3 Recent Buys – NVO, CBW, CHV

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Here’s a quick update on three more purchases in my portfolio in the past few days. This time, I have two new purchases and one addition.

  • First purchase: Who likes to catch falling knives? Apparently I do…Over the last couple of weeks, I have initiated and added to new position in Novo Resources Corp (NVO.V). Its seen some downward pressure and I am already in deep red with this position. Still, I believe that there is potential for some great returns here. For those unfamiliar, Novo Resources is a gold exploration company that is focused in the Pilbara region of Western Australia. There has been a new gold rush in the region, with junior companies staking claims on land packages — and Novo holds a nice big chunk, most of it on its own while some is in joint venture with Artemis Resources. Novo has got a lot of hype lately and has seen the stock price shoot up after some good initial results, but some sample results lately have put a damper and the stock has been punished. I have clearly got in too early, but am willing to hold through the next set of results that come in January. This is the good thing about resource sector — as long as the gold is present in the ground, you can just sit back and wait for the market to turn. I bought in three tranches and currently hold 1,000 shares at an average cost basis of CAD$7.25. See corp presentation for more details about the company.
  • For the second purchase, I added to an existing position in Cannabis Wheaton Income Corp (CBW.V), with 3,000 shares @ CAD$0.85. This is my second purchase of the company and I wrote more details about this company in my first post (click here for details).
  • The last purchase for this iteration is a another weedstock. I initiated a position in Canada House Wellness (CHV.C), a small cap vertically integrated licensed producer. Instead of rehashing, I will simply link to this great post from Deep Dive, which details the company. I initiated with 3,000 shares @ CAD$0.315.

What do you think of these purchases? Share your thoughts below.

10 thoughts on “3 Recent Buys – NVO, CBW, CHV

    • Thats right, Tom. The legislation is expected to pass making it legal for recreational use on or before Jul 1, 2018.

      Lots of speculation in the space, and crazy valuations…some make sense, but some dont. But definitely lots of money to be made in this frenzy.

      R2R

  1. Riding ‘high’ on these stocks. Always love reading these updates as I’m always introduced into new stocks/sectors that I never would even look or consider for myself. Weed, like cryptocurrencies are slowly becoming more mainstream and widely accepted. Time will tell.

    • Thats right, DivHut. Theres lots of money flowing into the weed sector. Definitely in the midst of a boom and (first) bull market. There is also some consolidation going on, and some strategic investments taking place — the first biggest one being from STZ investment buying 10% of WEED to look at cannabis-infused drink offerings. Interesting times, no doubt, and I just want a small piece of the pie 🙂

      R2R

  2. Safety says:

    Novo seems very speculative based on the way you talk about investing.

    Personally, I like producers, especially right now as there are a lot of very cheap stocks like GCM.TO and JAG.TO that are trading at less than 2x forward EBITDA at the current gold price.

    • Yes, explorers are more speculative by very nature. I still think NVO is a good bet, based on the risk/reward profile. There is more interest in explorers these days as the mid and large companies scramble to secure and find deposits for their future cash flow. The amount of discoveries are falling and some studies are already calling peak gold behind us, although that should taken with a grain of salt.

      I have looked at JAG in the past, but shied away, based on a couple of risk issues — like local problems and possibility overtaxation/tax grab from the government in Brazil. I havent really looked at GCM…will need to check it out.

      Thanks for stopping by and sharing.

      cheers
      R2R

  3. I’m with you on the ‘catching falling knives’ problem.

    Been thinking about going in deeper on CAH. They’ve been getting punished but still think there is a lot of upside there.

    Thanks for sharing! Glad someone else out there feels the same internal conflicts I do 🙂

    • Its a common theme that investors face everyday. Especially hurtful when you are playing in a volatile and speculative-by-nature sector. I havent really looked at any of the megacaps lately…most of them are running ok on cruise control for me 🙂

      Best
      R2R

  4. Nice road i dig it. You ever see the back of a dollar bill on weed man? Theres a guy in the bushes watch out! Haha. Ive stayed away since they arent profiting much. Canopy is really interesting especially after the stz deal.. i think there will be another pullback and maybe ill jump in then. Once legal everyone can grow 5 plants so the blackmarket will be flooded soon enough. The dollar per gram fee and the added hst hurts the business imo. It will be interesting to see how it all pans out.

    • Yeah the mmj stocks are due for a pullback after an epic run since the summer. The index has risen too sharply and we are due for some profit taking. Should give you some good entry points if you want to get in. Really interesting space and yes, I agree, theres no moat…but doenst mean that one cant make money while it goes through the rapid expansion phase.

      Best
      R2R

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