Look Who Won the “Pot Lottery”

Tech stocks are back in the driver’s seat

The Nasdaq Composite raced ahead of the pack on Monday. The tech-focused index dominated the averages with a gain of more than 1% while the S&P and the Dow both finished the day with a gain of 0.7%.

But yesterday’s fireworks happened after the closing bell when Google parent company Alphabet Inc. (NASDAQ:GOOGL) announced earnings that beat expectations for top and bottom-line growth.

Unfortunately, beating analyst numbers wasn’t good enough for investors.

“Despite the inflated earnings beat, Alphabet shares declined in after-hours trading, ending the extended session down about 3%,” MarketWatch reports. “Wall Street seemed concerned about the company’s hefty spending on research and development and on capital expenditures.”

But if we look past the Google fiasco, more investors are finding new reasons to buy shares of their favorite companies this earnings season…

As stocks settle into a groove this week, positive earnings reactions are spreading throughout the market.

Investors love to focus on the big earnings beats and misses. When a company tops estimates by a penny or two, everyone rushes to their monitor to see if the stock is jumping in extended trade. If a company misses the mark, folks usually expect the worst.

Sometimes a stock reacts exactly as you’d expect. Sometimes it doesn’t. But the market’s reaction is more important that the numbers in the press release. If you’re trading stocks, you must take everything in the context of price.

When we move beyond the big earnings headlines this quarter, we’re beginning to see more and more positive earnings reactions in the stock market.

“The average performance of stocks on their earnings reaction days so far this earnings season has been a gain of 1.12%,” Bespoke Investment Group notes. “If this pace keeps up for the remainder of the reporting period, it would be the best earnings season in terms of stock performance since the early stages of the bull market.”

Average 1 Day

It appears most investors were expecting the worst form this earnings season following the December meltdown. Now the sold-out bulls are forced to chase their favorite stocks as they leap higher…

While earnings continue to impress the herd, pot stocks are catching fire again.

Cannabis plays are up to their old tricks again as many of the biggest momentum names in the sector continue to build on their January gains.

When we last checked in on Tilray Inc. (NASDAQ:TLRY) almost one month ago, the legal weed upstart was just cracking the $80 mark after more than three months of consolidation. After a quick run to $100 and a retest of its lows, this stock is once again threatening to break out.

Tilray isn’t even the pot stock posting the biggest headlines this week. This dubious distinction belongs to a little Canadian operation called Weekend Unlimited Inc. Apparently, Weekend Unlimited won the pot lottery — literally! It now owns the rights to the highly coveted ticker “POT”.

“Tiny Vancouver-based cannabis company Weekend Unlimited Inc. saw its stock gain as much as 148 percent Friday after winning out over 40 other companies in the first-ever lottery for a stock ticker held by Canadian exchanges,” Bloomberg reports. “Weekend Unlimited, which previously traded under YOLO, short for ‘you only live once,’ wasn’t exactly lacking a memorable ticker.”

winning the lottery

This is why I love the stock market. You couldn’t make up these stories if you tried…

Weekend Unlimited’s “lotto win” also offers a valuable lesson: If you’re ever unsure which stock to buy in a hot industry, always go with the one that has the catchiest ticker symbol. Speculators will always choose the memorable, clever tickers.

Sincerely,

Greg Guenthner

PS: This urgent announcement from our publisher comes down TONIGHT. And because what he says in this short video clip could affect you, you’ll want to watch it right away…

You can view it by clicking right here.

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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