Archive for Stock Market News

NIKKEI Analysis: Slowing private spending and exports bearish for Japanese NIKKEI

By IFCMarkets

Slowing private spending and exports bearish for NIKKEI

Japanese economy shrank more than expected in third quarter. Will the NIKKEI continue declining?

The Cabinet Office of the government of Japan reported on Wednesday Japan’s economy shrank in the third quarter: the annualized 1.2% quarter-on-quarter gross domestic product decline in the three months to September 2018 was worse than a 1% contraction forecast, and followed a 3% expansion in the second quarter. The contraction was the result of a decline in private consumption, public demand and exports. Earlier data showed industrial production fell in September when a growth was expected, the same as household spending. Weak economic data are bearish for NIKKEI.

NIKKEI stays below MA(200) Technical Analysis OFC Markets chart

On the daily timeframe the NIKKEI: D1 has returned below the 200-day moving average MA(200) which has leveled off

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a bearish signal: it is below the signal line and the gap is widening.
  • The Stochastic oscillator is rising but has not reached the overbought zone.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 21467.00. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 22575.40. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (22575.40) without reaching the order (21467.00), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Position Sell
Sell stop Below 21467.00
Stop loss Above 22575.40

Market Analysis provided by IFCMarkets

US tariff stance softening news buoys markets

By IFCMarkets

Dollar strengthens on strong sales data

US equities rebounded on Thursday supported by news US has softened its stance in US-China trade dispute and positive data. The S&P 500 rose 1.1% to 2730.20. Dow Jones industrial average gained 0.8% to 25289.27. The Nasdaq composite rallied 1.7% to 7259.03. The dollar strengthening resumed as the Census Bureau reported retail sales rose 0.8% in October, above expectations for an increase of 0.6%. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.1% to 97.08 but is lower currently. Futures on stock indices point to mixed openings today.

Brexit turmoil weighs on European indices

European stocks extended losses on Thursday led by bank shares on Brexit concerns after reports of resignations in British government over disagreements with Prime Minister May’s Brexit proposal. GBP/USD’s plunged over 1% while the EUR/USD continued rising and both are higher currently. The Stoxx Europe 600 index fell 1.1%. Germany’s DAX 30 slid 0.5% to 11353.67. France’s CAC 40 lost 0.7% while UK’s FTSE 100 gained 0.1% to 7038.01.

Chinese stocks up

Asian stock indices are mixed today after upturn on Wall Street overnight spurred by report US may pause its tariff upshift in January. The report was denied later by US Trade Representative’s office. Nikkei lost 0.6% to 21680.34 as yen accelerated its climb against the dollar. Chinese stocks are higher as regulators eased rules on trading, fundraising and listings to support struggling bourses: the Shanghai Composite Index is up 0.4% and Hong Kong’s Hang Seng Index is 0.2% higher. Australia’s All Ordinaries Index slipped 0.1% as Australian dollar continued climb against the greenback.

HK50 about to test MA(50) Market Overview IFC Markets chart

Brent higher despite US inventories build

Brent futures prices are extending gains today. Prices ended higher yesterday despite Energy Information Administration report that domestic crude supplies rose for an eighth straight week by 10.3 million barrels. Brent for January settlement closed 0.8% higher at $766.62 a barrel on Thursday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

DE30 Analysis: Slower German growth bearish for DE30 Stock Market

By IFCMarkets

Slower German growth bearish for DE30

German economic growth slowed more than expected in the third quarter. Will the DE30 continue declining?

German economic data were negative on balance lately: economic growth slowed more than expected in the third quarter. Germany’s Q3 gross domestic product slowed to 1.1% over year when 1.3% growth was expected after 2% growth in the second quarter . The decline was due to exports drop while imports rose from the second quarter, according to Germany’s statistics agency Destatis. And a week ago a group of 5 economic advisors to the German government cut their growth forecasts for this year and next: to 1.6% this year compared with 2.3% projected previously, and 1.5% in 2019. Slowing growth is bearish for DE30.

DE30 descent below MA(200) intact Technical Analysis IFC Markets chart

On the daily timeframe the DE30: D1 is below the 200-day moving average MA(200) which is falling, this is bearish.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator gives a neutral signal: it is below the signal line and the gap is steady.
  • The Stochastic oscillator is falling but has not breached into oversold zone yet.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 11269.78. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 11690.14. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (11690.14) without reaching the order (11269.78), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Position Sell
Sell stop Below 11269.78
Stop loss Above 11690.14

Market Analysis provided by IFCMarkets

US stocks extend losses as Apple approaches bear market

By IFCMarkets

Fed seen holding steady after strong inflation data

US equities slide deepened on Wednesday as Apple approached bear territory. The S&P 500 lost 0.8% to 2701.58. The Dow Jones industrial average slid 0.8% to 25080.50. Nasdaq composite index fell 0.9% to 7136.39. The dollar weakening slowed after strong October inflation report, in line with forecasts, gave no reason to expect a change in Fed’s tightening pace: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, slipped 0.04% to 96.97 and is lower currently. Futures on stock indices indicate higher openings today.

CAC 40 opens higher than other European indices

European stocks resumed declining on Wednesday. EUR/USD extended gains despite Italy confirming original plans for 2019 budget deficit while the GBP/USD edged lower despite Prime Minister May success to get cabinet support for her Brexit proposal negotiated with the EU. Both pairs are higher currently. The Stoxx Europe 600 lost 0.6%. Germany’s DAX 30 slid 0.5% to 11412.53. France’s CAC 40 fell 0.7% and UK’s FTSE 100 slipped 0.3% to 7033.79. Indices opened 0.2% – 0.5% higher today.

Hang Seng leads Asian indices rebound

Asian stock indices are mostly higher today on US-China trade talks progress hopes. Nikkei lost 0.2% to 21803.62 with yen little changed against the dollar. China’s stocks rebounded supported by news China had sent a written response to US demands for trade reform: the Shanghai Composite Index is up 1.4% and Hong Kong’s Hang Seng Index is 1.6% higher. Australia’s All Ordinaries Index added 0.1% while the Australian dollar climb against the greenback persisted.

HK50 about to test MA(50) Market Overview IFC Markets chart

Brent up despite expected US inventories build

Brent futures prices are edging higher today. Yesterday the American Petroleum Institute reported that US crude supplies rose by 8.8 million barrels last week. Prices ended higher yesterday: the January Brent crude gained 1% to $66.12 a barrel on Wednesday. Today at 16:30 CET the Energy Information Administration will release US Crude Oil Inventories.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

US stock market retreats as oil plunges

By IFCMarkets

Dollar weakens as budget deficit widens

US equities retreat continued on Tuesday while oil prices accelerated declines. The S&P 500 slipped 0.2% to 2722.18. Dow Jones industrial average lost 0.4% to 25286.49. The Nasdaq composite index however added 0.1 point to 7200.87. The dollar strengthening reversed as the Treasury Department reported the US budget deficit rose to $100 billion in October, compared to the $63 billion deficit the same month a year ago. The live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, fell 0.6% to 97.01 but is higher currently. Futures on stock indices point to mixed openings today.

European stocks bounce back

European stocks bounced back on Tuesday despite Italian government’s failure to resubmit its 2019 budget plan to European Union. A report an agreement was reached on Irish border in Brexit negotiations supported the British Pound. Both the EUR/USD and GBP/USD jumped higher but are lower currently. The Stoxx Europe 600 gained 0.7%. The German DAX 30 rallied 1.3% to 11472.22. France’s CAC 40 climbed 0.9% and UK’s FTSE 100 added 0.01% to 7053.76. Indices opened 0.4% – 0.6% higher today.

Nikkei up while Asian indices fall

Asian stock indices are mostly lower today. Nikkei however ended 0.2% higher at 21846.48 as yen accelerated slide against the dollar. Chinese stocks turned lower as retail sales grew at the slowest pace in five months in October while growth in industrial output and investment accelerated: the Shanghai Composite Index is down 0.9% and Hong Kong’s Hang Seng index is 0.5% lower. Australia’s All Ordinaries Index extended losses 1.7% as Australian dollar was little changed against the greenback.

Brent edges up

Brent futures prices are marginally higher today after sharp fall yesterday. Prices tumbled yesterday after OPEC report its crude production together with Russia’s output continued to climb in October, more than offsetting losses from Iran. S&P Global Platts analysts expect the US crude inventories rose by 2.3 million barrels last week. January Brent fell 6.6% to $65.47 a barrel Tuesday, entering a bear market, down about 24% from its peak in October.

BRENT accelerates fall below MA(200) Market Overview IFC Markets chart

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Technology shares lead US stocks selloff

By IFCMarkets

Dollar strengthens to year-and-half high

US equities sold off on Monday led by technology shares. The S&P 500 fell 2% to 2726.22. Dow Jones industrial lost 2.3% to 25387.18. The Nasdaq composite index dropped 2.8% to 7200.87 led by Apple down 5%. The dollar strengthening accelerated: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, jumped 0.8% to 97.63, one and half year high but is lower currently. Futures on stock indices indicate higher openings today.

European stocks open mostly higher

European stocks extended losses on Monday on concerns about Italy budget deficit and lack of progress in Brexit negotiations. Both EUR/USD and GBP/USD accelerated declines but are gaining currently. The Stoxx Europe 600 index fell 1%. The DAX 30 dropped 1.8% to 11325.44 and France’s CAC 40 lost 1%. UK’s FTSE 100 slid 0.7% to 7053.08. Indices opened flat to 0.4% higher today.

DE30 downtrend intact Market Overview IFCM Markets chart

Italy’s budget deficit concerns came to fore again. Today is the last day Italy can submit a revised budget proposal to the European Union. The first proposal with a budget deficit target of 2.4% of GDP in 2019 was rejected by the EU, but Italy’s government said it could not revise the budget deficit target. If no change is resubmitted today the EU is expected to open an excessive deficit procedure and apply sanctions against Italy.

Chinese shares extend gains

Asian stock indices are mixed today. Nikkei fell 2.1% to 22810.52 as yen continued slide against the dollar. Chinese shares are higher on news China’s top trade negotiator Liu He may visit Washington as part of the preparations for the talks between US President Donald Trump and his Chinese counterpart Xi Jinping on the sidelines of the G20 summit in Argentina later this month: the Shanghai Composite Index is up 1% while Hong Kong’s Hang Seng Index is 0.2% lower. Australia’s All Ordinaries Index turned 1.8% lower as the Australian dollar turned higher against the greenback.

Brent down after Trump tweet

Brent futures prices are edging higher today. Prices extended losses yesterday after President Trump tweeted he hoped Saudi Arabia and OPEC woldn’t cut oil production and prices should be much lower based on supply: January Brent crude slipped 0.1% to $70.12 a barrel on Monday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.

Biotech Announces Preclinical Data on its Intravaginal Rings at Meeting

By The Life Science Report

Source: Streetwise Reports   11/10/2018

A ROTH Capital Partners report relayed the contents of both presented abstracts.

In a Nov. 8, 2018, research note, ROTH Capital Partners analyst Dr. Yasmeen Rahimi reported that Daré Bioscience Inc. (DARE:NASDAQ) presented two preclinical abstracts on its intravaginal rings (IVRs) DARE-HRT1 and DARE-FRT1 at the Association of Pharmaceutical Scientists’ meeting last week.

Rahimi summarized the contents of those two abstracts.

Regarding DARE-HRT1, data from the use of this IVR in sheep indicate it dually releases 17-beta estradiol and progesterone efficaciously, she noted. Specifically, results showed an initial burst of hormones on Day 1 and an average release rate comparable to that of Femring over the remaining cycle days. “Overall, DARE-HRT1 was well tolerated in the sheep and demonstrated encouraging release profiles for the clinic,” relayed Rahimi. Daré is developing DARE-HRT1 as a treatment for vasomotor symptoms and, potentially, vulvovaginal atrophy.

As for DARE-FRT1, ovine data on the use of this ring show it can sustain the release of drugs at varying rates, indicated Rahimi. In this 14-day trial, three rates were tested. Following the initial burst of hormone on Day 1, each rate was sustained for the duration. “DARE-FRT1 was also well tolerated, with minimal to mild local vaginal irritations that are typical with IVRs or other foreign placements, as well as no effects on body weight or clinical/pathology observations mediated by the IVR,” she explained. Daré is developing DARE-FRT1 to prevent preterm birth in women with a short cervix and who are pregnant with one fetus.

Daré’s abstract on DARE-HRT1 is dated Nov. 6 and labeled T1130-12-095; its abstract on DARE-FRT1 is dated Nov. 7 and labeled W0930-09-72.

ROTH has a Buy rating and a $6 per share 12-month target price on Daré, whose stock is currently trading at around $0.93 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclosures from ROTH Capital Partners, Daré Bioscience Inc., Company Note, Nov. 8, 2018

Regulation Analyst Certification (“Reg AC”): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.

Within the last twelve months, ROTH has received compensation for investment banking services from Daré Bioscience, Inc.

ROTH makes a market in shares of Daré Bioscience, Inc. and as such, buys and sells from customers on a principal basis.

Shares of Daré Bioscience, Inc. may be subject to the Securities and Exchange Commission’s Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.

Within the last twelve months, ROTH has managed or co-managed a public offering for Daré Bioscience, Inc.

ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.

( Companies Mentioned: DARE:NASDAQ,
)

Catalysts Approaching for U.S. Developer of Cancer Therapeutics

By The Life Science Report

Source: Streetwise Reports   11/10/2018

An H.C. Wainwright & Co. report highlighted this biotech’s upcoming key events to watch.

In a Nov. 7, 2018, research note, H.C. Wainwright & Co. analyst, Dr. Swayampakula Ramakanth, reported that Tyme Technologies Inc. (TYME:NASDAQ) has several catalysts happening in calendar year 2019.

He listed and explained them.

The first catalyst, he noted, expected to occur next year, in January, is the readout of interim safety and efficacy data from the first stage of Tyme’s Phase 2 pancreatic cancer trial, TYME-88-PANC. The study is evaluating use of Tyme’s combination therapy SM-88 in patients with recurrent metastatic pancreatic cancer who have failed one or more prior chemotherapies.

In the first of TYME-88-PANC’s two study parts, two SM-88 doses are being tested in 36 patients. “Of the two doses, the more effective dose could be used for the expansion cohort in the second stage of the Phase 2 study,” Ramakanth pointed out.

Chronologically, the second catalyst, anticipated in Q1/19, is the release of updated safety and efficacy data from Tyme’s Phase 1b/2 prostate cancer study. In the trial, Tyme’s combination therapy SM-88 is being evaluated in eight patients with biochemically recurrent prostate cancer.

Ramakanth recapped that trial results to date demonstrated that patients tolerated the treatment well, with no related significant adverse events. Additionally, all of them showed a “greater than 20% reduction in circulating tumor cell levels by cycle two with no radiographic progression reported.”

The third catalyst, slated for sometime in H1/19, is the start of the Precision Promise Phase 2/3 pivotal trial conducted by the Pancreatic Cancer Action Network. The study purpose is to compare the outcomes of new, potential pancreatic cancer treatments with those of the standard of care.

One such treatment to be evaluated is Tyme’s SM-88, as a monotherapy for second line pancreatic cancer patients. “The participation in Precision Promise is a highly cost effective way to evaluate the therapeutic potential of SM-88,” noted Ramakanth.

In the research report, the analyst also reviewed the biotech’s financial results for its fiscal year (FY) Q2/19, which ended Sept. 30, 2018, along with forecasts for FY19. For the past quarter, the company posted zero revenue and a $0.07 per share net loss, which were in line with H.C. Wainwright’s projections. For FY19, Tyme is projected to not generate revenue and sustain a greater net loss, of $0.30 per share.

The company’s cash on hand at September’s end was $21.1 million, which, Ramakanth asserted, “is sufficient to fund operations until FY Q1/20.”

The analyst reiterated H.C. Wainwright’s Buy rating and $9.50 per share price target on Tyme, whose current stock price is about $2.02 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following company mentioned in this article is a billboard sponsor of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.

Disclosures from H.C. Wainwright & Co., Tyme Inc., Earnings Update, November 7, 2108

I, Swayampakula Ramakanth, Ph.D. and Sean Lee, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

A research analyst of the firm and/or the research analyst’s household has a financial interest in and own the securities of Tyme
Technologies, Inc. (including, without limitation, any option, right, warrant, future, long or short position).

As of October 31, 2018 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Tyme Technologies Inc.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did receive compensation from Tyme Technologies, Inc. for investment banking services within twelve
months before, and will seek compensation from the companies mentioned in this report for investment banking services within
three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Tyme Technologies, Inc. during the
past 12 months.

The Firm does not make a market in Tyme Technologies, Inc. as of the date of this research report.

( Companies Mentioned: TYME:NASDAQ,
)

Hemp Sales Grow at CV Sciences: Q3 Beats Estimates, 2019 Outlook

By The Life Science Report

Source: Fincom Investment Partners for Streetwise Reports   11/07/2018

Fincom Investment Partners takes a look at Q3 earnings for a U.S.-based CBD company and explains why it believes it offers good value.

  • CV Sciences beat our Q3 sales, gross margins, and sequential growth estimates.
  • Shares have been outperforming the cannabis sector.
  • Remains best value in cannabis/hemp space.

CV Sciences Inc. (CVSI:OTCQB) reported Q3 2018 earnings November 7, surpassing our expectations, a solid beat. Our prior estimation of CVSI hitting the all-important $50 million sales run rate is confirmed.

Top line Y/Y sales growth was over 143%. Our realistic growth expectations indicated Q3 2018 revenues would hit $13.3 million; they came in nicely at $13.6.

Sequential sales growth hit 10%, exceeding our 8% estimate; this roughly extrapolates to a 45% annual growth rate.

Our quick annualizing of the prior 2 quarters’ basic earnings of $0.04 suggests a net earning run rate of $0.16, which places CVSI at a PE of 34—quite fair for a 45%, or 143% Y/Y (take your pick) growth story—and this one has “legs.” For sure, CV’s net earnings look a downright steal compared to most in the cash-hemorrhaging cannabis sector.

We expected continued strength in gross margins, which hit 73%. Continued strong Q3 gross profit at $9.9 mm, for a 149% Y/Y jump. Net GAAP earnings matched our estimate of $3.3 million at $3.295, and retail store count hit 2093.

KEY DRIVERS FOR 2019

  1. NASDAQ Listing. Unlocks a potential tsunami of investors. May take Farm bill passage. We believe NASDAQ is responding and qualifying CV’s July application; a positive.
  2. 2018 Farm Bill. The 2014 Bill expired on September 30 and politicos will have to pass a new one. Senate Leader Mitch McConnell has included bill language fully legalizing hemp (as widely reported). Should pass in lame duck session, as Senator McConnell just indicated. We think full U.S. hemp legalization is now nearly certain as House Rep. Pete Sessions lost re-election bid; he had been a main cannabis bill blocker. All told, we believe the election was a big win for hemp and CBD.
  3. Expanding CBD market. We suspect the upcoming Farm Bill opens the floodgate for CBD. Indeed, giants Coca-Cola and Walmart, among others, have publicly expressed interest in the CBD “wellness” space. We bet the whole bunch (like Pepsi, Starbucks, etc.) soon piles in.
  4. Cannabis/hemp/CBD is here to stay, whether you like it or not.
  5. CVSI well positioned for continued growth. Whole Foods, along with the other food, drug and mass merchandise retail, have yet to enter. We predict this changes in 2019. CV has been working these channels for years, and is anticipating the upcoming boom. In the Q3 call, CVSI specifically emphasized their major, recent investments in raw material procurement and oil processing, exactly what is necessary for a fast scale-up in 2019.
  6. Wall Street catching on. Full federal U.S. cannabis legalization could be years away, and quirky state laws (like California’s) are designed to protect small operators, throttling mass marketing. Investors are beginning to realize hemp-based CBD, the benefits, without the “high,” is the better play. We argue there’s more Americans interested in better health, on a daily basis, than those getting “stoned.” Let’s hope. We’ll wash our CBD down with a glass of wine, thank you.
  7. Hemp/cannabis “action” moves from Canada to U.S. Our suspicion of Canadian legalization a “sell the news” event looks prophetic. Canadian operator Tilray is returning to planet earth. Note: U.S.-focused companies—CVSI and Charlotte’s Web—had a recent dramatic share outperformance. Investor interest grows. We believe this trend continues throughout 2019 as U.S. cannabis takes center stage.
  8. Product and marketing growth. CV’s new (quite tasty) CBD gummies should add revenue. CBD oil tastes lousy. We think CBD edibles have a big future, and the new gummy line hits it perfectly. Try some. Although sales have been exploding, CVSI has room to grow/improve marketing and retail base, maintaining revenue expansion.
  9. Mass market hasn’t even started. CBD oil, at around $150 per month, or more, is expensive for the average consumer. We believe peak volume’s at the $40–$50 range. Our vision is a two-tier “premium” and “value” approach. Sort of like Proctor & Gamble did in laundry soap. In our opinion, the early cannabis/hemp players are over-selling a hyperbolic “super-quality” sales pitch, ignoring 50 years of recreational drug use history, and consumer pricing everywhere else. 90% of wine sells below premium brand pricing.
  10. Value-added manufacturing. Cannabis/hemp has been grown in India for over 4,000 years. It’s not new. It grows all over Latin America; is plentiful in Europe. Sourcing is world-wide. Like any commodity, abundant supply lowers prices. We believe future profits best found in skilled manufacturing, i.e., oils, edibles, and, naturally, distribution. We expect investors figure this out during 2019. CVSI is spot on trend.
  11. Better business model. CV let’s others do the farming, a tough, low margin business. We see tremendous investor disconnect towards growing/vertical integration hype. $13 billion Tilray boasts a (sarcastically) whopping 2.4 cannabis acres under cultivation; the USDA (Sept. 2018) reports U.S. tobacco crop planting alone at 321,000 acres. They can crush pot farmers blindfolded. Do the math. Marijuana farming supposedly yields over $1 million per acre, while tobacco farmers, the highest paying major crop, get about $1,500 per acre. Investors have to be idiots to think farmers won’t switch. Plus, it grows all over California, and elsewhere, outdoors and year-around. We believe input (cannabis/hemp) prices continue falling, which could strengthen CV’s gross margins.
  12. Potential intermediate term supply shock. Hemp oil does require a larger input; it will take farmers several cycles to scale up for any sudden demand jump. CV Sciences is well aware of the supply situation and lining up suppliers, world-wide, for expansion, as stated in its Q3 earnings call.
  13. Management. A solid core team is ready to grow. Includes “bankable” CEO Joseph Dowling, a CPA, former Citigroup MD, and driven entrepreneur, along with the dynamic Stuart Tomc, a proven industry expert. Famous NFL neurologist Joseph Marron recently joined Board. Competition’s increasing—the early, land-grab days are over—in the trenches, only strong, experienced management survives. Mature and professional, CVSI has an opportunity for a sector “roll-up.”
  14. Moat building. Shelf space in health and nutritional stores is not easy to gain. Stores like to stick with brands they know. We are skeptical Canadian cannabis will have much penetration success as well as the myriad of CBD wannabe’s coming out of woodwork.

Background

San Diego, Calif.-based CV Sciences (OTCBB:CVSI) is a rapidly emerging player and market leader in the cannabis realm, the exploding CBD (non-intoxicant) “cannabidiol” market. CBD is a cannabis compound, but does not contain THC (the “high” component” in marijuana). Numerous research studies show wide benefits including for inflammation, pain, anxiety, arthritis, diabetes, PTSD, infections, epilepsy, depression, alcoholism and MS.

CV’s choice to first-focus in non-THC paid handsomely; PlusCBD is now sold in over 2,000 U.S. retailers, nationwide, an impressive penetration depth.


Attractive products. We like the new gummies. (Source: CV)

CV Sciences was founded in 2012 by entrepreneurs, Michael Mona, recruiting Joseph Dowling as CFO in 2014 along with the CV “secret weapon,” nutritional supplement expert and industry veteran, Stuart Tomc, who previously help build success story Nordic Naturals. In May 2018, Mr. Dowling assumed the role of CEO.

We were favorably impressed with CV’s office and state-of-art lab during our visits. So will the “Cokes” and “Whole Foods.” This is important: quite sadly, the nutrition industry has always attracted loads of charlatans. CV Sciences’ attention to compliance and quality protects shareholders and adds value going forward.

From the Sept. 10 news release, where CV has received:

“Generally Recognized as Safe (GRAS) status in accordance with stringent U.S. Food and Drug Administration (FDA) safety guidelines. CV Sciences is the only hemp CBD nutraceutical company to invest in the scientific evidence necessary to achieve this sought-after designation,..”

Bottom line: it’s all cleaned up and ready to go.

 Displaying CV Sciences - Lab 1.jpg</br />

Attractive, professional San Diego office. State-of-art lab and production facilities (Source: CV)

Nutrition/ vitamin industry a natural fit

This author, coming from a health industry family, with parents and siblings working both retail and wholesale since the 1970s, has followed industry development for over 35 years. Hemp-based CBD is the right product at the right time. The nutrition industry has always “ran” on hot, new products. It’s their life-blood. All retailers today are under pressure, especially the small ones, and “hot” products drive new customers into stores.

CBD is a natural fit. Nutrition stores sell dozens of plant-based concoctions, which explains why CBD was such a fast adaption. CVSI is already in over 2,000 U.S. retail locations nationwide—perhaps more (genuinely active) retailers than the entire cannabis industry, combined.

Whole Foods has yet to enter the CBD fray, they will, count on it. CV has great potential for continuing revenue growth, with deep relationships in the industry. We can’t stress this enough—shelf space in the nutrition industry is not easy. It’s a different industry, with unique quirks. Most CBD competitors are farmers, charlatans, or wannabe start-ups.

Generational growth for plant-based medicines

28,187 plant species are recorded with medical use (source: Royal Botanic Gardens, London); an estimated 40% of prescription medicines come (or synthesized) from plants. Cannabis is part of a generational shift towards more direct, natural use, and less, more toxic, “meds.” There are many dozens of known plants that have healing value. Cannabis is just one. Many others are known to exist with mild pyscho-active elements or healing benefits. The CV sales channel has thus an intrinsic value—opportunities exist going forward to introduce new, helpful products.

CVSI remains the better value. Canadian operator Tilray—bubbling after a U.S. listing (see below) has gone down from a genuinely insane 25X (relative to CVSI) overvaluation, to “only” 24X, from our Sept. 24 report where we wrote:

“CVSI is the better value. By far. Aphria (APH.TO) lost $5mm on $12mm in sales (5/18) yet trades for C$4.6 billion. Charlotte’s Web (CWEB.CN) is a US CBD seller with slightly larger sales and earnings (and a nice chocolate mint product) but trades over 3.5X higher than CVSI. Cronos (CRON) sells for $2.2 Billion with paltry Q2 sales of $3.4 million.”

We note: a re-valuation continues to favor CVSI for 2019.

https://c.stockcharts.com/c-sc/sc?s=MJ&p=D&st=2018-01-01&i=t3088327453c&r=1541623432908https://c.stockcharts.com/c-sc/sc?s=CVSI&p=D&st=2018-01-01&i=t7774611949c&r=1541623482334

Mirror, mirror on the wall, whose chart is the fairest of them all? (source: Stockcharts)

CBD leaders: CVSI and Charlotte’s Web (CWEB.CA).

The industry’s two leading, public, U.S.-focused, CBD pure-plays have many similar characteristics. In Q2 CV earned $3.1 (millions) on $12.3 in sales, while CWEB earned $3.7 on $17.2 in sales. Charlotte’s Web has excellent name recognition, a hit product in chocolate mint CBD oils, and now is heavily cashed up. However, as investors we preference CVSI for the following reasons:

  1. Better Valuation. CVSI has been trading at about 1/3 the value. A significant difference.
  2. All of CWEB’s hemp oil comes from their proprietary 300 acres of crop land. This is a microscopic sliver and hardly worth a premium for vertical integration, long term, we believe. 300 acres is a micro-drop of world market supply.
  3. Charlotte’s Web trades on the lowest Canadian exchange, was a Canadian financed IPO, with limited U.S. exposure. We fear extra risk if Canadian investors (doing what they always do) dump everything as the bubble up north deflates. We preference U.S. stocks growing their base of U.S. institutional investors, a phase CVSI is just beginning.
  4. The CV management team has been together for 4 ½ years, while CWEB has a new rent-a-CEO, a lawyer, previously with an extremely over-hyped millennial/hipster “brand,” one of probably hundreds, that “nobody” in the health food industry knows (based on our conversation’s). That’s a risk.
  5. Potential for institutional “endorsement.” We’d like to see CV take some serious money institutional investors are offering to expand marketing, add depth with “name” investors, plus add big-time U.S. brokerage coverage. The institutional “herd” has begun to hear of CVSI, but yet to pile in. Right now share volume seems almost entirely retail/day-trader. The timing is right: CVSI has been invited to present at Cowen’s upcoming November cannabis symposium and was the only CBD player invited to CNBC’s Jim Cramer’s recent special event.

CV Sciences vs. Tilray

Since Tilray has yet to release Q3 financials, we will compare Q2—guess which company (Tilray or CVSI) is worth $13 billion and which sells for $543 million?

Q2 sales: $12.3 million Q2 sales: $9.7 million
Y/Y growth rate: 200% Y/Y growth rate: 95%
Q2 net profit: $3.1 million Q2 loss ($12.8 million)*
% sales in higher margin oils: 100% Oils: 45% – dried leaf: 54%
Gross profit: 73% Gross profit: 42%
US Sales: 100% US Sales: 0

*includes $5.6 mm in stock compensation expenses

Hint: Tilray isn’t profitable.

Do you see 24X more value?

Prices falling. Tilray reported (Q2) an average selling price per gram at $6.38. That’s good, but look at real-world legalization. Oregon, for example, legal since 2015: High quality cannabis prices in Portland are down to $75 an ounce ($2.65 per gram) (source: priceofweed.com).

It’s a Canadian company, folks. Shares of Tilray spiked on November 7, apparently after U.S. Attorney General Jeff Sessions resigned. Only. . .Tilray does no business in the U.S. Bulls may argue they could, someday, but then, so could all the other 100’s of producers. See below. We do agree, however, current developments are likely bullish for all cannabis.

Lower margins. Tilray’s margins are significantly less than CV. One would think being “vertically” integrated would be more profitable. That’s the sales pitch, at least.

Will the cartel pricing hold? The Canadian government lists 132 authorized cannabis producers. The only chance of prices holding, contrary to the real-world, U.S. early-legalized states, in our opinion, is an OPEC-like cartel pricing, where everybody is in on the act. Big Liquor in Canada keeps prices high, but there are only a couple large players. Plus, liquor requires capital, and time; it is expensive to transport. If one pot seller lowers prices, and subsequent volume spikes, we doubt the current nosebleed valuations would hold, and the whole Canadian pot sector could crash.

Scroll down, Tilray’s near the bottom:

https://www.canada.ca/en/health-canada/services/drugs-medication/cannabis/licensed-producers/authorized-licensed-producers-medical-purposes.html

In sum, not only do we believe CVSI is the better value, we suggest CVSI and Tilray should be priced equally.

Global Completed Export Map.png

This slide looks over-promotional. Tilray Q2 global sales a paltry $345K – 96.5% in Canada. (Source: Tilray)

CBD goes mainstream

On September 17, Coca-Cola announced it was in “talks” with a Canadian cannabis company, saying:

“Along with many others in the beverage industry, we are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coke said in its statement.” (Source: Reuters)

The Coke announcement is about CBD. Not marijuana. It is a potential blockbuster. For CBD, that is. The Canadian cannabis companies have almost no experience selling CBD, certainly not in the US.

Coke used the term “functional wellness beverages.” Not exactly sexy, but a validation of a quantum shift in consumer attitude. If Coke, then Pepsi, Starbucks, etc. This news helps confirm our thesis that the CBD story is just beginning.

CVSI has the core expertise, production compliance and distribution in CBD oils that they will need.

Follow the money. It’s not the hops, barley or tobacco farmers flying those private jets, it’s the manufacturers, large-scale distributors and kingpins. In the “wellness” and nutrition business, it’s even worse; small retailers have been squeezed for years. Will cannabis retailing be different?

Yes, but the big guys will buy us out. Maybe. But our experience differs: big corporations are ruthless at sourcing—how often do they sole-source or pay input providers huge profits? Secondly, we’ve seen plenty of “strategic” deals announced and then go nowhere. Finally, the number of dumb corporate acquisitions probably dwarfs the great ones. We think skilled, value-added, U.S.-focused, with national distribution, should be favored.

Actual recent sector buyouts have been by overvalued Canadian growers smartly using inflated stock, picking up U.S. assets. Another reason to consider CVSI.

Public markets opening. As noted, we expect CVSI leads U.S. cannabis sellers in NASDAQ uplisting. Nobody knows when U.S. marijuana stocks will be federal “legal” enough for U.S. senior listing. Limited exits = lower valuations. But a clever U.S. CBD company can enter the THC space, when appropriate, through buyout or organically, and thus be first to public markets.

Risk factors

This is a fast moving market and subject to violent market changes. Volatility is off-the-chart. Be careful. Although CV qualifies for a NASDAQ listing, and the cannabis “barrier” has been broken, there is no assurance of ultimate listing.

Like all of the cannabis industry there are plenty of competitors as entry barriers are low. CVSI has an early lead and possesses top talent to maintain competitive advantage. Nevertheless, increased competition is a certainty.

There are numerous state and federal agencies still weighing in on CBD as a food. No assurance can be made that some agency will attempt to deny CBD sales, and no guarantee, although remote, the Farm Bill passes.

We see the biggest near term risk as a pinprick bursting the bubble of the other cannabis stocks. Especially Tilray. Per our Sept. 24 report, we hoped for CVSI to outperform while the sector consolidates.

So far, so good.

Summary

Another good quarter. We continue to preference CVSI for the relative, discounted valuation, expected NASDAQ listing, and strong U.S. sales, nationwide. We believe Canadian cannabis shares have peaked, valuations are stretched, and the investing “action” has shifted to the U.S., and, that this theme continues throughout 2019. Any sizable dip on a sector sell-off could be a CVSI opportunity.

Cannabis is here to stay. Investors interested in exposure should favor U.S.-based, high-margin, profitable, and rapidly growing, CV Sciences.

Frederick Lacy, President of Fincom Investment Partners, began as a Chicago commodity broker in 1984. In 1987 he joined Bateman Eichler, Hill Richards in Los Angeles, focusing on small to mid-cap equities, ultimately “retiring” in 2000 as a Managing Director of Investment Banking. Mr. Lacy has been involved in numerous investments, from arranging start-up capital for what became Petrohawk, which sold for $15 Billion, to mobile payments in India. Several long-time clients were founding investors of Cheniere Energy. Mr Lacy’s decades in California technology includes arranging an early $13 million VC financing for “permanent ledger” software (now commonly known as “blockchain”) led by top-tier fund Upfront Ventures. Other investments include 3D holographic display technology, early mobile applications, power conversion, along with multiple consumer health-related products: Canadian Glacier bottled water, Kinetin skin cream, a proprietary oxidative-stress formula, and UV purification systems. In 1989 Mr. Lacy hosted “the Venture Capitalist” which aired on (now) CNBC, and has followed the natural foods industry for 35 years.

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Fincom Investment Partners Disclaimer

This report is for informational purposes only and is not a solicitation of any security purchase or sale. Prices as of November 6 and 7, but are moving too fast to constantly recalculate; do your own due diligence. Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, Fincom Investment Partners cannot guarantee its accuracy. Any opinions or estimates constitute our best judgment as of the date of publication, and are subject to change without notice. We recommend investors conduct thorough investment research of their own, including detailed review of the related Companies’ SEC filings, and consult a qualified investment adviser. Fincom Investment Partners and its officers and directors own shares in the securities mentioned in this report and may buy or sell shares at any time without prior notice. Fincom Investment Partners has not been compensated for this report.

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( Companies Mentioned: CVSI:OTCQB,
)

US stocks slip on strong producer prices gains

By IFCMarkets

Dollar strengthening persists

US equities slide continued on Friday. S&P 500 lost 0.9% to 2781.01, closing 2.1% higher for the week. Dow Jones industrial average slid 0.8% to 25989.30. The Nasdaq fell 1.7% to 7406.90. The dollar extended gains on stronger than expected producer price inflation October report: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 96.861 and is higher currently. Futures on stock indices point to higher openings today.

SP500 closes above resistance MA(200) Market Overview IFCM Markets chart

European stocks end week higher

European stocks pulled back on Friday. Both the EUR/USD and GBP/USD continued their decline with both pairs down currently. The Stoxx Europe 600 Index slid 0.4%, managing however to book 0.5% gain for the week. The DAX 30 rose 0.02% to 11529.16. France’s CAC 40 lost 0.5% and UK’s FTSE 100 retreated 0.5% to 7105.34 despite higher third quarter GDP growth in line with forecasts.

Shanghai Composite leads Asian indices gains

Asian stock indices are mostly higher today led by Chinese stocks. Nikkei added 0.1% to 22269.88 as yen turned lower against the dollar. Chinese stocks are rising as Premier Li Keqiang said Beijing will further open up its economy ahead of meetings with Asia-Pacific leaders in Singapore: the Shanghai Composite Index is up 1.2% while Hong Kong’s Hang Seng Index is 0.02% lower. Australia’s All Ordinaries Index added 0.3% with Australian dollar accelerating slide against the greenback.

Brent surges on Saudi supply cut comment

Brent futures prices are rebounding today after top exporter Saudi Arabia announced a supply cut in December. Prices fell yesterday on reports about rising global crude output: Brent for January settlement edged 0.7% lower to close at $70.18 a barrel Friday.

Market Analysis provided by IFCMarkets

Note:
This overview has an informative and tutorial character and is published for free. All the data, included in the overview, are received from public sources, recognized as more or less reliable. Moreover, there is no guarantee that the indicated information is full and precise. Overviews are not updated. The whole information in each overview, including opinion, indicators, charts and anything else, is provided only for familiarization purposes and is not financial advice or а recommendation. The whole text and its any part, as well as the charts cannot be considered as an offer to make a deal with any asset. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.