THCX cup and handle formation

12 Jun 2018

Expected upside is 2.11 which is also the difference between the high and the bottom of the cup. Senate voted for bill C 45 last week and it's now in government's hands. We could see legal cannabis in the next few months.

20 Jun 2018

Catatan

Senate accepted bill C 45 as is, without amendments.

A bit of fundamental analysis:

They will be the preferred cannabis provider of Quebec's SAQ for the next 5 years with more than 200 000 kg expected. First year will be 20 000 kg. For Q2 2018, they sold 131 501 grams of medical cannabis for 1 182 000 $ (8.99$ per gram). I expect a lower price for recreational cannabis and derived products sold to SAQ but for example, 20 000 kg would give an additional revenue per year of 160 millions if it was sold 8$ per gram. The company has a current market cap of 1b and pretty much has a guaranteed revenue between 500m and 1b in the next 5 years. If we target a future P/E ratio of 50, they need an EPS of 0.10$ per quarter (191 743 873 shares * 0.10$ = net income of 20 millions $ per quarter). For Q2 2018, they had operating expanses of 5.5 millions $ and their cost of goods sold accounted for 1/3 of their revenue.

Let's make some very basic projections assuming a constant number of shares at 5$.

imgur.com/oai02xu

There is potential :)

21 Jun 2018

Trade aktif

THCX announced it will be listed on TSX tomorrow and rebrand to HEXO. There is a high volume to the upside. Lots of shares walls being eaten today.