Are These Small Cap Sin Stocks On Your Watch List This Week?
We’ve got a short week ahead and plenty of penny stocks to watch in lieu of Thanksgiving week. Black Friday, Cyber Monday, and the like should have some eCommerce and retail names on the radar. However, with coronavirus still in the spotlight, this year’s holiday shopping season might look a little different.
We probably won’t’ be seeing those holiday “door-buster” pictures thanks to social distancing. We’re also not likely to see the traditionally huge family gatherings in certain states that have restrictions. With plenty of states already implementing specific guidelines, it will be interesting to see how the public reacts.
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Whatever the case may be, we’ve still got plenty of things to track even with a short week. Thursday the market’s closed and Friday there’s a half day. Meanwhile, this week traditionally marks the beginning of a seasonally strong period of time for the stock market.
“If you believe history will repeat itself this year, as it often does, then you might want to get long the whole market on Tuesday.”
Jim Cramer, Host Of Mad Money
More To Watch Than Retail Penny Stocks
Whether or not that will actually be the case this year is the unknown factor we won’t confirm until, well, Tuesday. Regardless, even in light of current economics, the stock market itself has been strong following the November election period. In fact, despite a small pullback late last week, the S&P and Dow both were hovering near all-time high levels over the past few weeks. Will we see a holiday rally into year-end?
We should also keep in mind that there are changing tides in certain segments of the market. One of these is the looser regulations on “sin” or “vice” industries. Looser restrictions on things like cannabis and even psychedelics could have celebrations looking (and feeling) much different in 2020. What’s more, is that even traditional vice industries like alcohol and tobacco also gain some attention this time of year. With that in mind, are some of these sin stocks on your watch list right now?
Vice Penny Stocks To Watch #1: Havn Life Sciences
Havn Life Sciences (HAVLF Stock Report) has seen momentum building for most of the 4th quarter of the year so far. As the focus has shifted on alternative means of treatment, mental health has become a big focus. Considering the toll that the pandemic alone may have taken on people’s mental health, this may be a very hot topic this year.
Just to give an idea, according to the research firm, KFF’s Tracking Poll conducted in mid-July, 53% of adults in the United States reported that their mental health was negatively impacted due to worry and stress over the coronavirus. This is in addition to the already mounting mental health issues across the world even before coronavirus. Aside from places like Oregon, the District of Columbia, and Colorado pushing for easing regulations, California lawmakers will push to decriminalize psychedelics as well. Scott Wiener, the California state senator who plans to introduce the legislation, will push for decriminalizing psychedelics in the state.
What To Watch With Havn
With the opioid crisis, there’s a dire need for alternative medicine focused on mental health. This has sparked blooming interest in advancing psychedelics used in a controlled setting. Havn has focused on developing a portfolio of psychedelic and nutraceutical products. In fact, this month the company announced the launch of 7 new products set for a 2021 rollout. These are all based on a retail footprint focused on health and wellness. Chief Executive Officer Tim Moore explained, “Havn Life’s team has done an incredible job bringing a complete and wide range of initial products to launch in 2021. The team will continue to work on additional formulations and products that will be launched later in 2021.”
What’s more, is that several of the original names that helped build the early footing in the cannabis industry are on board the company. Most notably, former Aphria CEO, Vic Neufeld sits as the executive chairman of the company. During his time at Aphria, he was highly regarded for building the company into a multi-million dollar industry-leading organization by the time he retired. He’s now picked back up and taken a focus in the latest sector to echo a similar tone as cannabis: magic mushrooms.
Vice Penny Stocks To Watch #2: Planet 13 Holdings
Planet 13 Holdings (PLNHF Stock Report) is another one of the “sin stocks” to watch right now. The company is most notable for its cannabis mecca in Las Vegas. This week the marijuana penny stock could be on the radar as it releases earnings on Tuesday. During the pandemic, some of the businesses that’ve actually benefited include cannabis dispensaries. Many places have designated them essential businesses due to the medical nature of cannabis. Furthermore, the company just raised roughly $22 million USD for expansionary efforts among other things.
What To Watch With Planet 13
Recently the company announced the opening of its Medizin dispensary in Las Vegas. Larry Scheffler Co -CEO of Planet 13 explained, “We are thrilled to reopen the Medizin dispensary after a long hiatus. Our popular first dispensary generated $4.9 million in the last quarter it was open, since then the Nevada market has grown 54%, and the Allegiant stadium has opened a couple of blocks away.”
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But again, heading into this week eyes will certainly be zeroing in on earnings. If you remember in October, the company reported preliminary 3rd quarter results. Planet 13’s preliminary results for the quarter showed a 110% increase in revenue, quarter-over-quarter. At $22.8 million, this was the highest quarter in the company’s history with in-store sales and home delivery helping lead the way. Margins also showed strength at roughly 50% with the dispensary serving some 1,625 customers per day, in average, in the store itself.
Vice Penny Stocks To Watch #3: Akerna Inc.
Akerna Inc. (KERN Stock Report) hasn’t been the most consistent vice stock to watch. In fact, overall, 2020 has been a rough year for the company’s shares. However, it could be on the radar as day traders continue playing the intra-day volatility trend that KERN stock has established over the past few weeks. On Friday, the marijuana stock jumped over 14% in one of its most active sessions in 2 weeks.
\While most marijuana stocks have some exposure to the plant itself, Akerna focuses on more of a “pick and shovel” approach. The company provides software technology to cannabis companies. In an update last week, the company said that it anticipates a 78% increase over average daily sales for 2020 during the Thanksgiving weekend (11/25 – 11/28), totaling approximately $270 million.
What To Watch With Akerna
As discussed above, there’s likely more to take into consideration this time of year than just traditional retail sales. James Ahrendt, Business Intelligence Architect at Akerna said that “On average, Thanksgiving tends to be one of the Top 5 sales holidays of the year, and we expect that trend to continue this year. In the past, we’ve seen huge spikes in sales on Wednesday and Friday since most dispensaries are closed on Thursdays.”
KERN stock has clearly been one of the more volatile marijuana stocks to watch. After Friday’s surge into the weekend, this could be on watch heading into the Monday session in light of the above-average activity recently. The company’s also coming off of a bad earnings miss. Akerna reported a wider loss, and missed EPS and sales estimates. However, something to keep in mind, if Akerna can pull it off, is that new states are going online with cannabis sales. The biggest question now is will these new outlets adopt the Akerna platform?
Vice Penny Stocks To Watch #4: Playa Hotels & Resorts
Rarely might you expect hotels to be on the list of vice stocks to watch. But think about it. What better way to enjoy a vice than at an all-inclusive resort? Playa Hotels & Resorts (PLYA Stock Report) has a “sinful” side to it. The company’s adults-only brands like Hyatt Zilara, The Hilton Playa del Carmen, and Sanctuary offer a unique experience to their customers. From unlimited drinks to even offering a “Romance Concierge,” Playa could fit the mold for sin stocks to watch.
What To Watch With Playa
The company has been going through its own reopening following coronavirus restrictions. Earlier this month, the company reopened the Hilton La Romana all-inclusive adult and family resorts in the Dominican Republic. It also resumed normal operations at its Yucatán resorts last month.
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Since March, PLYA stock has recovered significantly from its 2020 lows. Friday saw highs of $4.84 marking a bounce of more than 270% over the last 8 months. What’s more, is that the company announced last week a public offering for over $55 million by selling shareholders affiliated with Farallon. While Playa won’t receive funds from this offering, it will see Farallon’s ownership reduced to roughly 13%.
Shareholders took this as a positive. Last week was one of the most active weeks for PLYA stock this month with daily volumes reaching as much as 10.2 million shares traded. With new locations reopening and the company continuing to focus on streamlining its ownership stakes, will the 270%+ move extend into the remainder of the year?
