Category: Uncategorized

Water Is The New Gold (PHO)

Investors have been told to be patient before investing in this resource for a long time. Perhaps now investors should consider this sector ready to take off. The water infrastructure investment boom is here. The EPA estimated that over 1 trillion dollars will be needed over the next 30 years just to maintain the viability of basic water infrastructure. That sounds like a good long term investment.

John Gabriel wrote a Morningstar report in 2014 highlighting the need for prudence as the fund is not a “pure water” play – there is pipe and pumping manufacturing along with water treatment and 16% of the portfolio is invested in water utilities – which have significant industries outside the investable water complex.

That’s not to say the fund won’t participate in the upcoming water boom. With the recent crisis of Flint, Michigan, Americans are now more aware than ever that water treatment and filtering systems are an important process when providing water. As fresh water supplies tighten and government regulations become more onerous, that could be the catalyst that launches this sector into a long term bullish frenzy.

PHO is an interesting play in the water world. The Invesco ETF has about 750 million in assets spread over 28 different water stocks. One thing to keep in mind is that some of the bigger water players like GE and Dow Chemical are excluded because significant revenue is generated outside the sector. However, that means the stocks included can greatly benefit by providing customized solutions that larger companies might not be able to fulfill.

Emerging markets see water infrastructure demand growing at a 10% rate. That’s an attractive growth rate and between that and America’s needs, water might not be the slow and steady “boring” investment that past investors passed up for more lucrative plays. The world doesn’t only need water, it needs piping, pumping and filtration. That is why this sector is a lot more than just water. It’s an infrastructure play that has been dormant for far too long.

PHO is just one of many water options to invest in, but from a technical analysis perspective, there is something I like that tells me to start a position sooner than later. If you look at the chart below, the 200 ma is about to be breached and become support again. The last time this happened PHO went on a 25% bullish run. If you get in now, it’s possible this ETF could be raining profits in your portfolio for a long time to come.


This Penny Stock Is About To Pop (MYMMF)

Mym Nutraceuticals (MYMMF) is an over the counter penny stock. These type of stocks are inherently riskier than traditional stocks traded over exchanges. However, this one deserve serious consideration. With the recent sell off in the sector, the buy conditions couldn’t be better.

Canadian recreational pot passed legislation in October and Canada is about to be open for business. The cannabis sector is poised for a comeback after a year long slump. Prices are near lows and the time to speculate might be now.

MYMMF has a very interesting project worthy of your attention and that is The Wheedon Project. Located in Quebec, this 1.5m square foot facility will be one of the largest greenhouses in Canada. The project owns 365 acres of land and plans to include a cannabis university with a cannabis museum. They were approved by the city of Wheedon and await licensing from Heath Canada. Their website is updated often with new construction photos and they predict project completion in 2020. As a test run, 30,000 sf of greenhouse will be dedicated to producing sometime in 2019. More information can be found here MYM Nutraceuticals

Penny stocks are notorious for having little or no use for technical analysis, the volume is thin, most price jumps rely on news, and they are easily manipulated. That being said, the 3 month chart below looks like a textbook double bottom. If the second pivot point is complete, a rebound of prices should be around the corner.

Another reason I think this stock is a decent play is they reported 1.9m in cash according to Google Financials. That seems healthy for a young start up with 20 employees. With two greenhouse facilities coming online next year and other cannabis related revenue streams in the works, perhaps it’s time to open a position.

In 2018, weed stocks took a beating. 2019 might be the year they start recovering. If you are looking for a speculative stock in a speculative sector, MYMMF will do the trick. Just be careful. You wouldn’t want to see your investment go up in smoke.