched its spendthrift past.

The Canadian cannabis company reported a fiscal fourth-quarter loss of C$1.3 billion, or C$3.72 per share. Most of Canopy’s loss came from a C$750 million write-down due to unprofitable spending projects. Those projects were the brainchild (brainchildren?) of former CEO and founder Bruce “Loose with the Loonies” Linton.

And if you think that’s an unfair characterization of Linton, just note that Canopy had negative cash flow of C$1.5 billion last year under his leadership.

The rest of Canopy’s problems, however, arose from falling cannabis demand. In fact, sales of “Cannabis 2.0” products such as softgels, oils and edibles fell 31% in the fourth quarter. It’s not a positive sign — especially when your main customer base is stuck at home with nothing to do but get high.

Given that the last of Linton’s heavy spending is now off the books, Canopy may indeed turn things around going forward. As such, today’s 20% haircut could be a buying opportunity.

Still, before giving it the Great Stuff stamp of approval, I’d like to see sales improve in the Cannabis 2.0 department … and overall.

No. 2: The Cost of Being Clean

We all knew that bulk toilet paper purchases weren’t enough to sustain Costco Wholesale Corp. (Nasdaq: COST) for long — but I think analysts got a little too excited about those prospects.

Costco reported fiscal third-quarter earnings last night and whiffed on both top-line and bottom-line expectations. On the bright side, sales were up 7% year over year. Same-store sales rose 4.8% and online sales spiked 65%.

In the end, however, Costco’s best efforts just weren’t enough to live up to Wall Street’s standards. Earnings came up $0.07 short of expectations, while revenue was $550 million shy of the consensus estimate.

The biggest detractor was a $283 million pretax charge “from incremental wage and sanitation costs related to COVID-19.” Aah, the hidden costs of keeping shoppers and workers safe.

Well, they’re not hidden costs — just unexpected costs. OK, they’re expected costs, just not by the geniuses who guessed what Costco would earn last quarter amid a freaking pandemic.

I have to say: Despite the company missing analysts’ expectations, Costco is among the most stable retailers to invest in as we head into whatever the economy and market throw at us this year.

It’s right up there with Walmart Inc. (NYSE: WMT), Amazon.com Inc. (Nasdaq: AMZN) and The Kroger Co. (NYSE: KR). I also hear that Target Corp. (NYSE: TGT) is on fire right now — too soon?

Editor’s Note: Predicting what stocks will do before earnings is pure speculation. That’s why earnings expert Chad Shoop waits till after the earnings dust settles … and then strikes on his “profit trigger.” Learn how you can too. Click here!

No. 3: GE’s Larry Is Very Scary

Can investors not get this through their heads? Right now, airplanes and airline travel = bad.

This will remain true until a cure or vaccine is available for COVID-19. It’s a fact that General Electric Co. (NYSE: GE) CEO Larry Culp reiterated this week — a reminder that GE shareholders didn’t want.

“GECAS, not surprisingly, is seeing a good bit of pressure here relative to customer deferrals,” Culp said Thursday. GECAS is short for GE Capital Aviation Services, i.e., GE’s aircraft financing arm.

Culp also noted that second-quarter industrial free cash flow would be between negative $3.5 billion and negative $4.5 billion. Finally, write-downs related to the company’s aviation backlog would grow in the same quarter.

This little revelation caused GE stock to drop from Robinhood’s No. 1 most-held stock to No. 2. behind Ford Motor Co. (NYSE: F). Still, No. 2 for a company that relies on the airline industry amid a pandemic?

If you’re invested in GE right now, you probably believe that the COVID-19 situation will get better sooner rather than later. Bully for you. Personally, I’m not that optimistic.

No. 4: Virtual Virus-Fighting

If Costco was among the first household-name stocks people bought for the pandemic, Zscaler Inc. (Nasdaq: ZS) might’ve been one of the last. And if any of you out there have been riding Zscaler’s 142% post-crash Zsurge, let me know … Zseriously.

(What? Adding “Z” to things isn’t hyper radical anymore? Pshh … take me back to ’95.)

Other than sounding like a knockoff shower cleaner, Zscaler just made it to the cybersecurity sector’s VIP back lounge. The golden ticket? A freshly inked Department of Defense contract.

See, most cyber defense stocks are a dime a dozen these days, with a few rare exceptions. The only difference is that, this decade, cybersecurity now has “cloud” in front of it. Ain’t that futuristic!

But the Defense Department’s contract lends some credence to Zscaler’s security chops. It proves the company can hack it at the international level against some serious threats.

At the very least, it was a cheap-enough deal. We’re talking about government contracts, after all.

Throw in some work-from-home magic, and you’ve got a cyber-security champ. Zscaler also reported that revenue shot up 40% to hit $110.5 million — and earnings more than doubled what analysts expected.

With its impressive quarter boosting the stock to all-time highs, ZS investors — whomever they may be — can go into the weekend giddy with glee.

From obscurity to … somewhat less obscurity, Zscaler proved that it isn’t your Norton antivirus, no sir or ma’am. And if you’re still paying out your hard-earned cyber cash on that “virus disguised as antivirus” … let’s talk.

Great Stuff: Solitude Is Bliss

Dear reader, between the time I click “send” and the time you read this…

I hope World War III hasn’t been declared or that the world hasn’t gone up in (more) flames … and that the daytime shoppers haven’t bought all the good toilet paper by the time I get to the store.

We sincerely hope you stay safe and well out there! And do try to have a good weekend — regardless of whatever Twitter battles wage into the wee hours! Take some time to stretch your bones and recharge. We here at Great Stuff certainly will.

And while you’re relaxing, send a message to GreatStuffToday@BanyanHill.com with any comments, questions or random tangents and diatribes. You can always hear more from us on Facebook and Twitter too.

Until next time, stay Great!

Joseph Hargett

Editor, Great Stuff