Market participants always seem to be in a good mood in front of holiday weekends, but they seem to be particularly upbeat right now in anticipation of the Memorial Day Holiday. It is the first real post-pandemic holiday we have celebrated, and just to have some normal interaction will be a cause for celebration.
What tends to happen in front of holidays is that the sellers are less aggressive, and traders are more effective at running up some select names. The best example today is AMC Entertainment (AMC) which is up around 27%. Some of the buyers of the stock want to believe that this sort of action is fundamentally driven. It isn't. This is just classic, pre-holiday, thin-market, social media-driven, Ponzi scheme action. That doesn't mean it can't persist, but it probably isn't a good place to put the kid's college fund for the long haul.
Many stocks have already made sizable moves, and new entries are becoming tougher. One group I'm watching more carefully is cannabis. The group is still dealing with restrictions that not only hamper trading in the stocks but the companies ability to raise capital and operate like a 'normal' business. Many supports of legal cannabis are disappointed by the disinterest of the Biden administration but are still hopeful that some legislation will eventually be passed.
The main names that I'm focused on are leveraged to growth in the U.S. and include AdvisorShares Pure US Cannabis ETF (MSOS) , Trulieve Cannabis (TCNNF) , Cresco Labs (CRLBF) , Village Farms (VFF) , Green Thumb Industries (GTBIF) , Agrify (AGFY) , and Mercer Park Brand Acquisition (MRCQF) . MRCQF is a SPAC that is merging with Glass House Group. Glass House is the largest player in the California market and has an attractive valuation as outlined in its Investor Presentation.
There are many SPACs that are trading near their $10 NAV, and some investors are starting to believe that the best plays will not be fully recognized until they are 'de-SPACed' and start trading as regular stocks. A good example is Genius Sports (GENI) which is breaking out to an all-time high today. If this was still trading as a regular SPAC, it likely would still be stuck close to the $10 NAV.
