QuickChek – June 8, 2021



Gevo Set to Join Russell 3000® Index

Gevo announced that it expects to join the broad-market Russell 3000 Index at the conclusion of the 2021 Russell indexes annual reconstitution, effective after the US market opens on June 28, 2021

Research, News & Market Data on Gevo

Watch recent presentation from NobleCon17



Kratos Completes Major Milestone in Build-Out of Advanced Space Radio Monitoring System

Kratos Defense & Security Solutions announced that it has successfully completed the Critical Design Review (CDR) for the build out of the advanced space radio monitoring system for the Communications Regulatory Authority of the State of Qatar

Research, News & Market Data on Kratos



Endeavour Silver Drilling Intersects High-Grade Silver-Gold Mineralization In Multiple Veins At The Terronera Project In Jalisco, Mexico

Endeavour Silver announced that it has intercepted high grade silver-gold mineralization in a number of structures near the Terronera vein

Research, News & Market Data on Endeavour Silver

Watch recent presentation from NobleCon17



Avivagen to Present at LD Micro Conference Presentation on June 10th, at 10:30 A.M. EST

Avivagen announced that it will be virtually presenting at the LD Micro Conference on June 10th

Research, News & Market Data on Avivagen

Watch recent presentation from Avivagen



Comstock to Present at the LD Micro Invitational XI Investor Conference

Comstock Mining announced that it will present at the 2021 LD Micro Invitational XI Investor Conference on Wednesday, June 9, 2021

Yesterday’s research report on Comstock from Mark Reichman, Senior Research Analyst of Natural Resources at Noble Capital Markets

Research, News & Market Data on Comstock

Watch recent presentation from Comstock Mining



PDS Biotech Announces Release of Interim Data for PDS0101 in NCI-Led Phase 2 Clinical Study

PDS Biotech announced the presentation of interim data from the Phase 2 trial at the American Society of Clinical Oncology (ASCO) 2021 Annual Meeting

Research, News & Market Data on PDS Biotech

Watch recent presentation from PDS Biotech



Flotek Welcomes Lisa Mayr To Board Of Directors

Flotek Industries welcomes Lisa Mayr to its Board of Directors, increasing its directors from six to seven

Research, News & Market Data on Flotek

Watch recent presentation from NobleCon17

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Capturing More Performance with Gold Prices Rising


Image credit: Michael Steinberg (Pexels)


How Does Gold Compare with Junior Gold Mining Stocks?

 

Gold has been on the move for over a year. Not always up, but never dead in the water. Long-term investors (10+ years) look for long-term reliable price appreciation of their assets. For this objective, gold in all its forms has treated them well. Specifically for traders (3 months or less), high volatility equates to the ability to generate more profits in a shorter time period. There are a number of ways to gain gold exposure for either investors or those more inclined to trade. They can physically purchase the metal, buy funds (ETF and mutual) that invest in gold, futures market, or own gold mining companies (full-fledged operations or junior miners). I pay attention to a number of the junior miners with information available here on Channelchek, so I thought it would be useful to compare a Gold ETF (GLD) that tracks the physical price and, as a proxy for miners, a junior gold mining ETF(GDXJ).

With talk of inflation and a weaker $US Dollar, there are expectations that gold’s pace of upward movement may increase. Below, in three charts is what I discovered about gold compared with junior gold mining stocks for both investors and traders.

 

Gold Versus Junior Gold Mining Stocks

 

 

Above is a three-month daily comparison of gold (orange) against junior gold miners (purple). The swings in the mining stocks are much more abrupt; it has been faster on the upside and more pronounced on the downside as well. The overall rise in gold prices during this whole period has been up. Based on the ETF, gold has risen 11.35%. The more volatile junior gold mining ETF is up by almost an additional 5% for the three-month period. The greater volatility in an upward market during this period has paid investors in junior miners better.

 

 

Looking out over a year where gold has had moves in both directions, this weekly chart shows that miners have been more volatile over this period as well. Those that had long positions during downtrends felt more of a negative impact; those long during uptrends enjoyed greater gains. While gold was up for the year, using this ETF as a proxy for junior mining stocks, miners outperformed by a wide margin. 

 

 

The two charts above included a very strange period in market history. So I thought I’d take a look back three years to confirm the behavior. Once again (and I also did go back as far as 2008) during all the periods I looked at, miners rose faster when gold prices rose and sunk faster when they went down. During 2020, they sunk particularly quickly as many mining operations went on hiatus. The performance over three years was significantly in favor of those producing the commodity rather than the commodity itself.

 

More Thoughts

Whether you’re a long-term investor or a trader trying to capitalize on swings (up or down) it seems that the junior miners may yield better results if the direction is called correctly. As mentioned earlier, there is data, research and analysis on a number of Junior Gold Miners on Channelchek, here is a sampling to get started:

Great Bear Resources Ltd. (GTBAF) is a mineral exploration company in Canada that primarily explores for gold. Noble Capital Markets provides full research coverage on the company, those reports are available on Channelchek. On Wednesday, June 9th a virtual roadshow will be held by Channelchek where attendees can listen to management and ask questions. This will be a worthwhile presentation for those interested to learn more about Great Bear.

Allegiant Gold Ltd. (AUXXF) explores and evaluates resource properties in the United States. Its flagship project is the company-owned Eastside Gold project covering an area of 72 square kilometers located in Tonopah, Nevada. Current research and price targets can be found on Channelchek. To view Allegiant’s most recent roadshow video, go to this link.

Aurania Resources, Ltd. (AUIAF) is a Canada-based junior mining exploration company engaged in the identification, evaluation, acquisition, and exploration of mineral property interests, with a focus on precious metals and copper. Its flagship asset, The Lost Cities-Cutucu Project, is in southeastern Ecuador in the Province of Morona-Santiago. Current research and price targets can be found on Channelchek. To view Allegiant’s most recent roadshow video, go to this link.

Golden Predator Mining (NTGSF) is a Canada-based gold exploration and development company that is advancing its flagship project, the Brewery Creek Gold Mine, located in Canada’s Yukon territory. Current research and price targets can be found on Channelchek. A recent C-Suite interview with Noble analyst Mark Reichmann is available at this link.

 

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading:

Minerals Industry Report -Metals & Mining Fourth Quarter 2020 Review and Outlook

 

Virtual Road Show Series – Wednesday June 9 @ 1:00pm EDT

Join Great Bear Resources President and CEO Chris Taylor for this exclusive corporate presentation, followed by a Q & A session moderated by Mark Reichman, Noble’s senior research analyst, featuring questions taken from the audience. Registration is free and open to all investors, at any level.

Register Now  |  View All Upcoming Road Shows

 

 

 

 

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Bill Ackman’s Most Unusual SPAC Deal (PSTH)


Image Credit: Portal Focka (Flickr)


Are Investors Getting Even More than They Bargained for with the Pershing Square SPAC?

 

The pace of SPAC creation runs in cycles, as do other areas of finance. When money is flowing, and merger targets seem plentiful, SPAC IPOs begin to bloom. When targets are fewer or investors see more attractive alternative opportunities, SPAC creation wanes. Last year when hedge fund manager Bill Ackman’s SPAC raised a record $4bn, he helped kick off a wave of new SPAC IPOs, all hunting for great candidates to fulfill the company objective.

Ackman’s massive SPAC, Pershing Square Tontine Holdings (PSTH), did not find its one “unicorn,” which was its stated intent. Instead, it became creative and looks to add to shareholder value in an altered and even more diversified way. Back in February of this year, Vivendi the owner of Universal Music Group (UMG) announced that it would spin off its music business and list it in the Netherlands in late 2021. Once the spinoff is completed, Vivendi would still hold a one-fifth stake, the Chinese tech company Tencent would own another fifth,  the remainder would have been distributed to investors. This would unlock value for Vivendi holders in the growing streaming services by delinking them from the larger company.

 

Where PSTH Fits In

Ackman saw the UMG portfolio of artists and streaming music profits as a means to fulfill and uphold the objective for PSTH shareholders. Pershing Square Tontine is now moving forward to own 10% of UMG.  This transaction to own a fractional share of a company, is not what was expected by investors, onlookers, and probably not even Ackman a year ago.

Instead of purchasing a large well established private company and owning and controlling it, the 10% stake that is to be purchased by PSTH is based on a $40b valuation. It will distribute shares to PSTH investors after the Netherlands listing later this year. This partial, noncontrolling deal is new ground for SPACs, but that isn’t where it ends. After the 10% stake of UMG is owned by the SPAC investors, PSTH will have “change” left over. With the remaining cash PSTH will continue as a blank check company and continue to look for another target. Ackman will also create a new vehicle intended to provide the PSTH investors with other options without tying up cash up-front.

This trilogy arrangement is new to the industry and was initially met with PSTH shares weakening. They have since recovered somewhat.

 

 

The Other Two Shots at a Unicorn

The initial SPAC (PSTH) will remain a cash shell company with substantially less dry powder with which to spend on a target. However, it will have access to up to $2.9b through an agreement with Ackman’s hedge fund. Pershing Square Funds owns about 29% of the company (PSTH) and is not placing a two-year deadline on finding the right second target.

The third vehicle does not take the form of a SPAC at all. In a world where private company valuations rise and fall, this additional option for PSTH investors makes timing and time limit, less of an issue. Ackman is calling this new structure a Special Purpose Acquisition Rights Company (SPARC). The holders will have the option but not the obligation to participate in the next deal. The SPARC does not list on any exchange, it doesn’t raise money until a target is identified, and there is no obligation to exercise the option to be in the deal once struck.

 

Take-Away

Although the partial Universal Music stake may be a little “off-beat” for a SPAC, the overall results over time may turn out more beneficial than the conventional SPAC acquisition expected. The arrangement may also set in motion more creativity in the SPAC acquisition space in that it provides investors more possibilities, albeit more complex deals to understand.

SPAC investors do have the opportunity to opt-out and receive the remaining pro-rata share of their investment, so the risk to the holders of PSTH was always that an appropriate deal would not be found. They now at least have the option to weigh the appropriateness of this trilogy arrangement and forecast its future value for them.

 

Suggested Content:

 

Lifecycle of a SPAC

Analysis of a SPAC



Regulation of a SPAC

Merger of a SPAC

 

Sources:

https://www.bloombergquint.com/gadfly/bill-ackman-spac-umg-deal-make-room-for-the-sparc

https://apnews.com/article/entertainment-music-arts-and-entertainment-business-3ec22cadc0cc5292fb69baa1b96bf98d

https://amp.ft.com/content/d77d9883-6b01-4458-9180-8579aa4d346f

 

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QuickChek – June 7, 2021



PDS Biotechnology Set to Join Russell Microcap® Index

PDS Biotechnology announced that it is set to join the Russell Microcap® Index effective after the US market opens on June 28, 2021

Research, News & Market Data on PDS Biotechnology

Watch recent presentation from PDS Biotechnology



Comstock Set to Join Russell Microcap® Index

Comstock Mining announced that it is set to join the Russell Microcap® Index effective after the US market opens on June 28, 2021

See today’s research report on Comstock from Mark Reichman, Senior Research Analyst of Natural Resources at Noble Capital Markets

Research, News & Market Data on Comstock Mining

Watch recent presentation from Comstock Mining



PLBY Group Announces Proposed Public Offering of Common Stock

PLBY Group announced that it has commenced an underwritten public offering of 4,000,000 shares of its common stock

Research, News & Market Data on PLBY Group



Avivagen Inc. Announces Proposed Extension of Warrants and Grant of Options

Avivagen announced that it will be requesting approval from the TSX Venture Exchange for the extension of the expiration date of warrants exercisable to purchase 2,029,250 common shares

Research, News & Market Data on Avivagen

Watch recent presentation from Avivagen



Energy Fuels to Present at LD Micro Invitational on Tuesday, June 8, 2021 as Hall of Fame Presenter

Energy Fuels announced hat it will be a Hall of Fame Presenter at the upcoming LD Micro Invitational XI virtual event on Tuesday, June 8 at 11:00 AM ET

Research, News & Market Data on Energy Fuels

Watch recent presentation from Energy Fuels



Capstone Green Energy Corporation (Nasdaq:CGRN) To Present At LD Micro InvitationaL XI

Capstone Green Energy announced that management will present virtually at the upcoming LD Micro Invitational XI event on Wednesday, June 9 at 1:30 PM ET

Research, News & Market Data on Capstone Green Energy

Watch recent presentation from Capstone Green Energy



enCore Energy Corp To Present at LD Micro Invitational XI

enCore Energy announced the company will be hosting a corporate presentation at the LD Micro Invitational XI Event

Research, News & Market Data on enCore Energy

Watch recent presentation from enCore Energy

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QuickChek – June 4, 2021



Indonesia Energy Corporation Successfully Completes the Drilling of First New Well at Kruh Block to Final Total Depth

Indonesia Energy announced that it has successfully completed the drilling of its first new well at Kruh Block (known as “Kruh 25”) to its final total depth

Research, News & Market Data on Indonesia Energy

Watch recent presentation from Indonesia Energy



Bunker Hill Mining Announces Filing of PEA Technical Report

Bunker Hill Mining announced filing of an independent Preliminary Economic Assessment for the Bunker Hill Mine in the world-class Silver Valley region of Idaho, USA

Research, News & Market Data on Bunker Hill Mining



Neovasc Inc. Reports Results of Annual General Meeting of Shareholders

Neovasc announced the results of the votes on matters considered at its Annual General Meeting of Shareholders held on June 3, 2021 in Vancouver, B.C.

Research, News & Market Data on Neovasc



Comtech Telecommunications Corp. Announces First International 5G Location Services Contract with a Tier-One Carrier

Comtech Telecommunications announced that during Q3 of fiscal 2021, its Location Technologies group was awarded its first international 5G location services contract with a leading tier-one mobile network operator in Australia

Research, News & Market Data on Comtech

Watch recent presentation from NobleCon17



Capstone Green Energy Corporation Signs 10-Year Comprehensive Service Contract On 2 MWs Installed In Mexico

Capstone Green Energy announced that DTC Ecoenergía, a Capstone distributor for Mexico, signed a new 10-year Factory Protection Plan service contract for two Capstone Signature Series C1000S systems installed in Mexico

Research, News & Market Data on Capstone Green Energy

Watch recent presentation from Capstone

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Does the Russell Reconstitution Impact Small-Cap Performance During June?


image credit: Jessica Cross (Flickr)


The Repeated Outperformance in June of the Small Cap Russell 2000 Index

 

“Sell in May and Go Away” is an investment axiom that suggests investors would do better to lighten their positions in stocks during the summer months. Is this good advice? It doesn’t tell us when in May that we should take our chips off the table. Is it May 1, Memorial Day weekend, mid-month? And, is one sector or index more impacted than others? This May, the Nasdaq 100 was at its high for the month on May 1; it then dropped 6.02% through May 12 and finished May 2021 down only 2.09%. All the major stock indices were negative by May 12. However only the Nasdaq closed the month below its start. Unless you were in Nasdaq stocks, If you didn’t sell, there’s a good chance your portfolio is now higher.

What will June and the summer bring? I don’t know of any market sayings for June. I guess you were supposed to have already reduced your positions in May. I do know, from my years on Wall Street, that the trading desks during the summer months are often controlled by the rookies and interns. They’re often trying to demonstrate their abilities while the veterans are out playing golf or lying on a beach in South Hampton. Could this be the root of the “sell in May…” advice?

Serious investors don’t care about sayings; they care about company data, economic numbers, trends, and probabilities. Last May/June, I looked back at performance in June as part of a discussion on the Russell Reconstitution. I decided to look back at the trends on each of the four major benchmarks again and share with readers what I find. Let’s see if history provides a verifiable pattern across the most followed market indices.

 

June Results Since 2000

Out of the past 20 years, the Russell 2000 has returned positive results 12 times (57%). This doesn’t sound overly impressive until you compare it to the Dow 30, which had been up in June for only 8 of the years (38%), the S&P 500 was up 11 of the 21 (52%), or the Nasdaq that was up 10 Junes (48%) over the past 21 years. So, over the period, only two indexes were up during June more than half the time. I should point out here that this 21-year period was not “cherry-picked” to compare performance history.  A quick review of the data for the ten years prior to this and the ten years prior to that only reinforced this June “trend” with the small-cap index exceeding the others. (Data from provided by Koyfin, Closing Data May 31-June 30)

In terms of performance, the track record for the Russell 2000 is even more compelling. With a one-month return average of .33% in June since 2000, the small-cap Russell has returned more than 1% more than the next closest index which is Nasdaq (-.67%).

 

 

There May Be a Reason

Rather than caution that past history is not an indication of future performance, I’ll instead make sure readers know that during this period, the best year was 7.40% (June 2019), and the worst June was negative 18.60% (June 2002). So, any particular year has its own circumstances. But there is probably something at play during June with this small-cap index. The Russell indexes are being reworked and this creates activity that could be providing a predictable tailwind. The added companies typically have a good amount of new interest surrounding them. This added interest causes fresh institutional buyers of the new stocks being included and often a rise in their value leading up to and for a short time after their inclusion.

 

Take Away

Investors should be aware of how the calendar impacts the Russell 2000 index, which measures the lower 2000 stocks of the 3000 largest capitalized companies. Small-cap stocks perform differently than large cap stocks and the various sectors have varied performance for their own reason. Understanding what some of those reasons are by following the analysts reports provided on Channelchek related to industries and individual companies, as well as articles on the Reconstitution, SPACs, Biotech, Energy, Mining and more, help pave the way to increased probabilities of being in the right stocks at the right time.

 

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading:

The Russell Index Reconstitution, What to Know

Buying the Dip, Risks and Rewards



Trading Accounts for Children

U.S. Government Spending Provides Investment Opportunities

 

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QuickChek – June 3, 2021



PDS Biotechnology Expands VERSATILE-002 study of PDS0101 and KEYTRUDA® in Advanced Head and Neck Cancer

PDS Biotechnology announced the protocol amendment to expand its Phase 2 VERSATILE-002 study to include patients, in an additional arm, who have failed prior checkpoint inhibitor (CPI) therapy (CPI refractory patients)

Research, News & Market Data on PDS Biotechnology

Watch recent presentation from PDS Biotech



Great Bear Provides Two New Detailed High-Grade Long Sections and Reaches 318 Drill Holes Reported on Two Year Anniversary of LP Fault Discovery

Great Bear Resources announced results from its ongoing fully funded $45 million 2021 exploration program at its 100% owned flagship Dixie Project in the Red Lake district of Ontario

Research, News & Market Data on Great Bear

Watch recent presentation from Great Bear



Kratos Appoints Deanna Lund to Board of Directors

Kratos Defense & Security Solutions announced the appointment of Deanna Hom Lund to the Company’s Board of Directors

Research, News & Market Data on Kratos



Indonesia Energy Corporation Participates in Noble Capital Markets Video Interview

President Frank Ingriselli Provides Updates on IEC’s New Drilling Program at Kruh Block and Anticipated Milestones for IEC

Research, News & Market Data on Indonesia Energy

Watch recent presentation from Indonesia Energy



Esports Entertainment Group Completes Acquisition of Helix eSports and ggCircuit

Esports Entertainment Group announced the closing of its acquisition of Helix eSports LLC (“Helix eSports”) and ggCircuit LLC (“ggCircuit”)

Research, News & Market Data on Esports Entertainment Group

Watch recent presentation from EEG



Throwback Thursday – Most Read in May 2021

Here is What You (our audience) Read the Most During May 2021



Lineage Cell Therapeutics Reports Additional Cases Of Retinal Tissue Restoration In Dry AMD Patients Treated With Opregen RPE Cells

Lineage Cell Therapeutics announced that it plans to host a webinar featuring external therapeutic area experts in age-related macular degeneration (AMD), on June 10, 2021 at 4pm ET

Research, News & Market Data on Lineage Cell Therapeutics

Watch recent presentation from NobleCon17



Ocugen Expands COVAXIN™ Commercialization Rights to Include Canada

Ocugen and Bharat Biotech announced that they have entered into an amendment to expand Ocugen’s exclusive territory to commercialize COVAXIN™ to now also include Canada

Research, News & Market Data on Ocugen

Watch recent presentation from NobleCon17



Gray Amends Merger Agreement With Meredith Corporation

Gray Television announced that it offered to amend the parties’ Merger Agreement to increase the total consideration payable by Gray

Research, News & Market Data on Gray Television



Avivagen Inc. Announces Results for the Second Quarter Ending April 30, 2021

Avivagen Inc announced its unaudited financial results for the second quarter of 2021

Research, News & Market Data on Avivagen

Watch recent presentation from NobleCon17

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QuickChek – June 2, 2021



ISG Launches Expanded Global Cybersecurity Unit to Help Clients Contend with Growing Threats

Information Services Group announced it has launched an expanded global cybersecurity unit to help clients contend with the growing threat of cyberattacks

Research, News & Market Data on ISG

Watch recent presentation from NobleCon17



Helius Medical Technologies Appoints Frederick Fantazzia as VP of Sales & Marketing, North America

Helius Medical Technologies announced the appointment of Frederick Fantazzia to the position of Vice President of Sales & Marketing, North America, effective June 1, 2021

Research, News & Market Data on Helius Medical

Watch recent presentation from Helius Medical



electroCore Announces Publication of Study on Non-Invasive Vagus Nerve Stimulation

electroCore announced the publication of a peer-reviewed paper in the journal NPJ Parkinson’s Disease

Research, News & Market Data on electroCore



Eagle Bulk Shipping Inc. Acquires Two Modern Ultramax Bulkcarriers

Eagle Bulk Shipping announced that it has purchased two high-specification 2015-built scrubber-fitted Ultramax bulkcarriers for total consideration of USD 44 million

Research, News & Market Data on Eagle Bulk Shipping

Watch recent presentation from NobleCon17



Capstone Green Energy (Nasdaq:CGRN) To Announce Fourth Quarter & Full Fiscal Year 2021 Results On Thursday, June 10, 2021

Capstone Green Energy announced it expects to release full financial results for its fourth quarter and full fiscal 2021 year, ended March 31, 2021

Research, News & Market Data on Capstone Green Energy

Watch recent presentation from Capstone



Gray Announces Quarterly Cash Dividend Of $0.08 Per Share

Gray Television announced that its Board of Directors has authorized a quarterly cash dividend of $0.08 per share of its common stock and Class A common stock

Research, News & Market Data on Gray Television

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Fear of Tapering May Set the Markets Tone for Summer


Image Credit: Forsaken Fotos (Flickr)


Stock Market Performance – Looking Forward and Looking Back

 

The stock market performance for June and July could hinge on a number of questions investors are considering right now. What they’d like to know is: Will inflation numbers continue to indicate an uptrend of the cost of goods and services? And, will the Fed continue a policy to keep interest rates steady in the face of what may be an economy stimulated to the point of demand-driven price increases?  

The first scheduled opportunity the markets will have this month to hear from the Fed and weigh each word is Friday, June 4.  Federal Reserve Chairman Jerome Powell is scheduled to speak at a global conference about central banks and climate change. The U.S. Fed’s mandate is specifically employment and inflation and has not concerned itself with environmental or political issues. Other central banks around the world have increasingly expanded their role to include the climate and environmental topics.  The slightest step for the U.S. central bank in that direction would indicate a significant departure from its stated role.

 

Look Back

Two of the three broader stock market indices, (S&P 500, Nasdaq 100, and Russell 2000) were positive during May. The S&P 500 gained .88%, the Russell 2000 was up 1.21% and Nasdaq 100 lost 1.62% of its value. When annualized, the S&P 500 and Russell 2000 are both at a pace above the historical average annual return of the market. After 2020, some equity investors may have become velocitized with the pace and climb experienced after the initial March selloff. Those investors may find this above-average pace still disappointing. The Nasdaq 100 “breather” during May, could also concern some – others understand that slower growth is healthier and more sustainable.

 

 

Viewing the indices from the longer six-month perspective, all three are well above their historical average pace. The top performer is the Russell 2000 small-cap stock index. Over the six months, this measure of smaller companies increased by 22.92%. The S&P 500 which measures a broad base of large-cap companies was up 15.28% for the half-year period. And the Nasdaq 100 which was the overall outperformer for much of 2020 lagged the other two indices with a still-respectable 11.41% increase.

Further segmenting the better performing (6-months) Russell 2000 small-cap index, the better performing small-cap stocks was small-cap value (IWN) which returned 33.77%. Small-cap growth (which was down modestly in May) has returned 12.88% over six months.

 

Hottest Market Sectors

Over the measured six months (December – May), the industry sectors have rotated positions from late 2020. Energy, which had been beaten up and left for dead through much of last year, rose 37.42%. Financials are benefitting from expectations of a steepening yield curve and a large supply of cash in the system. Financials are up 34.75.% in just six months’ time. Materials are up 22.81% as plans for infrastructure projects are being put in place with mega budgets behind them. Communications companies turned in 20.46% for the period. Health care is up 13.80% and materials 3.61%. Utility stocks that are popular for their dividend payments are up by only 3.83%, as higher interest rates would provide alternatives for income/dividend investors.

 

 

Take-Away

The word investors are going to be attuned to most in June and through the Summer months is “Taper.” Some voting and non-voting members have used the “T” word in various speeches recently, and it appeared as a discussion item in minutes from the last FOMC meeting. Notching up rates at any time this year would happen well in advance of the expectations the Fed set for the markets through last year.

With this, the most intense volatility could surround the afternoon of June 16 when the FOMC wraps up its two-day June meeting, and Fed Chair Powell will address reporters. While Powell speaking always gets the market’s attention, minutes from the April FOMC meeting suggested the Fed may begin to taper if the economy continues to make great growth strides. He’ll be expected to explain how the Fed defines that growth.

Other dates worth noting include Thursday, June 10, when CPI will be reported by the BLS, and each Thursday’s unemployment report, then Consumer Confidence on June 29.

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading

Inflation’s Impact on Stocks – Four Scenarios

The Sustainability of Growing Margin Debt



What Stocks do You Buy When the Dollar Goes Down?

Managing Investment Portfolio Risk

 

Sources:

https://www.wsj.com/articles/central-banks-jump-into-climate-change-policy-fray-11621166402?mod=article_inline

https://www.newyorkfed.org/research/calendars/nationalecon_cal.html

 

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Fear of Tapering May Set the Market’s Tone for Summer


Image Credit: Forsaken Fotos (Flickr)


Stock Market Performance – Looking Forward and Looking Back

 

The stock market performance for June and July could hinge on a number of questions investors are considering right now. What they’d like to know is: Will inflation numbers continue to indicate an uptrend of the cost of goods and services? And, will the Fed continue a policy to keep interest rates steady in the face of what may be an economy stimulated to the point of demand-driven price increases?  

The first scheduled opportunity the markets will have this month to hear from the Fed and weigh each word is Friday, June 4.  Federal Reserve Chairman Jerome Powell is scheduled to speak at a global conference about central banks and climate change. The U.S. Fed’s mandate is specifically employment and inflation and has not concerned itself with environmental or political issues. Other central banks around the world have increasingly expanded their role to include the climate and environmental topics.  The slightest step for the U.S. central bank in that direction would indicate a significant departure from its stated role.

 

Look Back

Two of the three broader stock market indices, (S&P 500, Nasdaq 100, and Russell 2000) were positive during May. The S&P 500 gained .88%, the Russell 2000 was up 1.21% and Nasdaq 100 lost 1.62% of its value. When annualized, the S&P 500 and Russell 2000 are both at a pace above the historical average annual return of the market. After 2020, some equity investors may have become velocitized with the pace and climb experienced after the initial March selloff. Those investors may find this above-average pace still disappointing. The Nasdaq 100 “breather” during May, could also concern some – others understand that slower growth is healthier and more sustainable.

 

 

Viewing the indices from the longer six-month perspective, all three are well above their historical average pace. The top performer is the Russell 2000 small-cap stock index. Over the six months, this measure of smaller companies increased by 22.92%. The S&P 500 which measures a broad base of large-cap companies was up 15.28% for the half-year period. And the Nasdaq 100 which was the overall outperformer for much of 2020 lagged the other two indices with a still-respectable 11.41% increase.

Further segmenting the better performing (6-months) Russell 2000 small-cap index, the better performing small-cap stocks was small-cap value (IWN) which returned 33.77%. Small-cap growth (which was down modestly in May) has returned 12.88% over six months.

 

Hottest Market Sectors

Over the measured six months (December – May), the industry sectors have rotated positions from late 2020. Energy, which had been beaten up and left for dead through much of last year, rose 37.42%. Financials are benefitting from expectations of a steepening yield curve and a large supply of cash in the system. Financials are up 34.75.% in just six months’ time. Materials are up 22.81% as plans for infrastructure projects are being put in place with mega budgets behind them. Communications companies turned in 20.46% for the period. Health care is up 13.80% and materials 3.61%. Utility stocks that are popular for their dividend payments are up by only 3.83%, as higher interest rates would provide alternatives for income/dividend investors.

 

 

Take-Away

The word investors are going to be attuned to most in June and through the Summer months is “Taper.” Some voting and non-voting members have used the “T” word in various speeches recently, and it appeared as a discussion item in minutes from the last FOMC meeting. Notching up rates at any time this year would happen well in advance of the expectations the Fed set for the markets through last year.

With this, the most intense volatility could surround the afternoon of June 16 when the FOMC wraps up its two-day June meeting, and Fed Chair Powell will address reporters. While Powell speaking always gets the market’s attention, minutes from the April FOMC meeting suggested the Fed may begin to taper if the economy continues to make great growth strides. He’ll be expected to explain how the Fed defines that growth.

Other dates worth noting include Thursday, June 10, when CPI will be reported by the BLS, and each Thursday’s unemployment report, then Consumer Confidence on June 29.

Paul Hoffman

Managing Editor, Channelchek

 

Suggested Reading

Inflation’s Impact on Stocks – Four Scenarios

The Sustainability of Growing Margin Debt



What Stocks do You Buy When the Dollar Goes Down?

Managing Investment Portfolio Risk

 

Sources:

https://www.wsj.com/articles/central-banks-jump-into-climate-change-policy-fray-11621166402?mod=article_inline

https://www.newyorkfed.org/research/calendars/nationalecon_cal.html

 

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QuickChek – June 1, 2021



PDS Biotech to Host Oncology R&D Day on June 16, 2021

PDS Biotechnology announced it will host an Oncology R&D Day for analysts, investors, and the scientific community from 8:00 – 10:00 AM ET on Wednesday, June 16th

Research, News & Market Data on PDS Biotechnology

Watch recent presentation from PDS Biotech



Great Bear Strengthens Management Team and Provides Update on Regional Projects

Great Bear Resources announced key management appointments

Research, News & Market Data on Great Bear Resources

Watch recent presentation from Great Bear



Palladium One Drills 48 Meters @ 2.2 g/t within 116 Meters @ 1.2 g/t Palladium Equivalent at Haukiaho Trend, Finland

Palladium One Mining announced that 12 holes (1,943 metres) were drilled on the Haukiaho trend at Haukiaho Trend, Finland

Research, News & Market Data on Palladium One Mining

Watch recent presentation from Palladium One



Onconova Therapeutics Announces The Appointment Of Mark Gelder, M.D., As Chief Medical Officer

Onconova Therapeutics announced that Mark Gelder, M.D. will be joining Onconova as Chief Medical Officer (CMO), effective as of June 14, 2021

Research, News & Market Data on Onconova Therapeutics

Watch recent presentation from NobleCon17



Cannabis Growth Operator, Schwazze, Announces Agreement to Acquire Southern Colorado Growers

Schwazze signed definitive documents to acquire the assets of Southern Colorado Growers in Huerfano County, Colorado

Research, News & Market Data on Schwazze

Watch recent presentation from Schwazze



LAFC Sign Esports Entertainment Group as Its Esports Tournament Platform Provider in Multi-Year Deal

Esports Entertainment Group signed a multi-year partnership with the Los Angeles Football Club to be the Major League Soccer franchise’s esports tournament provider

Research, News & Market Data on Esports Entertainment Group

Watch recent presentation from EEG



Garibaldi Mobilizes Exploration Crews

Garibaldi Resources announced that exploration personnel have been deployed to the Company’s camp at km 45 on the Eskay Creek road

Research, News & Market Data on Garibaldi Resources

Watch recent presentation from NobleCon17



Lineage Cell Therapeutics Reports Additional Cases Of Retinal Tissue Restoration In Dry AMD Patients Treated With Opregen RPE Cells

Lineage Cell Therapeutics announced that restoration of retinal tissue was observed in two additional patients enrolled in the Company’s Phase 1/2a study of its lead product candidate, OpRegen

Research, News & Market Data on Lineage Cell Therapeutics

Watch recent presentation from NobleCon17

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Do Canadian Companies Remain Private Because of Corporate Governance



Canadians Aren’t Taking their Companies Public – and it’s a Problem for the Country’s Economy

 

Stock markets in Canada and the United States are booming right now. So why do so few companies want to join them?

With the exception of a couple of bad years, the last two decades have been a great time to be a public company. Valuations are at record highs and executive compensation has more than doubled as a percentage of corporate profits. Nevertheless, fewer and fewer companies and their managers want to take advantage of these opportunities.

As we show in a recent research study, the number of companies choosing to go public in Canada has been declining sharply since the late 1990s. In fact, so few companies have been interested in listing publicly that the total number of Canada’s public operating companies has declined by more than 40 per cent on a per capita basis. American public markets are not much better. They’re about half the size they were back in the 1990s.

There is surprisingly little concern about this development among Canada’s regulators and politicians. This inattention is probably a mistake. Canada has four times the number of public companies per capita as the United States and the United Kingdom. It depends on its public markets to finance and grow new businesses in a way no other developed country does.

 

Tech, Pharma Need Public Companies

Even more important is the impact Canada’s public markets has on the ability to grow companies in high-value industries like technology or pharmaceuticals. Experts have pointed out that Canada actually performs well at generating new ideas and starting new businesses.

The country fails, however, on scaling these new businesses up to a size where they can compete in world markets. Aside from one or two companies like Shopify, we don’t create large technology, software, nanotechnology, biotechnology or pharmaceutical companies.

Canada starts with technology that’s the best in the world in these sectors, but something happens before our companies become big enough to kick-start a new industry here. What happens? These valuable businesses get sold to larger companies within their industries, most of which aren’t Canadian.

One study found that of 164 acquisitions of Canadian technology companies between 2004 and 2012, only a single company was purchased by a Canadian buyer. This turns into a vicious cycle — because we don’t have large, mature companies in many industries, the buyers of our promising startups are foreign, and because our startups are acquired early in their development, we don’t grow into large, mature companies.

 

This article was republished with permission
from 
The
Conversation
, a news site dedicated to sharing ideas from academic
experts.  It was written by
and represents the research-based opinions of
Bryce Tingle N. Murray Edwards Chair in Business Law, University of
Calgary, and
J. Ari Pandes Associate Professor of Finance, University of Calgary

 

No Spin-off Benefits

This dynamic means we lose the spin-off benefits of mature companies: we don’t train our workers in things like enterprise software sales or commercial nanotechnology research, and we don’t get new business ideas from older companies. Silicon Valley wouldn’t have become what it is today without beginning with large, mature firms like Xerox and Hewlett-Packard. Most entrepreneurs get their world-class ideas from working with more established companies.

What does Canada’s failure to scale technology businesses have to do with our public market problem? When a startup raises capital from outsiders, it must eventually provide them with an exit strategy so they can sell their shares. There are basically two kinds of exit: selling the company, usually to a larger company in its line of business, or taking the company public.

A public listing allows a company to continue to grow while permitting its early investors to sell their shares in the stock market.

Over the past two decades, an increasing number of companies have decided they would rather sell themselves than go public. What happened?

 

Explanations Don’t Hold Up

In our research, we find that the usual explanations for the public market decline aren’t plausible. They either don’t explain why the decline is happening both in Canada and the United States, or they contradict the dominant fact of the last two decades: public companies have been getting more and more valuable.

Instead, we look at the ways public markets have changed to make corporate governance more painful, less effective and higher risk.

The biggest change over the past two decades or so has been a revolution in the ways public companies are run. Generally, this has involved the transfer of power from managers and boards of directors to less informed and incentivized third parties like proxy advisers and even money managers.

By and large, these initiatives haven’t improved corporate performance, but they have significantly increased the unpleasantness of going public. They take decisions about compensation, board composition, strategy and selling the company out of the hands of the people who know the business best and, as summarized in our research, give it to outsiders who are less effective.

This transfer of power also disadvantages workers, creditors and other constituencies important to the ultimate success of any business.

 

The Way Forward

In our recently published paper, we give a variety of concrete suggestions to reduce the penalties incurred by executives and boards if they take their companies public, and to make going public more attractive.

 

They Include:

  • Eliminating the majority voting requirements that were adopted by the TSX in 2014, which can make directors more vulnerable to shareholder action
  • Introducing effective staggered boards to give corporations the option to provide their managers greater independence from shareholder pressure
  • Eliminating an executive compensation disclosure regime that has produced precisely the opposite results from those intended
  • Abandoning any suggestion there are one-size-fits-all corporate governance best practices
  • Reining in the power of proxy advisers, who have become the de facto sources of corporate governance and executive compensation regulation in this country.

 

These steps would clearly remove major barriers to Canadian companies choosing to scale up in this country.

 

Suggested Reading:

 

Lifecycle of a SPAC

Copper Facing an Onslaught of Demand



How PPI impacts CPI

Inflation’s Impact on Stocks, 4 Scenarios

 

Stay up to date. Follow us:

           


Stay up to date. Follow us:

Do Canadian Companies Remain Private Because of Corporate Governance?



Canadians Aren’t Taking their Companies Public – and it’s a Problem for the Country’s Economy

 

Stock markets in Canada and the United States are booming right now. So why do so few companies want to join them?

With the exception of a couple of bad years, the last two decades have been a great time to be a public company. Valuations are at record highs and executive compensation has more than doubled as a percentage of corporate profits. Nevertheless, fewer and fewer companies and their managers want to take advantage of these opportunities.

As we show in a recent research study, the number of companies choosing to go public in Canada has been declining sharply since the late 1990s. In fact, so few companies have been interested in listing publicly that the total number of Canada’s public operating companies has declined by more than 40 per cent on a per capita basis. American public markets are not much better. They’re about half the size they were back in the 1990s.

There is surprisingly little concern about this development among Canada’s regulators and politicians. This inattention is probably a mistake. Canada has four times the number of public companies per capita as the United States and the United Kingdom. It depends on its public markets to finance and grow new businesses in a way no other developed country does.

 

Tech, Pharma Need Public Companies

Even more important is the impact Canada’s public markets has on the ability to grow companies in high-value industries like technology or pharmaceuticals. Experts have pointed out that Canada actually performs well at generating new ideas and starting new businesses.

The country fails, however, on scaling these new businesses up to a size where they can compete in world markets. Aside from one or two companies like Shopify, we don’t create large technology, software, nanotechnology, biotechnology or pharmaceutical companies.

Canada starts with technology that’s the best in the world in these sectors, but something happens before our companies become big enough to kick-start a new industry here. What happens? These valuable businesses get sold to larger companies within their industries, most of which aren’t Canadian.

One study found that of 164 acquisitions of Canadian technology companies between 2004 and 2012, only a single company was purchased by a Canadian buyer. This turns into a vicious cycle — because we don’t have large, mature companies in many industries, the buyers of our promising startups are foreign, and because our startups are acquired early in their development, we don’t grow into large, mature companies.

 

This article was republished with permission
from 
The
Conversation
, a news site dedicated to sharing ideas from academic
experts.  It was written by
and represents the research-based opinions of
Bryce Tingle N. Murray Edwards Chair in Business Law, University of
Calgary, and
J. Ari Pandes Associate Professor of Finance, University of Calgary

 

No Spin-off Benefits

This dynamic means we lose the spin-off benefits of mature companies: we don’t train our workers in things like enterprise software sales or commercial nanotechnology research, and we don’t get new business ideas from older companies. Silicon Valley wouldn’t have become what it is today without beginning with large, mature firms like Xerox and Hewlett-Packard. Most entrepreneurs get their world-class ideas from working with more established companies.

What does Canada’s failure to scale technology businesses have to do with our public market problem? When a startup raises capital from outsiders, it must eventually provide them with an exit strategy so they can sell their shares. There are basically two kinds of exit: selling the company, usually to a larger company in its line of business, or taking the company public.

A public listing allows a company to continue to grow while permitting its early investors to sell their shares in the stock market.

Over the past two decades, an increasing number of companies have decided they would rather sell themselves than go public. What happened?

 

Explanations Don’t Hold Up

In our research, we find that the usual explanations for the public market decline aren’t plausible. They either don’t explain why the decline is happening both in Canada and the United States, or they contradict the dominant fact of the last two decades: public companies have been getting more and more valuable.

Instead, we look at the ways public markets have changed to make corporate governance more painful, less effective and higher risk.

The biggest change over the past two decades or so has been a revolution in the ways public companies are run. Generally, this has involved the transfer of power from managers and boards of directors to less informed and incentivized third parties like proxy advisers and even money managers.

By and large, these initiatives haven’t improved corporate performance, but they have significantly increased the unpleasantness of going public. They take decisions about compensation, board composition, strategy and selling the company out of the hands of the people who know the business best and, as summarized in our research, give it to outsiders who are less effective.

This transfer of power also disadvantages workers, creditors and other constituencies important to the ultimate success of any business.

 

The Way Forward

In our recently published paper, we give a variety of concrete suggestions to reduce the penalties incurred by executives and boards if they take their companies public, and to make going public more attractive.

 

They Include:

  • Eliminating the majority voting requirements that were adopted by the TSX in 2014, which can make directors more vulnerable to shareholder action
  • Introducing effective staggered boards to give corporations the option to provide their managers greater independence from shareholder pressure
  • Eliminating an executive compensation disclosure regime that has produced precisely the opposite results from those intended
  • Abandoning any suggestion there are one-size-fits-all corporate governance best practices
  • Reining in the power of proxy advisers, who have become the de facto sources of corporate governance and executive compensation regulation in this country.

 

These steps would clearly remove major barriers to Canadian companies choosing to scale up in this country.

 

Suggested Reading:

 

Lifecycle of a SPAC

Copper Facing an Onslaught of Demand



How PPI impacts CPI

Inflation’s Impact on Stocks, 4 Scenarios

 

Stay up to date. Follow us:

           


Stay up to date. Follow us: