There’s More To Sin Penny Stocks Than Cigarettes & Beer
Ever hear of vice penny stocks or sin stocks? If you haven’t, that’s ok because I’m going to tell you the answer to the question, “what are sin stocks?” These are shares of companies that are in certain industries that deal with our daily vices. Consider things like alcohol, cannabis, gambling, tobacco, and now, magic mushrooms. As our vices evolve, so does the industry. In light of tech taking a big part of the stock market’s recent turnaround, where do sin stocks stack up?
Let’s look at one of the popular Sin ETFs, AdvisorShares Vice ETF (ACT Report). Since late-March, the ETF has bounced back from a low of $16.16 to current prices around $23. Not a bad move and one in line with the overall market’s breakout move. However, for those less inclined to focus on a broad basket of companies, there are other ways to add a little “Sin” to your watch list.
But how do you know which stocks to watch? Honestly, it starts with simple research. You should also have an understanding of certain industries that your watch list stocks are in. Things like alcohol and tobacco are much more established sectors than cannabis or psychedelics. In light of that, there could be more risk to take into consideration in certain circumstances. With this in mind, let’s take a look at some sin penny stocks to watch this month.
Sin Penny Stocks To Watch: New Wave Holdings Corp.
New Wave Holdings Corp. (CSE: SPOR) is focused on the emerging psychedelics sector. Not only that, it has taken its understanding of what is known as mycologicals. Much like how the first movers of CBD and non-psychoactive cannabis products established market dominance early on, New Wave is taking up a similar approach. It’s Key Business Units include:New Wave Recreational, New Wave Mental Health, and New Wave Natural.
Where early investors in cannabis represented something more closely to the customers buying it, mushroom stocks are seeing a surge of notable investors come in early. “Shark Tank” investor Mr. Wonderful Kevin O’Leary and Canopy Growth Corp. CEO Bruce Linton were some of the early investors in the first mushroom stock IPO. Peter Thiel, the multi-billionaire investor, and Paypal co-founder, put big money bets into the industry. Billionaire investor Mike Novogratz has also been vocal about the psychedelic medicine space.
New Wave is building a globally focused, diversified business to take first-mover status in the blooming psychedelics & mind medicine industry. The company has positioned itself to benefit from current legal psychedelics use as well as creating functional mushroom products for addressing the growing interest in nutritional supplements. Last month, the company announced that it will support the Delos Psyche Research Group.
The group is conducting a study designed to determine the impact of ingesting small amounts of hallucinogenic or psychedelic substances for medicinal or therapeutic purposes. These are things like lysergic acid diethylamide or LSD. Furthermore, the company also brought on Dr. Carolyn Myers, Ph.D as VP Of Commercial Development. She will further the R&D around psychedelic compounds, including psilocybin, MDMA, LSD, and ketamine.
Sin Penny Stocks To Watch: Drive Shack Inc.
What other vices can you think of? Leisure activities maybe? While these may not necessarily be a “Sin”, there’s something to be said about indulging in leisure activities. Drive Shack Inc. (DS Stock Report) is an owner and operator of golf-related leisure and entertainment businesses. If you’re familiar with “Top Golf”, the model appears similar.
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The company has locations in Orlando, West Palm Beach, Raleigh, and Richmond and caters to the adult crowd. Beer specials, food specials, entertainment specials and the like are part of the company’s business model. Shares of DS stock surged in May and continued to new June highs of $3.05.
There hasn’t been much of any news to speak of. However, entertainment venues and COVID are pretty closely tied. What I mean by this is that news of the economy reopening could have acted as its own catalyst for companies like Drive Shack. But if you look at the company’s Twitter feed, you’ll see it making updates.
Over the last month or so, Drive Shack tweeted that it reopened multiple locations. These included Raleigh as of 6/26 and new hours at West Palm. The company made another tweet on this location in particular as well: “UPDATE: WEST PALM BEACH CURFEW HAS BEEN LIFTED AND OUR NORMAL OPERATING HOURS WILL RESUME.”
With this week’s news of a promising vaccine candidate, this could be sentiment related to a broader economic reopening. In a recently filed 13G/A on July 10th, it shows BlackRock, Inc. holding 1,434,617 shares or about 2.1% of the share class.
Sin Penny Stocks To Watch: Hexo Corp.
Shares of Hexo Corp. (HEXO Stock Report) has been one of the slow and steady marijuana penny stocks to watch recently. While there’ve been sporadic jumps in the stock, overall, the trend has followed along with HEXO stocks 50 Day Moving Average Line (yellow line on chart).
On Thursday, Hexo Corp was back in rally mode. This came flowing its latest news on the international stage. The company announced the launch of medical cannabis products in Israel. This is through a 24-month agreement with Israeli medical cannabis company, Breath of Life International Ltd. According to the company, HEXO completed the first shipment of 493 kilograms even amid coronavirus restrictions, internationally.
“We are proud to introduce HEXO’s premium indoor medical cannabis products into the Israeli market,” said Hugo Goldman, BOL’s CFO and interim CEO. The products are already receiving positive feedback from both patients and retailers, and we are looking forward to continuing to expand our strategic relationship with HEXO in Israel.”
Despite a slow move, you can’t disagree with the current trend in HEXO stock for right now. Since mid-May, shares have steadily climbed (with a few 1-day jumps) in line with that 50DMA line. Will this remain the case for July or could this latest update make for an interesting month? Drop a comment below and leave your thoughts on HEXO.
Vice Penny Stocks To Watch: Acreage Holdings Inc.
Acreage Holdings Inc. (ACRG Stock Report)(ACRGF) is another one of the pot penny stocks to watch right now. Despite lighter volume than we normally see in popular penny stocks, ACRG stock started climbing on Friday. The company is a multi-state operator cultivating, processing, distributing, and retailing cannabis. Its geographic segments include New England, Mid-Atlantic, Midwest, West, and South.
This week, Acreage stock gained attention after the company’s late-breaking news on July 9th. Acreage announced that the Massachusetts Cannabis Control Commission granted the company provisional licenses for the retail sale of adult-use cannabis in Worcester and Shrewsbury.
Acreage will add adult-use retail sales to its existing The Botanist dispensary in Worcester, MA. That opened as a medical marijuana treatment center in 2018. It will open a new The Botanist dispensary in Shrewsbury, MA.
Similar to Hexo, Acreage has traded around its 50DMA while there hasn’t been a clear support/resistance set, ACRG stock continues to gravitate back to that level. Will the news help shed a more positive light on the sin penny stock?