The Canadian cannabis stocks we’ve weeded out could be undervalued based on their relative strength index (RSI)
SmallCapPower | November 25, 2019: Relative Strength Index, or RSI, is an indicator measuring the degree of recent price changes. RSI is used to evaluate overbought or oversold conditions in the price of an asset. Generally, RSI is considered overbought when above 70 and oversold when below 30. Traders often use RSI as a potential indicator towards what direction an asset’s price might move. If a stock is overbought, that means that analysts or traders believe it is trading above its intrinsic value. If a stock is oversold, analysts or traders believe it is trading below its intrinsic value and has the potential for a price bounce. Today we’ve found four oversold Canadian cannabis stocks: cannabis stocks with an RSI below 30 on a basis of their 7-Day RSI.
*Share price data as at November 21, 2019, data obtained from S&P Capital IQ
Avicanna Inc. (TSX:AVCN) – $1.99
Avicanna is a biopharmaceutical company focused on the research, development, manufacturing and commercialization of plant-derived, cannabinoid-based products. The Company has four main product offerings. These include:
- Cannabinoid-based Pharmaceuticals with several products in various stages of pre-clinical and clinical development.
- A Phyto-therapeutic product line designed for medical use in a range of formats, such as transdermal patches, topicals, tablets, sublingual sprays and oil tinctures (expected to launch during Q1/20).
- A Derma-cosmetics product line, which is formulated to maintain the health and beauty of the skin and includes anti-aging and skin moisturizers (expected to launch by the end Q4/20).
- Cannabis Extracts and Purified Cannabinoids: Large-scale, low-cost, organic, and sustainable source of THC/CBD-based cannabis extracts/purified cannabinoids for B2B, medical, cosmetic and pharmaceutical companies.
Avicanna has two cultivation assets in Santa Marta, Colombia with a current capacity of ~290,000 sq. ft, which is expected to increase to 410,000 sq. ft by the end of 2019.
- Market Cap: $44.4M
- 30-Day Return: -44.3%
- 90-Day Return: -54.7%
- 30-Day Average Trading Volume: 111,470
- 7-Day RSI: 24.1
Ovation Science Inc. (CSE:OVAT) – $0.20
Ovation Science is a skincare research and development company that provides pharmaceutical-grade topical and transdermal cannabis products for the medical, recreational and beauty global markets. Leveraging its patented Invisicare® technology, Ovation develops industry-leading transdermal and topical cannabis products using a licensing/royalty business model along with marketing its own CBD product lines. The Company’s proprietary Invisicare® technology has a 4-10 times higher transdermal absorption rate of CBD/THC compared to other products tested. Ovation Science Inc. (CSE:OVAT) announced plans to launch Invibe MD, a line of CBD wellness skincare products addressing topical skin issues, sore muscles, and sleep issues with the tagline “Better with CBD,” as well as the planned launch of ARLO CBD Beauty, its anti-aging skincare line infused with CBD. Both lines, Invibe MD and ARLO CBD Beauty, will be manufactured using the Company’s patented Invisicare® delivery system. The products are expected to reach store shelfs during CYQ3/19.
- Market Cap: $4.6M
- 30-Day Return: +0.0%
- 90-Day Return: -28.6%
- 30-Day Average Trading Volume: 10,560
- 7-Day RSI: 26.2
VIVO Cannabis Inc. (TSXV:VIVO) – $0.26
Formerly known as ABcann Global Corporation, VIVO Cannabis manufactures and distributes medical cannabis. The Company gained its production and sales license from Health Canada in April 2018. VIVO’s capacity estimates for 2019 include 1,500 kg of indoor cannabis with an additional 14,000 kg grown in greenhouse facilities. To increase supply and distribution, the Company entered into agreements relating to strategic equity investments in Canadian cannabis retailers National Access Cannabis Corp., Choom Holdings Inc, and Westleaf Cannabis Inc, all of which either have operations within Ontario or have plans on operating in Ontario. On August 6, VIVO announced that the Company’s wholly-owned subsidiary, ABcann Medicinals Inc, has been granted a Standard Cultivation license from Health Canada for its Kimmetts facility in Napanee, Ontario.
- Market Cap: $76.9M
- 30-Day Return: -11.9%
- 90-Day Return: -42.2%
- 30-Day Average Trading Volume: 325,720
- 7-Day RSI: 30.1
The Supreme Cannabis Company, Inc. (TSX:FIRE) – $0.79
The Supreme Cannabis Company is based in Canada and focuses on selling to the wholesale sector for the medical cannabis market in Canada. Through its subsidiary, 7ACRES, the Company operates a 440,000 sq.ft cultivation facility outside of Toronto. The Company’s portfolio also includes: 1) Blissco Cannabis Corp, a premium cultivator in British Columbia; 2) Truverra Inc., a global medicinal cannabis brand and licensed cultivator; 3) Cambium Plant Sciences, a plant genetics and cultivation company; 4) Medigrow Lesotho, an southern Africa-based cannabis oil producer; 5) Supreme Heights, an investment platform that works on CBD brands in the UK and; 6) a brand partnership and licensing deal with Khalifa Kush Enterprises Canada.
- Market Cap: $279.9M
- 30-Day Return: -6.0%
- 90-Day Return: -46.3%
- 30-Day Average Trading Volume: 2,018,770
- 7-Day RSI: 25.9
Ubika Research/SmallCapPower has received compensation from Avicanna to provide analyst research coverage. For full disclosure please visit here >>
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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