Analysts' Ideas of the Week - Expecting 50% of the U.S. Population to be Fully Vaccinated by August - Baystreet.ca
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Analysts' Ideas of the Week
Expecting 50% of the U.S. Population to be Fully Vaccinated by August
February 16, 2021
www.researchfrc.com
Page 2
Reddit Sentiment Tracker
Over the last 24 hours, the four most discussed sectors on Reddit were Cannabis,
Electric Vehicles, Cryptocurrencies, and Betting. Based on our review, we believe
electric vehicle related stocks are likely to be the biggest movers this week. Based on
our analysis of the data, we believe TSLA, AAPL, and GM look well positioned.
February 16, 2021
Company Ticker Sector Reddit Score % change (2d) YTD 1-Week 1-Year
General Motors Co. GM Auto Manufacturers 64.29% 155% -5% 55%
Apple Inc. AAPL Consumer Electronics 64.29% 2% -3% 65%
Tesla TSLA Auto Manufacturers 46.07% 8% -7% 364%
AVERAGE 78% -4% 60%
MIN 2% -5% 55%
MAX 155% -3% 65%
Indexes YTD 1-Week 1-Year
S&P 500 5% 1% 16%
Source: FRC
FRC Top Picks
The following table shows last week’s top five performers among our Top Picks,
including two cannabis, one technology, and two junior resource companies. Inner
Spirit Holdings (CSE: ISH) was up 44% WoW, and was the top
performer. Additional comments on ISH are presented later in this report.
Top Five Performers Last Week
Source: FRC
Our top picks were up 83% (on average) since the initiation of coverage vs the
benchmark’s (TSXV) 21%.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 3
Source: FRC
Performance by Sector
Source: FRC
Our complete list of top picks (updated weekly) can be viewed here.
Weekly Mining Commentary
Global equity markets continued to rally due to a decline in new cases of COVID-19 in
almost all of the hardest hit nations, and continued vaccine rollout. All the seven
indices we track reported gains (orange bars).
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 4
Source: FRC / Various
For the first time, almost all of the hardest hit nations experienced a decline in
daily new cases of COVID-19.
Source: https://www.worldometers.info/coronavirus/
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 5
11.5% of the U.S. population has received vaccinations vs 9.4% at the same time last
week. This compares to 22.5% in the U.K. (up from 17.7%). Israel is at 46%, up from
40%. The U.S. is currently administering over 1.8M doses per day, up from 1.4M in the
prior week. We estimate that 50% of the population will be vaccinated by August
2021 vs our previous estimate of October.
Base metals continued to gain strength based on the above-mentioned factors.
Gold prices were down 1.4%, and is the weakest performer (on a YoY basis) among the
mainstream metals. Gold prices typically fall when there is a decline in global
economic uncertainties. We expect prices to strengthen in H2-2021, as inflation kicks
in from a global economic recovery.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 6
Inventory levels of base metals remained flat on the LME, but increased on the SHFE
(Shanghai), providing us mixed signals.
Not surprisingly, valuations of gold producers were down 6%, while that of base
metals producers were up 2% last week.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 7
We are not making any changes to our price forecasts, but are reviewing our 2021
projections for base metals based on their continued strength.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 8
In the following section, we review companies that announced key developments in the
past week. The table below summarizes the changes we made in ratings/fair value
estimates/EPS projections of companies under coverage in this report:
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 9
Mining / Exploration
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
American TSXV: AMY $2.58 N/A Feb 11, 2021
Manganese Inc.
PR Content FRC Opinion
Attracted a former Director of Tesla for Positive – AMY’s share price is up 77% in
Central Europe (NASDAQ: TSLA) to join one week, and 465% in one month. We
its advisory board. In addition, leach tests were very pleased with the test results as
on samples collected from the U.S. AMY has significantly increased its chances
National Defense stockpile returned of obtaining commercial contracts from the
manganese recovery rates of up to 99%. U.S. government, and/or battery
manufacturers. In addition, attracting a
former member of Tesla is a major vote of
confidence on the company’s technology.
Our previous fair value estimate was based
on a 6 tpd plant. As a result of the recent
developments, we believe the company will
look to build out a larger scale plant. We are
temporarily retracting our fair value
estimate, and will update our estimate once
we have a conversation with management,
and get a better understanding of the
technology’s scalability.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Gran Colombia TSX: GCM $5.95 $11.69 Feb 16, 2021
Gold Corp
PR Content FRC Opinion
Announced that it expects to produce 200 Positive – Our 2021 forecast of 210 Koz is
– 220 Koz from the Segovia gold mine in exactly at the mid-point of management’s
2021, up from 196 Koz in 2020. guidance. 2020 year-end results are
expected next month. We are forecasting
record 2020 revenue and EPS of $393M,
and $52M/EPS: $0.84, respectively. The
current dividend yield is 2.9% p.a.,
compared to the sector average of 1.5%
(Source: FRC and S&P Capital IQ).
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 10
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Lake Resources ASX: LKE A$0.33 A$0.47 Feb 11, 2021
N.L.
PR Content FRC Opinion
Completed a A$20M bought deal Positive – LKE’s share price has more than
financing. LKE is fully funded through to doubled in the past month. Growing
the construction phase for its flagship optimism on electric vehicle metal stocks
Kachi lithium brine project. has been driving the share prices of most
juniors. We estimate that the average
enterprise value to resource ratio of LKE’s
direct comparables have increased from
US$21/t in July 2020 (which is when we had
published our previous update report) to
US$130. As a result, we are raising our fair
value estimate on LKE from A$0.16 to
A$0.47 per share.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
FPX Nickel TSXV: FPX $0.82 $1.34 Feb 11, 2021
Corp. Feb 16, 2021
PR Content FRC Opinion
Initial field tests demonstrate the potential Positive – Final results are expected in Q2-
for significant carbon capture in tailings at 2021. These initial results improve
its Baptiste project in the Decar nickel Baptiste’s attractiveness as larger
district in B.C. producers of electric vehicle metals and
battery manufacturers prefer projects with
low or zero carbon mining operations.
Metallurgical studies on Baptiste have
confirmed that the project can be a direct
feed for both stainless steel and batteries.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 11
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
ION Energy Ltd. TSXV: ION $0.64 $0.96 Feb 10, 2021
PR Content FRC Opinion
Expanded its land package in Mongolia Positive – Shares are up 36% since our
by acquiring another 19,000 ha initiating report on February 2, 2021, and
prospective for lithium brine for 100% since our introductory note on
US$0.31M. It is located 150 km from the December 16, 2020. The company received
flagship Baavhai Uul lithium brine project. Mongolia’s first ever exploration license for
ION has expanded its land package to lithium brine. Mongolia is severely under
100,000 ha. explored for lithium brine. We believe that
management’s track record in the country,
and first mover advantage, will allow them
to keep expanding their portfolio within the
country, and improve their probability of
exploration success.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Corvus Gold TSXV: KOR $2.99 $3.75 Feb 9 and 11,
Inc. 2021
PR Content FRC Opinion
Received additional positive results from Positive – Another 20 more holes are
the Mother Lode project in Nevada: planned. This, and the prior results
announced in 2020, support our assumption
➢ 204.5 metres @ 1.36 g/t, including 37.3 that the Mother Lode project has significant
metres @ 5.37 g/t & 10.5 metres @ resource expansion potential. A recently
9.99 g/t completed PEA on the NB project (10 km
➢ 110.8 meters @ 1.68 g/t & 86.9 metres from Mother Lode) had returned an AT-
@ 1.65 g/t, including 58.7 meters @ NPV5% of US$452M, with an AT-IRR of
2.47 g/t 47%, using US$1,500 per oz gold. Corvus’
current market capitalization is C$378M,
implying that the market is assigning zero
value to the Mother Lode project.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 12
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Southern Silver TSXV: SSV $0.46 $1.06 Feb 9, 2021
Exploration
Corp
PR Content FRC Opinion
Identified bonanza-grade silver Positive - These are very promising results,
mineralization on a second target within especially considering that the program is
the Mina La Bocona zone at the Cerro focused on step-out drilling for resource
Las Minitas project in Mexico. Key results expansion. Drilling is ongoing. Note that the
included: project has a resource estimate of 134 Moz
AgEq indicated, and 138 Moz inferred. We
➢ 8.0 metres averaging 1,072g/t Ag, are not in a position yet to assign a
18.8% Pb and 7.5% Zn (2,040g/t speculative resource estimate from the
AgEq), including 0.6 metres grading current drill program.
3,180g/t Ag, 58.8% Pb, and 2.3%Zn
(5,148g/t AgEq)
➢ 16.1 m down-hole (8.5m true
thickness/TT) averaging 121g/t Ag,
2.5% Pb, and 2.5% Zn (311g/t AgEq;
7.9% ZnEq), which includes 3.0 m
(1.6 m TT) grading 413 g/t Ag, 8.7%
Pb, and 9.3% Zn (1,103g/t AgEq; 28%
Zn
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Doubleview Gold TSXV: DBG $0.42 $0.47 Feb 16, 2021
Corp.
PR Content FRC Opinion
Intersected 98 m of 1.00 g/t Au Eq Positive – These values are significantly
(0.73% Cu Eq), within 222 m of 0.57 g/t higher than our preliminary resource
Au Eq (0.41% Cu Eq). estimate on the project, which is 540 Mt at
0.57 gpt AuEq. This latest hole has also
extended the Lisle zone by an additional
125 m. A maiden resource estimate is
expected in 2021. We will update our
estimate once all the drill results are
published.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 13
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Azincourt TSXV: AAZ $0.16 N/A Feb 10, 2021
Energy Corp
PR Content FRC Opinion
Pursuing a $5.1M equity financing. Neutral – Funds will be primarily used for
the East Preston uranium project in the
Athabasca Basin. Management is planning
a 10-12 hole, 2,000 – 2,500 m drill program.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Sonoro Gold TSXV: SGO $0.23 $0.32 Feb 16, 2021
Corp.
PR Content FRC Opinion
Results of 24 holes totaling 2,591 m at its Positive – SGO is expected to work on an
Cerro Caliche project in Mexico identified updated resource estimate in Q2, followed
a new zone, and extended a previously by a PEA. We are expecting a significant
known zone’s strike length. increase in the updated resource estimate.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Renforth CSE: RFR $0.07 $0.12 Feb 10, 2021
Resources Inc.
PR Content FRC Opinion
Resume drilling at its flagship Parbec Positive – Although it is too early to
gold project in Quebec. Still awaiting comment on Surimeau’s prospects, we
results from the holes completed in 2020. believe the project offers exposure to
The company also announced positive electric vehicle metals. With regard to
results from the Surimeau prospect, Parbec, we believe the company is likely to
including 0.483% Ni over 1 m, and update its resource estimate this year.
0.156% over 13 m from surface.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 14
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Falcon Gold TSXV: FG $0.10 $0.29 Feb 11, 2021
Corp
PR Content FRC Opinion
Renegotiated an agreement to acquire Positive – We believe this further diversifies
certain gold/silver/copper concessions in the company’s portfolio, which is currently
La Rioja Province, Argentina. focused on Canada. The project has
returned encouraging high-grade values of
1 m at 9.11 gpt, and 0.42m of 24.3 gpt gold,
from prior drilling. The company is awaiting
results of a recently completed drill program
at the flagship Central Canada gold mine
project in Ontario, where mineralization has
been traced from surface to a depth of over
161 m.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Colibri TSXV: CBI $0.09 $0.17 Feb 9, 2021
Resources
Corporation
PR Content FRC Opinion
Option partner, Tocvan Ventures Corp. Positive – We were pleased with the long
(CSE: TOC) reported assay results from intercepts and high-grade values. More
its Phase 1 drill program at the Pilar gold- importantly, they were step-out holes. We
silver project in Mexico. Key results will update our 150 Koz initial estimate on
included: the project once the current program is
completed. CBI is currently completing a
➢ 94.6 meters of 1.6 g/t Au, including trenching program at its flagship Evelyn
9.2 meters of 10.8 g/t Au project. The company is also planning an IP
➢ 41.2 meters at 1.1 g/t Au from 57.9 to survey.
99.1 meters, including a high-grade
interval of 3.1 meters at 6.0 g/t Au and
12 g/t Ag
➢ 24.4 meters at 2.5 g/t Au and 73 g/t
Ag from 96.1 to 120.5 meters,
including a high-grade interval of 9.2
meters at 6.3 g/t Au and 192 g/t Ag,
and 1.5 meters at 33.4 g/t Au and
1,090 g/t Ag
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 15
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
South Star TSXV: STS $0.19 $0.52 Feb 11, 2021
Mining Corp.
PR Content FRC Opinion
Pursuing private placements totaling Neutral – STS’ shares are up 90% since
$2.5M. our update report on January 29, 2021. STS
has all the required permits to advance to
construction, commissioning, and
production. The company has to raise
$7.3M to advance to production.
Management expects to secure financing,
and move to construction planning by March
2021, and commence production next year.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Braveheart TSXV: BHT $0.11 $0.42 Feb 11, 2021
Resources Inc.
PR Content FRC Opinion
Announced positive initial results for the Positive – Ore-sorting will likely lower the
application of ore sorting on stockpiled project’s OPEX estimate. Bull River can be
material at the Bull River mine project in advanced to production for just $6.5M in
B.C. CAPEX. The company is evaluating
financing options, and applying for permits
to potentially commence production later
this year.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
C3 Metals Inc. TSXV: CCCM $0.16 $0.23 Feb 16, 2021
PR Content FRC Opinion
Closed $4.34M of a $7.4M equity Positive – These funds will be used
financing. towards the recently acquired Jasperoide
project. Jasperoide is an early-stage asset
located approximately 50 km east of the Las
Bambas mine, 40 km northwest of Hudbay's
(TSX: HBM) Constancia mine, and 100 km
northwest of Glencore's (LSE: GLEN)
Antapaccay mine.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 16
Technology and Special Situations
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Kidoz Inc. TSXV: KIDZ $0.63 $1.08 Feb 16, 2021
PR Content FRC Opinion
Reported $7.2M in revenue in 2020, up Positive – Revenue beat our estimate by
58% YoY, $0.92M in EBITDA vs -$0.88M 20% due to stronger than expected ad
in 2019, and $0.14M (EPS: $0.00) in net revenues, and a significant increase in
profit vs a net loss of $14M (EPS: -$0.12) network from 100M in 2019, to 300M users
in 2019. by the end of 2020. Our EBITDA and EPS
forecasts were $0.12M and -$0.00,
respectively, and well below the actual
results. We will publish an update when the
financial statements are published.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Banxa Holdings TSXV: BNXA $3.03 N/A Feb 16, 2021
Inc.
PR Content FRC Opinion
Announced a strategic partnership with Positive – We are pleased to see the
the SatoshiLabs Group, owner of both, company adding a new client to its portfolio.
Trezor, a hardware wallet provider (stores We expect this addition to directly contribute
users’ private keys in a hardware device), to Banxa’s topline revenue. We will release
and Invity.io, a cryptocurrency exchange our initiating report on Banxa shortly.
comparison tool. The partnership will
enable users of these platforms to
purchase digital assets through Banxa.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 17
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Clean Seed TSXV: CSX $0.63 $1.14 Feb 4, 2021
Capital Group
Ltd.
PR Content FRC Opinion
Announced that its SMART Seeder MAX- Positive – We are pleased to see Clean
S units will commence operations in April Seed moving along with its product launch
on farms in multiple regions in Canada. per our estimated timeline. We are
Management also plans to hold estimating $1.1M in revenue in FY2021
demonstration events throughout the (unchanged).
spring to promote their technology to
potential clients and distributors.
Cannabis
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Inner Spirit CSE: ISH $0.32 $0.47 Feb 9, 2021
Holdings Ltd.
PR Content FRC Opinion
Announced the opening of its 75th retail Positive – We are pleased to see the
store in Canada. The latest store was company reaching another milestone. We
launched last week in St. Catharines, attended ISH’s webinar last week, where
Ontario. management disclosed their plans to have
100 stores (including 25 corporate stores)
by the end of 2021. Our revenue estimates
for 2020 and 2021 are $27M and $35M,
respectively (unchanged).
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 18
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Namaste TSXV: N $0.39 $0.55 Feb 9, 11, & 12,
Technologies 2021
Inc.
PR Content FRC Opinion
Announced that its wholly owned Positive – We are pleased to see the
subsidiary CannMart Labs Inc. has company working to grow its revenue
received a standard processing licence streams in several ways. Our current fair
from Health Canada. Management value estimate does not include CannMart
expects to have CannMart Labs Labs’ production and the potential U.S.
manufactured products in the market by market entry. We will revise our projections
the end of Q2-2021. The company also when more details are released. Our
expanded product offerings through revenue estimates for 2020 and 2021 are
CannMart.com, through partnerships with $24M and $35M, respectively (unchanged).
multiple licensed producers. Namaste
shared its plans to enter the U.S. market
as well.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
FinCanna CSE: CALI $0.15 $0.20 Feb 10, 2021
Capital Corp.
PR Content FRC Opinion
Announced that portfolio company QVI Positive – We are pleased to see stronger
Inc. is experiencing growing demand for demand for QVI. We are projecting $861k in
manufacturing services (white label revenue in FY2021/year-ended April 2022
production). QVI has been operational (unchanged).
since July 2020, and produces for 30
brands. The company also noted that it is
getting re-orders from clients.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 19
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Delta 9 TSX: DN $0.68 $1.24 Feb 9 & 10,
Cannabis Inc. 2021
PR Content FRC Opinion
Announced that its strategic partner, Positive – We are pleased to see DN’s
Oceanic Releaf, has obtained a strategic partner getting licensed, as we
cultivation license from Health Canada. believe it will help the company establish a
DN owns 5% equity in Oceanic’s 63,000 larger presence in Newfoundland and
sq. ft. facilities. DN provided guidance for Labrador.
Q4-2020 of $13.7M - $14.2M in revenue,
up 29%-34% YoY, and 5%-10% QoQ. The guidance provided by DN is almost in
2020 revenue is estimated to be between line with our $52.37M forecast for 2020.
$51.8M - $52.3M. The financial
statements will be released on March 30,
2021.
Company Ticker Current Share FRC Fair Value Date of PR:
Name: Symbol Price: Estimate:
Grown Rogue CSE: GRIN $0.34 $0.47 Feb 11, 2021
International Inc.
PR Content FRC Opinion
Announced that it is raising up to $3M Positive – We are pleased to see the
(best efforts). The funds will be used for company raising capital, as it is expanding
working capital and corporate purposes. operations through the additional capacity
acquired from Acreage Holdings in a service
agreement. We are raising our revenue
estimates for 2021 onwards, and our fair
value estimate to $0.47 (previously $0.31).
Our revenue estimate for 2020 is $4M
(unchanged), and for 2021 is $20M
(previously $10M). Management has stated
that the additional space will more than
double their indoor grow capacity in Oregon.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 20
Weekly Cannabis Commentary
Cannabis Industry Performance
February 12, 2021
Company YTD 1-Week 1-Year
Aphria Inc. 142% -1% 297%
Aurora Cannabis Inc. 47% -6% -31%
Canopy Growth Corp. 62% -7% 97%
Cronos Group Inc. 77% 1% 75%
Tilray Inc. 244% 10% 78%
HEXO Corp. 101% -8% 43%
Organigram Holdings Inc. 179% 48% 62%
The Supreme Cannabis Co., Inc. 130% 19% -6%
AVERAGE 123% 7% 77%
MIN 47% -8% -31%
MAX 244% 48% 297%
Indexes YTD 1-Week 1-Year
HMMJ 72% 2% 73%
MCAN 67% -8% 75%
XCAN 70% -12% 50%
Source: TMX Money, FRC
Over the past week, the Horizons Marijuana Life Sciences ETF (TSX: HMMJ / “HMMJ”),
the Standard & Poor’s/MX International Cannabis Index (“MCAN”), and the Standard &
Poor’s/TSX Cannabis Index (“XCAN”) generated returns of 2%, -8%, and -12%,
respectively. This week, HEXO Corp. (TSX: XESO) announced that it will acquire
Zenabis (TSX: ZENA) for $235M, to gain exposure to Europe’s cannabis market. This
acquisition reflected an EV/R multiple of 2.6x, much lower than the industry
median of 13x of large players. This acquisition is in line with our previously
stated outlook of 2021 being a year of consolidation in the cannabis sector.
Valuation of Select Canadian LPs
The following chart shows the average Enterprise Value to Revenue (“EV/R”) ratio of
the Canadian cannabis companies we track.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 21
Average EV/R (October 2019 – February 2021)
February 05, 2021 February 12, 2021
Company Ticker TEV/Revenue TEV/EBITDA TEV/Revenue TEV/EBITDA
Aphria Inc. TSX: APHA 11.9 111.4 12.0 112.8
Aurora Cannabis Inc. TSX: ACB 10.9 NM 11.3 NM
Canopy Growth Corp. TSX: WEED 40.9 NM 37.1 NM
Cronos Group Inc. TSX: CRON 112.3 NM 114.7 NM
Tilray Inc. NASDAQ: TLRY 20.7 NM 23.1 NM
HEXO Corp. NYSE: HEXO 12.1 NM 11.4 NM
Organigram Holdings Inc. TSX: OGI 8.4 NM 13.5 NM
The Supreme Cannabis Co., Inc. TSX: FIRE 5.3 NM 6.2 NM
AVERAGE 27.8 NM 28.7 NM
MEDIAN 12.0 NM 12.7 NM
MINIMUM 5.3 NM 6.2 NM
MAXIMUM 112.3 NM 114.7 NM
Source: S&P Capital IQ, FRC
The average EV/R, as of February 12, 2021, was 28.7x – a WoW increase from 27.8x.
The average EV/R, from October 7, 2019 to February 12, 2021, was 13.0x.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 22
Canadian Retail Cannabis Pricing
Province (As of 2021/2/16) Average Price per Gram Average Price per Gram THC Average Price per Gram CBD # of Products Min. Price Max. Price
B.C. $ 9.67 $ 9.77 $ 8.42 177 $ 3.53 $ 15.71
Ontario $ 9.62 $ 9.81 $ 8.08 325 $ 4.00 $ 23.98
Quebec $ 9.38 $ 9.37 $ 9.55 228 $ 4.85 $ 21.68
Alberta $ 11.36 $ 11.37 $ 11.00 336 $ 3.93 $ 22.00
N.B. $ 9.95 $ 10.19 $ 7.58 180 $ 3.57 $ 16.28
P.E.I. $ 9.75 $ 9.77 $ 9.34 165 $ 2.20 $ 23.30
Newfoundland $ 10.12 $ 10.08 $ 10.36 155 $ 4.46 $ 15.40
Yukon $ 14.98 $ 15.07 $ 13.95 12 $ 10.49 $ 16.15
N.S. $ 10.34 $ 10.38 $ 9.82 181 $ 5.36 $ 42.85
Nunavut $ 12.91 $ 13.04 $ 12.41 33 $ 5.19 $ 17.91
Northwest Territories $ 14.68 $ 14.68 2 $ 12.08 $ 17.28
Manitoba $ 11.42 $ 11.36 $ 11.62 330 $ 4.90 $ 20.43
Saskatchewan $ 12.40 $ 12.42 $ 12.07 197 4.95 38.50
CANADA $ 11.27 $ 11.33 $ 10.35
Province (As of 2021/2/8) Average Price per Gram Average Price per Gram THC Average Price per Gram CBD # of Products Min. Price Max. Price
B.C. $ 9.68 $ 9.78 $ 8.42 173 $ 3.93 $ 15.71
Ontario $ 9.68 $ 9.88 $ 8.08 319 $ 4.00 $ 23.98
Quebec $ 9.39 $ 9.38 $ 9.55 226 $ 4.85 $ 21.68
Alberta $ 11.40 $ 11.39 $ 11.39 335 $ 3.93 $ 22.00
N.B. $ 9.91 $ 10.16 $ 7.58 178 $ 3.57 $ 16.28
P.E.I. $ 9.75 $ 9.77 $ 9.49 165 $ 2.20 $ 23.30
Newfoundland $ 10.12 $ 10.08 $ 10.36 155 $ 4.46 $ 15.40
Yukon $ 14.98 $ 15.07 $ 13.95 12 $ 10.49 $ 16.15
N.S. $ 10.37 $ 10.42 $ 9.82 180 $ 5.36 $ 42.85
Nunavut $ 12.91 $ 13.04 $ 12.41 33 $ 5.19 $ 17.91
Northwest Territories $ 14.68 $ 14.68 2 $ 12.08 $ 17.28
Manitoba $ 11.42 $ 11.36 $ 11.62 326 $ 4.90 $ 20.43
Saskatchewan $ 12.47 $ 12.49 $ 12.08 191 4.95 38.50
CANADA $ 11.29 $ 11.35 $ 10.40
Source: Online Provincial Cannabis Stores, FRC
The average retail price per gram decreased week-over-week from $11.29 to
$11.27. The below chart shows Canadian retail dried cannabis flower pricing since we
initiated price coverage.
Canadian Retail Dried Cannabis Flower Pricing
Source: Online Provincial Cannabis Stores, FRC
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 23
Canadian Retail Cannabis Stores
As of February 16, 2021, there are 1,557 retail cannabis stores, a week-over-week
increase of ten stores across Canada, of which, Ontario had three, Alberta had six, and
B.C. had one.
Nationwide Store Count
Jan-25-2021 Feb-1-2021 Feb-8-2021 Feb-16-2021
Geographic Region Store Count Store Count Store Count Store Count Population Population / Store
Alberta 556 561 566 572 4,428,247 7,742
B.C. 306 306 309 310 5,120,184 16,517
Manitoba 56 56 56 56 1,379,121 24,627
N.B. 20 20 20 20 780,890 39,045
N.S. 21 21 21 21 978,274 46,584
Newfoundland 30 30 30 30 520,437 17,348
Northwest Territories 5 5 5 5 44,982 8,996
Nunavut na na na na 39,486 N/A
Ontario 389 409 426 429 14,745,040 34,371
P.E.I. 4 4 4 4 158,717 39,679
Quebec 57 60 60 60 8,552,362 142,539
Saskatchewan 45 45 45 45 1,181,987 26,266
Yukon 5 5 5 5 41,293 8,259
CANADA 1,494 1,522 1,547 1,557 37,971,020 24,387
Source: Provincial Websites, FRC
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 24
Weekly Psychedelic Commentary
Psychedelic Industry Performance
February 12, 2021
Company YTD 1-Week 1-Year
COMPASS Pathways plc -1% 4% N/A
Numinus Wellness Inc. 64% 21% N/A
Mind Medicine Inc. 36% 15% N/A
Seelos Therapeutics Inc. 158% 16% 410%
AVERAGE 64% 14% 410%
MIN -1% 4% 410%
MAX 158% 21% 410%
Indexes YTD 1-Week 1-Year
PSYK 19% 13% N/A*
*Launched on January 27, 2021
Source: TMX Money, FRC
Over the past week, PSYK generated a return of 13%. Mind Medicine (NEO: MMED)
announced a new partnership with a Swiss start-up to develop and patent next-gen
psychedelic compounds.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTPage 25
Disclaimers and Disclosure
The opinions expressed in this report are the true opinions of the analyst(s) about any companies and industries mentioned. Any
“forward looking statements” are our best estimates and opinions based upon information that is publicly available and that we
believe to be correct, but we have not independently verified with respect to truth or correctness. There is no guarantee that our
forecasts will materialize. Actual results will likely vary. Certain companies mentioned in pages 2, and 9-17 are covered by FRC
under an issuer paid model. FRC or companies with related management, and Analysts, may hold shares in some companies
mentioned in this report including Barrick, STS, PSYK, and AAPL. Distribution procedure: our reports are distributed first to our web-
based subscribers on the date shown on this report then made available to delayed access users through various other channels for
a limited time.
To subscribe for real-time access to research, visit https://www.researchfrc.com/website/subscribe for subscription options.
This report contains "forward looking" statements. Forward-looking statements regarding the Company, industry, and/or stock’s
performance inherently involve risks and uncertainties that could cause actual results to differ from such forward-looking statements.
Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of the Company's
products/services in the marketplace; acceptance in the marketplace of the Company's new product lines/services; competitive
factors; new product/service introductions by others; technological changes; dependence on suppliers; systematic market risks and
other risks discussed in the Company's periodic report filings, including interim reports, annual reports, and annual information forms
filed with the various securities regulators. By making these forward-looking statements, Fundamental Research Corp. and the
analyst/author of this report undertakes no obligation to update these statements for revisions or changes after the date of this
report.
Fundamental Research Corp DOES NOT MAKE ANY WARRANTIES, EXPRESSED OR IMPLIED, AS TO RESULTS TO BE
OBTAINED FROM USING THIS INFORMATION AND MAKES NO EXPRESS OR IMPLIED WARRANTIES OR FITNESS FOR A
PARTICULAR USE. ANYONE USING THIS REPORT ASSUMES FULL RESPONSIBILITY FOR WHATEVER RESULTS THEY
OBTAIN FROM WHATEVER USE THE INFORMATION WAS PUT TO. ALWAYS TALK TO YOUR FINANCIAL ADVISOR BEFORE
YOU INVEST. WHETHER A STOCK SHOULD BE INCLUDED IN A PORTFOLIO DEPENDS ON ONE’S RISK TOLERANCE,
OBJECTIVES, SITUATION, RETURN ON OTHER ASSETS, ETC. ONLY YOUR INVESTMENT ADVISOR WHO KNOWS YOUR
UNIQUE CIRCUMSTANCES CAN MAKE A PROPER RECOMMENDATION AS TO THE MERIT OF ANY PARTICULAR
SECURITY FOR INCLUSION IN YOUR PORTFOLIO. This REPORT is solely for informative purposes and is not a solicitation or an
offer to buy or sell any security. It is not intended as being a complete description of the company, industry, securities or
developments referred to in the material. Any forecasts contained in this report were independently prepared unless otherwise
stated, and HAVE NOT BEEN endorsed by the Management of the company which is the subject of this report. Additional
information is available upon request. THIS REPORT IS COPYRIGHT. YOU MAY NOT REDISTRIBUTE THIS REPORT WITHOUT
OUR PERMISSION. Please give proper credit, including citing Fundamental Research Corp and/or the analyst, when quoting
information from this report. The information contained in this report is intended to be viewed only in jurisdictions where it may be
legally viewed and is not intended for use by any person or entity in any jurisdiction where such use would be contrary to local
regulations or which would require any registration requirement within such jurisdiction.
©2021 Fundamental Research Corp. “17+ Years of Bringing Undiscovered Investment Opportunities to the Forefront”
Click here to view FRC’s complete list of top picks
PLEASE READ THE IMPORTANT DISCLOSURES AT THE BACK OF THIS REPORTYou can also read
