Nutriband (OTCQB: NTRB), a results driven, health and pharmaceutical company, appointed Larry Dillaha, MD as its chief medical officer and as a member of its Pharmaceutical Advisory Board last week.
Why It Matters: Dr. Dillaha brings nearly 20 years of pharmaceutical industry experience to Nutriband. Prior to joining Nutriband, he was chief executive officer of Repros Therapeutics from February 2017 to February 2018. Prior to joining Repros, Dr. Dillaha was the chief executive officer of CavtheRx, an inception stage biotechnology company, from June 2016 to February 2017, and chief operating officer and chief medical officer of New Haven Pharmaceuticals, a specialty pharmaceutical company. He also served as chief medical officer of Insys Therapeutics, Sciele Pharma and as Medical Director of Sanofi-Sythelabo. Dr. Dillaha received an M.D. degree from the University of Tennessee, Memphis.
Key Quote: "Dr. Dillaha's extensive experience includes substantial work in the therapeutic area of pain management, adding to the significant depth of the Nutriband scientific team as we work to develop and commercialize critical ADF transdermal products to this important area of pain therapy." Gareth Sheridan, CEO, Nutriband
Disclosure
(Nutriband Inc. [OTCQB: NTRB] is a client of RedChip Companies, Inc. NTRB agreed to pay RedChip Companies, Inc. 10,000 shares of Rule 144 stock for 6 months of RedChip investor awareness services and consulting services.)
What Rising Rates Mean for Small-Cap Stocks
Small caps have led large caps and midcap stocks so far this year. Going into Monday's session, the small cap S&P 600 was up 13% year to date; the large cap S&P 500, up 6%; and the midcap S&P 400, up 5%.
Based on historical information, rising interest rates point to further upside ahead for small-caps.
Accelerated GDP growth and the early signs of inflation—mostly being felt in increased commodity, raw material, and other input costs—are more historically familiar economic territory.
History also shows that these developments are typically coincident with rising interest rates. So far, though, the 10-year Treasury yield has stubbornly refused to acquiesce to history—making the 10-year the major road block on the path back to normal.
But with other developments firmly in place, including short rates that are on the rise, we believe that the upward trend in rates is under way—and we suspect that the 10-year yield will begin to move up more consistently over the next year.
As small-cap specialists, we see all this as healthy. Once again turning to history as our guide, we find that periods of rising rates have been favorable for small-cap stocks on both an absolute and relative basis.
When the 10-Year Treasury yield was rising, the Russell 2000 Index outperformed the large-cap Russell 1000 in 70% of trailing monthly rolling one-year periods for the 20-year period ended 6/30/18, with an average one-year return of 23.8% versus 19.2% for large-cap.
A large bullish MACD divergence has formed on GSRX Industries (OTCQB: GSRX) over the past few weeks, with MACD histogram crossing the zero-line late last week. With a steady flow of positive news from its ongoing expansion in California and Puerto Rico, improving fundamentals are in line with the bullish technical picture.
Why It Matters: A bullish divergence forms when a security records a lower low and the MACD forms a higher low. The lower low in the security affirms the current downtrend, but the higher low in the MACD shows less downside momentum. Despite less downside momentum, downside momentum is still outpacing upside momentum as long as the MACD remains in negative territory. Slowing downside momentum can sometimes foreshadow a trend reversal or a sizable rally.
What’s Next: GSRX has plans to rapidly scale its business in the months and quarters ahead. In recent weeks the company has announced significant expansion efforts in Puerto Rico as well updates on the success of its expansion efforts in California. To learn more about its strategy and long-term potential, watch our exclusive webinar with CEO Les Ball: RedChip.com
Disclosure
(GSRX Industries [OTCQB: GSRX] is a client of RedChip Companies. RedChip Companies, Inc. received 1,000,000 registered shares of GSRX for consulting services and 50,000 shares for investor awareness services. Be advised RedChip intends to sell some or all of its shares at any time, including when you are buying.)
Spectrum Global Solutions (OTC: SGSI), a single-source provider of end-to-end next-generation wireless and wireline network services and solutions to the service provider (carrier) and corporate enterprise markets, has been awarded a regional contract extension by a Tier 1 carrier. The continued customer orders are for the construction of Ultra-Fast Fiber Network infrastructure for broadband services. The Company has already billed this carrier over $4.5 million year to date.
Why It Matters: Telecom infrastructure spending continues to grow as service providers and enterprise customers struggle to keep pace with technology advances. This is great news for companies like SGSI who have built their business around servicing this lucrative opportunity and have proven themselves to be a capable provider with a growing backlog of business.
Key Quote: "This contract extension is indicative of the long-term relationships we maintain with our carrier clients. We are enabling this carrier client to expand and deliver enhanced wireless and wireline IP broadband networks to support its growing customer demand for high-speed Internet access, advanced TV services, and new mobile and cloud services." Roger Ponder, CEO
Disclosure
(Spectrum Global Solutions [OTC: SGSI] is a client of RedChip Companies, Inc. SGSI agreed to pay RedChip Companies, Inc. a monthly cash fee for six (6) months of RedChip investor awareness services.)
Boingo Wireless (NASDAQ: WIFI), the leading distributed antenna system (DAS) and Wi-Fi provider that serves carriers, consumers and advertisers worldwide, today announced the Company's financial results for the second quarter ended June 30, 2018.
Record quarterly revenue of $59.6 million increased 21.6% year-over-year and exceeded guidance
Agrees to acquire Elauwit Networks to enter multifamily market for Wi-Fi connectivity
The Backstory: Boingo Wireless, Inc. (NASDAQ: WIFI) helps the world stay connected. Our vast footprint of DAS, Wi-Fi and small cells reaches more than a billion people annually, making Boingo one of the largest providers of indoor wireless networks. You'll find Boingo connecting people at airports, stadiums, military bases, convention centers, and commercial properties. To learn more about the Boingo story, visit www.boingo.com
Worldwide Ocaliva net sales of $43.2 million in the second quarter of 2018
Leading Phase 3 NASH program continues to advance: REGENERATE trial in NASH patients with advanced liver fibrosis expected to report data in the first half of 2019
Intercept Pharmaceuticals, Inc. (NASDAQ: ICPT), a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, announced its financial results for the quarter ended June 30, 2018.
Key Quote: “During the first half of 2018, we made good progress executing against our key strategic priorities in our Phase 3 NASH program and our PBC commercial efforts. Our leadership position in NASH is supported by what we believe to be the most comprehensive dataset of any ongoing development program and we remain on track to report top line data from the Phase 3 REGENERATE trial in first half of 2019. On the commercial front, the expansion of our U.S. sales and commercial infrastructure is expected to further enhance our capacity to provide access to Ocaliva to eligible PBC patients and the healthcare providers who treat them.” Mark Pruzanski, M.D., President and Chief Executive Officer of Intercept
The Backstory: Intercept is a biopharmaceutical company focused on the development and commercialization of novel therapeutics to treat progressive non-viral liver diseases, including primary biliary cholangitis (PBC), nonalcoholic steatohepatitis (NASH), primary sclerosing cholangitis (PSC) and biliary atresia. Founded in 2002 in New York, Intercept has operations in the United States, Europe and Canada.
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Marijuana Companies Push to Go Public and Uplist
The marijuana industry is experiencing incredible growth thanks to the shifting legal landscape in North America.
According to cannabis research firm ArcView, legal weed sales in North America catapulted higher by 33% in 2017, and they're on track to grow by an average of 28% per year through 2021, leading to nearly $25 billion in annual sales.
A big part of that growth will come from our neighbor to the north which, by the passage of the Cannabis Act (officially bill C-45), becomes the first industrialized country in the world to green-light the sale of cannabis to adults. All told, this could add $5 billion in yearly sales, on top of what the Canadian industry is already generating from domestic medical weed sales and exports to foreign countries, where medicinal cannabis has been legalized.
These big dollar signs have Wall Street and investors very intrigued, which is a big reason marijuana stock valuations have headed through the roof. It's also the basis of why Canadian-listed pot stocks are looking to uplist to more reputable exchanges, and why U.S.-based pot companies are looking to Canada to go public.
This year alone, we've witnessed two Canadian marijuana stocks uplist their shares from the over-the-counter (OTC) exchange to more reputable exchanges in the United States. It all began with Cronos Group in late February, which listed its shares on the NASDAQ.
Not long thereafter, the largest marijuana stock in the world by market cap, Canopy Growth Corporation (NYSE: CGC), uplisted to the New York Stock Exchange. Both Cronos Group and Canopy Growth believe that by listing their shares on these prestigious exchanges, they'll attract more investors, improve liquidity, and perhaps gain validity from Wall Street institutions.
Even more recently – just over two weeks ago – grower, processor, and medical cannabis researcher Tilray (NASDAQ: TLRY) became the first Canadian pot stock to go the initial public offering (IPO) route via a U.S. exchange. On an intraday basis, shares of Tilray doubled from its listing price of $17 on Thursday, July 19, to $34.10 on Monday, July 23, before finally cooling off a bit.
With the stock up more than 150 percent since the start of 2018 and 60 percent since April alone, the bullish case for Sunrun (NASDAQ: RUN) is over, according to Morgan Stanley. Analyst Stephen Byrd downgraded RUN from Overweight to Equal-weight with a price target lifted from $8 to $15.
The Backstory: Sunrun benefited over the past few months from an improvement in solar market fundamentals, Byrd said in the downgrade note, while noting the company still has multiple catalysts to support further upside:
A new state policy in California that dictates all new homes under three stories tall need to include a solar panel as of 2020.
Regulatory approval to operate in the "very sunny and very large" electricity market of Florida.
Tightening spreads on solar financing that result in more favorable borrowing costs.
ITC clarifications by the IRS could improve profitability in the early 2020s.
Smaller-than-expected negative impacts from tax reform and solar panel import tariffs.
Why It Matters: Despite the catalysts, the stock's massive run since the turn of the year implies a "less compelling path for outperformance," Byrd said. Morgan Stanley's revised $15 price target is based on a sum-of-the-parts model that values the current customer base at $8 per share and future developments at $7 per share.
Quote of the Week
"When no one wants the stock, that's often the best time to buy. Some of my best institutions buy when everything is out of favor."
- Byron Roth CEO of ROTH Capital Partners
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