Tag: Motley Fool

The Copper Mountain Mining Corporation (ASX: C6C) share price is reaching new highs today. This comes after the company announced a record quarterly production from its mines, and provided guidance for the 2021 calendar year.

At the time of writing, the Copper Mountain share price is travelling 8.2% higher to $2.37.

How did Copper Mountain perform in 2020?

The Copper Mountain share price is on the run as investors are fighting to get a hold of its shares.

According to the release, Copper Mountain advised that it has achieved record quarterly production for copper, gold and silver. The robust result to finish off the calendar year saw the company exceed its previous production targets.

At the end of the fourth quarter, Copper Mountain produced a record 23.1 million pounds of copper. This reflected a 22% increase on the third quarter period and was 23% up on the same time last year. Management said that the strong performance was due to mining higher copper grades.

In addition, Copper Mountain yielded record gold and silver production, which led to 8,959 ounces and 144,934 ounces, respectively.

In 2020 as a whole, Copper Mountain reported 77.6 million pounds of copper produced. The company had originally projected it would mine and develop between 70 million to 75 million pounds of copper across the period. Total yearly production for precious metals came in at 29,227 ounces of gold and 392,494 ounces of silver.

FY21 production and guidance update

Looking ahead, Copper Mountain estimates 2021 production for copper to be around 85 million to 95 million pounds. The robust guidance comes as the company continues to mine higher grades of the base metal. Furthermore, its mill expansion project is scheduled to be completed in the third quarter. This will allow the company to recover up to 45,000 tonnes of copper per day.

Gold production for the year is projected to be between 25,000 ounces to 30,000 ounces, with its cheaper cousin silver forecast to come in at between 500,000 ounces and 550,000 ounces.

All-in-costs is forecasted to remain low throughout 2021, with total costs coming in around US$1.80 to US$2 per pound. This assumes an exchange rate of CAD$1.33 to US$1.

Words from management

Copper Mountain president and CEO Mr Gil Clausen commented on the company’s performance:

Our operating team executed on our operating plan beating our production guidance for this year. We finished the year strong with record production in the fourth quarter as a result of higher grades, which we expect to continue in 2021.

We are continuing to build up a healthy cash position while investing in our low risk, high return growth projects at the Copper Mountain Mine.

Copper Mountain share price summary

The Copper Mountain share price is up almost 200% over the last 12 months, reflecting positive investor sentiment.

The company’s shares reached a low of 33.5 cents in March, however they have since shot up to a record high of $2.37 today.

At the current price, Copper Mountain stands a market capitalisation of $459.8 million.

More reading

• What this broker thinks of the Altium (ASX:ALU) share price
• Elon Musk is now world’s wealthiest person
• Here’s why the Afterpay (ASX:APT) share price is surging higher
• Leading broker names the ASX bank shares to buy in 2021
• Why the AusCann (ASX:AC8) share price jumped 14% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Altium Ltd (ASX: ALU) share price struggled to make headway in 2020, closing 5.4% lower for the year. On 7 January 2021, however, financial advisory firm Bell Potter upgraded Altium shares from sell to hold. But at the same time, Bell Potter also lowered its Altium share price target from $33.75 to $32.50.

Here’s why the broker thinks 2021 could be another flat year for Altium shares. 

Altium overview 

Altium develops and sells software and hardware for the design and development of electronic products. The company provides the printed circuit board (PCB) market with three core products. These are Altium Designer, software for designing PCBs, Nexus, a collaborative cloud-enabled PCB design solution, and Octopart, an electronics parts search engine.

Altium is one of the largest providers of PCB design software globally. According to Bell Potter’s data, sourced from PCB Market Trends, Altium has an estimated market share of 26%. 

Rating upgrade from sell to hold 

Bell Potter’s investment thesis for Altium is based on the company’s switch of its software from being based on-premise to being delivered via the cloud. It sees this switch as a risk that could negatively impact Altium’s financial results in the short to medium term, as has occurred for other software companies which made this switch such as Adobe Inc and Autodesk Inc. 

Bell Potter’s research report also highlights the key to Altium’s long-term success as being industry transformation. Altium is attempting to drive this transformation by creating market dominance in its key market of electronic design. This transformation, however, is not guaranteed and is likely to be met with resistance from incumbent operators in areas such as electronics manufacturing and parts supply chains. 

Key risks

A number of downside risks for Altium emerged in Bell Potter’s research report. These include foreign currency fluctuations in the USD/EUR exchange rate and increased competition. One of the key risks that both Altium and Bell Potter acknowledge is the health of the global economy. Altium targets the global PCB market and the future condition of the global economy will therefore impact the company and its growth. A risk for Altium is a further downturn in one or both of the economies in Europe and the United States, as these two regions combined represent approximately 80% of Altium’s sales. 

Altium share price target lowered 

While there were no changes in Altium’s earnings forecasts, Bell Potter decreased its Altium share price target by 4% from $33.75 to $32.50. Bell Potter’s reduction was driven by the recent fall in the share prices of most of Altium’s listed peers. Bell Potter described its Altium share price target as a modest premium to the current share price, hence upgrading its rating from sell to hold. 

At the time of writing, the Altium share price is trading at $31.88, up 0.44% for the day so far.

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Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Adobe Systems, Altium, and Autodesk. The Motley Fool Australia has recommended Adobe Systems and Autodesk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Tesla Inc (NASDAQ: TSLA) chief executive Elon Musk is now the richest person on the planet, after the company’s shares surged again overnight.

The electric car maker’s stocks shot up a stunning 7.94% Friday morning Australian time. This allowed the South African-born Musk to overtake Amazon.com Inc (NASDAQ: AMZN) founder Jeff Bezos into the top spot.

Tesla shares were on an absolute tear in 2020, appreciating 743% during 2020. 

Musk, whose wealth is largely tied to his ownership of Tesla shares, saw his personal worth skyrocket more than US$150 billion in the past year, according to Bloomberg.

Bezos became the world’s richest in 2017 after more than 20 years running Amazon. Since then he has undergone a divorce from his wife MacKenzie Scott, which deducted about a quarter of his Amazon ownership.

Scott herself instantly became one of the wealthiest people on earth, and currently sits at 23rd spot.

Early on Friday morning Australian time, Musk tweeted “How strange” in response to the news that he is now the earth’s richest person.

He then swiftly posted “Well, back to work…”

Well, back to work …

— Elon Musk (@elonmusk) January 7, 2021

https://platform.twitter.com/widgets.js

Is Tesla’s incredible rise too good to be true?

Tesla, by market capitalisation, is now worth as much as the 8 biggest petrol car makers on the globe.

Despite COVID-19, the company ascended to this confounding valuation on the back of investors’ enthusiasm that electric vehicles are the way of the future.

Then late in the year Tesla made it onto the S&P 500 Index (INDEXSP: .INX). This accelerated its growth even further as index funds were forced to buy up its stocks.

Legendary investor and GMO co-founder Jeremy Grantham this week used Tesla as an example as to why share markets are in a bubble about to pop, just like 1929 and 2000.

“As a Model 3 owner, my personal favorite Tesla tidbit is that its market cap, now over US$600 billion, amounts to over US$1.25 million per car sold each year versus US$9,000 per car for General Motors Company (NYSE: GM),” he said in a letter to investors.

“What has 1929 got to equal that?”

More reading

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• We’re in a massive bubble: This is when it’ll pop
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• 20% of Aussie investors would take high returns over personal ethics

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tony Yoo owns shares of Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Tesla and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Afterpay Ltd (ASX: APT) share price is back on form again on Friday and charging notably higher.

In morning trade the payments company’s shares are up 5% to $114.19.

Why is the Afterpay share price charging higher today?

Investors have been buying Afterpay’s shares on Friday in response to a particularly positive night of trade on Wall Street.

Overnight the technology-focused Nasdaq index stormed over 2.5% higher to close above the 13,000 points level for the first time ever.

Investors were buying shares after Congress confirmed the election of Joe Biden as president, traders looked beyond the unrest in Washington, and the Democrats took control of the Senate.

The latter is being seen as a major positive for the US and global economy, as it should make it possible for additional stimulus measures to be pushed through in the near future.

What about other tech shares?

It isn’t just Afterpay that is storming higher on Friday. A number of other tech shares are on course to end the week strongly.

The likes of Altium Limited (ASX: ALU) and Zip Co Ltd (ASX: Z1P) shares are both recording solid gains in morning trade and are helping to drive the S&P ASX All Technology Index (ASX: XTX) higher.

At the time of writing, the S&P ASX All Technology Index is up a decent 1.3%. This compares to a 0.1% gain by the benchmark S&P/ASX 200 Index (ASX: XJO).

Where next for the Afterpay share price?

The Afterpay share price may have tripled in value over the last 12 months, but some brokers believe it can still go higher.

Analysts at Bell Potter have a buy rating and $140.00 price target on its shares, whereas Credit Suisse has an outperform rating and $124.00 price target.

Bell Potter’s price target implies potential upside of over 22% for its shares over the next 12 months.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 rose 1.6%
• Why the Afterpay (ASX:APT) share price is tumbling today
• Bell Potter names the ASX shares to buy in 2021
• ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.

On this occasion, I’m going to look at the banking and financial sector. Here are a few shares they rate highly:

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Bell Potter’s favourite major bank is ANZ due partly to its belief that there is greater upside for its dividends compared to peers. It has a buy rating and $24.50 price target on its shares.

The broker explained: “FY20 performance may have been impacted by large notable items and COVID-19 provisions but underlying performance was sound and included a better outcome in 2H20.”

“With a normalised target payout ratio lower than those of its peers, we believe there is greater upside for ANZ to increase dividends and especially when APRA relaxes its current payout restriction. Credit provisions are higher than the sector average and support the potential for write-backs.”

Auswide Bank Ltd (ASX: ABA)

Another (smaller) bank that the broker is positive on is Auswide Bank. It currently has a buy rating and $6.70 price target on its shares. Bell Potter has been pleased with its performance in FY 2021 and notes that it is outperforming its larger peers.

It commented: “ABA provided an upbeat four month trading update with earnings momentum having further strengthened since the end of 1Q21 and performance indicators that are sector-beating.”

“This represents a dream start to FY21 that should comfortably ensure an unbroken track record for ABA in generating profitable growth. All FY21 targets are set to be exceeded.”

Macquarie Group Ltd (ASX: MQG)

Finally, this investment bank is the broker’s favourite in the sector. Bell Potter has a buy rating and $150.00 price target on its shares. It notes that its business model has positioned it for growth in the future.

Bell Potter explained: “Looking past the COVID-19 noise, this longer term “Cash and Growth” story remains intact. The way MQG’s business model is split across annuity-style and markets-facing activities – respectively 70% and 30% of net profit contribution – strengthens resilience in withstanding market volatility and improves flexibility in being able to capitalise on higher risk-adjusted return opportunities when operating conditions normalise.”

Another positive in Bell Potter’s eyes is its strong capital adequacy. It notes that this is being underpinned by its strong organic capital generation and efficient asset utilisation.

More reading

• Bell Potter names the ASX shares to buy in 2021
• Why ANZ, Westpac, and the rest of the big four are storming higher today
• These are the latest 2021 ASX “buy” ideas from top brokers
• ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble
• 2 blue chip ASX dividend shares to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AusCann Group Holdings Ltd (ASX: AC8) share price is on the move on Friday after the release of an announcement.

In morning trade the medicinal cannabis company’s shares are up 14% to 24 cents.

What did AusCann announce?

This morning AusCann announced that it will be changing its Chief Executive Officer upon the completion of the acquisition of CannPal Animal Therapeutics Limited (ASX: CP1).

According to the release, the Founder and Managing Director of CannPal, Layton Mills, will lead the combined company. This decision was reached following a combined meeting of the Boards of CannPal and AusCann and will take effect from the completion of the transaction.

AusCann’s current CEO, Nick Woolf, has decided to tender his resignation, but has agreed to stay with AusCann as Interim CEO until the transaction completes. After which, he will stay on in an advisory capacity to assist with an orderly transition until 30 June 2021.

Mr Woolf was only appointed CEO of AusCann in August of last year.

AusCann’s Chairman, Max Johnston, commented: “Since Nick joined us in August 2020 he has been instrumental in moving forward the development of a robust pipeline with advancement of studies of the existing hard-shell capsules based on the Neuvis platform, initiating formulation work of a novel CBD only variant and engaging an experienced US-based team to develop additional product candidates addressing unmet health needs.”

“In addition to this, Nick has also taken significant steps toward making AusCann more cost effective and efficient in utilisation of its assets and operations. We thank him for all his efforts in taking AusCann forward during his tenure whilst also progressing the proposed acquisition of CannPal. I am pleased that Nick has agreed to provide continuity during the prospective transition and wish him well in his future endeavours,” he added.

The outgoing CEO, Mr Woolf, commented: “The combination of AusCann and CannPal has clear synergies including multiple revenue streams and the leverage of data in the animal health space for the development of human medicines and vice versa. Both companies have established a strong network of alliances that should accelerate success.”

“I believe that the medicinal cannabis industry in Australia has significant growth potential and the combined company will be well placed to benefit from this,” he concluded.

More reading

• 5 top ASX cannabis shares in 2020
• ASX pot stocks have been skyrocketing in December

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It’s not so hard to find COVID-19 winners. While many businesses have been on the unfortunate side of the pandemic, others were poised to skyrocket as people stayed home.

But while e-commerce came out on top, many essentials stores stayed open and served their customers. So while Amazon.com, Inc (NASDAQ: AMZN) proved its mettle again in 2020, Costco Wholesale Corporation (NASDAQ: COST) made a formidable showing, even in e-commerce. Let’s take a look at which one is the better buy.

Prepared for a pandemic

Amazon is the most trusted name in e-commerce. According to Statista, it accounts for half of all United States e-commerce, standing out in a crowded field. Despite its top spot, it keeps growing, with sales increasing 37% in the third quarter ended 30 September, and earnings tripling.

Costco is one of the largest storefront retailers in the US, with $163 billion in 2020 annual sales and increasing. In the 2021 first quarter ended 22 November, comps increased 15% and digital sales rose 86%. Those stellar results happened after most lockdowns were lifted, demonstrating the company’s ability to perform well in all types of environments. 

It regularly posts around a 90% member retention rate and millions of new members annually. Membership fees alone contributed almost $1 billion in the first quarter.

Both companies were well-positioned to increase sales over the past few months as customers stayed home and ordered or went to the few essentials retailers that were allowed to remain open. But that doesn’t mean growth is over when the pandemic is.

Meeting demand in new areas

While Costco has successfully embraced digital shopping, Amazon has had less success with storefronts. But it’s improved its store model and now has 26 Amazon Go stores that offer meals and snacks, and two Go grocery stores where customers can simply take what they want and walk out without waiting on any lines. It also now has seven Amazon Fresh grocery stores, which combine a physical and digital experience, including free same-day delivery for Prime members and Dash cart, another way to skip the checkout line.

Some of Costco’s operating segments are still closed or not running at full speed, such as travel, and as they reopen they will add to Costco’s already impressive sales. It’s managed to make all of that money with only 803 warehouses globally, including 558 in the US. It opened eight new locations in the US in the first quarter and expanded its global presence, where it now has warehouses in 11 international countries.

Amazon has moved beyond retail e-commerce into Amazon Web Services, which accounted for 12% of total revenue in the third quarter but more than half of total earnings. It continues to rack up customers for the high-margin business, adding Star Alliance and more services for Twitter in December.

It’s hustling into many other new areas as well. It already has award-winning content in Amazon Prime Video, and has its own music streaming service. It launched Amazon Pharmacy in November to disrupt the prescription drug market, and The Wall Street Journal reported that it is in talks to acquire podcast maker Wondery.

In Costco’s favor, it also pays a dividend, which Amazon does not. The yield is a below-average 0.72%, but the company also pays a periodic special dividend that makes it much more valuable – including $10 in November 2020.

Where should investors place their bets?

Amazon and Costco are both excellent companies with opportunities for further growth, and I would recommend either one. But pitched against each other, I’d go with Amazon, because it has a more intriguing case for high growth. Amazon shares trade for almost 10 times Costco’s, and if that puts it out of your league, Costco is still a great choice.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Amazon creates a $2 billion loan fund for affordable housing
• Amazon expands its air delivery fleet after buying 11 new planes
• 3 mammoth IPOs of 2020
• If you thought 2020’s tech share rally was impressive, hold on for 2021!
• Amazon makes bank from marketplace seller ads

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and Costco Wholesale and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Accent Group Ltd (ASX: AX1) shares will be on watch this morning as the company provided a trading update after yesterday’s market close. At Thursday’s closing bell, the Accent share price finished the day 1.26% lower at $2.35. It will be interesting to see which way the shoe retailer’s shares move today after investors digest the company’s latest results.

How did Accent perform for H1 FY21?

The Accent share price will be in focus this morning following the company’s release of a strong performance update for the first half of FY21.

For the period ending 27 December, Accent reported favourable trading conditions particularly in the last two months.

The company revealed that total sales jumped 12.3% and like-for-like (LFL) sales grew 7.4% in November and December. Overall, LFL sales delivered a 2.7% lift over the first half period. When factoring out the closure of Auckland, Victoria, and Adelaide stores, LFL sales growth recorded a 12.3% increase.

In addition, digital sales for the group set a record, up 110% to $108.1 million compared to the prior period. This segment reflected 22.3% of the entire group’s sales.

As a result, Accent advised group earnings before interest, tax, depreciation and amortisation (EBITDA) will be between $95 million and $98 million. This reflects robust growth of around 40% to 45% on the prior comparable period.

In the release, Accent went on to mention that it continues to maintain disciplined cost controls to protect its balance sheet. The company also advised that rental reductions and government wage subsidies helped drive the first half’s positive results. 

Due to the continuing uncertainty surrounding COVID-19, however, the retailer did not provide guidance for its second-half year result.

Management commentary

Accent Group CEO Mr Daniel Agostinelli touched on the company’s effort, saying:

I am delighted with the way our team has executed through the all-important November cyber events and the lead up to Christmas. Our strong focus and capability in digital, combined with operational excellence in merchandise and store execution has delivered a strong, trading led result.

The Company’s store network and best in class digital fulfilment capability, allowed us to fulfill significant volumes of online Christmas customer orders placed up until 22 December in time for Christmas Day.

Accent share price snapshot

Since March, the Accent share price has rebounded from its COVID-19 lows of 55.5 cents. It’s also worth noting that Accent shares are currently trading just shy of their $2.41 all-time high reached on Wednesday this week.

Based on the current Accent share price, the company commands a market capitalisation of around $1.27 billion.

More reading

• 2 ASX dividend shares with attractive yields
• 2 quality ASX dividend shares to buy next week
• Smash term deposits with these ASX dividend shares
• Why did the Accent (ASX:AX1) share price defy the odds in 2020?
• Why Afterpay (ASX:APT) and these ASX shares just hit 52-week highs or better

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Looking to add a few growth shares to your portfolio this month? Then you might want to get better acquainted with the ones listed below.

The two shares listed below have been growing strongly and have been tipped to continue doing so in the future. Here’s what you need to know about them:

ResMed Inc. (ASX: RMD)

The first growth share to look at is ResMed. It is a medical device company with a focus on sleep treatment products and ventilators.

ResMed has been growing at a consistently strong rate over the last decade and looks well-placed to continue this positive form. This is due to its world-class, cloud-connected hardware and software solutions, and its huge addressable market.

In respect to the latter, management currently estimates that there are 936 million people with sleep apnoea globally, with the majority of these sufferers undiagnosed. In addition to this, the company notes that there are 380 million people who suffer from chronic obstructive pulmonary disease (COPD) and over 340 million people living with asthma. These are all people whose lives could be improved with ResMed’s products in the future.

One broker that is very positive on the company’s future is Credit Suisse. It has an outperform rating and $31.00 price target on its shares.

Zip Co Ltd (ASX: Z1P)

Another growth share to look at is Zip. It is a leading buy now pay later provider with operations across several key markets such as Australia, the United Kingdom, and the United States.

Thanks to the growing popularity of the payment method with consumers and merchants, the decline in credit card usage, and its international expansion, Zip has been growing its customer and sales numbers at a rapid rate.

For example, for the month of October, Zip delivered a 104% increase in transaction volume of $401.1 million from its 4.8 million customers. This annualises to $4.8 billion, which is a big lift on FY 2020’s numbers.

The company has been tipped to continue this strong growth in the future. This is thanks to positive industry tailwinds, the shift to online shopping, and new product launches. The latter includes Zip Business and its Tap & Zip product.

Analysts at Morgans are very positive on its outlook. They currently have an add rating and lofty $9.80 price target on its shares. 

More reading

• Why the Afterpay (ASX:APT) share price is tumbling today
• 3 quality SaaS ASX shares to buy
• ResMed (ASX:RMD) share price returned 20% in 1 year. Where to in 2021?
• ASX 200 down 0.5%: Energy shares jump, big four banks fall, Zip climbs higher
• Why Fortescue, Nick Scali, Santos, & Zip shares are charging higher

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The market may have surged higher on Thursday but that was nothing compared to the gain made by the Creso Pharma Ltd (ASX: CPH) share price.

The cannabis company’s shares rocketed a whopping 47% higher to 26 cents.

Why did the Creso Pharma share price rocket higher?

Investors were buying the company’s shares on Thursday after the Democrats won the Georgia Senate run-off, effectively handing control of the Senate to them.

This could be good news for Creso Pharma and other cannabis companies because of President elect Joe Biden’s policies.

During the election campaign, Biden’s team showed their support for cannabis decriminalisation, with Chuck Schumer stating that legalisation would be a major priority in a Democratic controlled Senate.

Given that the Senate is now controlled by the Democrats, there could soon be meaningful cannabis policy reforms. And this could come sooner than you might expect, given concerns that the Republicans could take back a seat next year at the mid terms.

Forbes commented: “Make no mistake, the window for reform is likely a short one. While the Republican party rank and file are in majority support of legalization, GOP leadership in Congress, and Mitch McConnell in particular, has been no supporter of legalization.”

“Historically, the party in control of the White House tends to lose seats during a mid-term election, particularly when they Control all branches of the federal government. Democrats must govern under the assumption that Republicans will take back at least one chamber of Congress in the 2022 midterm elections. If they retake the Senate and Mitch McConnell reassumes his role as Majority Leader, any hope of significant cannabis reform will likely go out the window.”

This bodes well for Creso Pharma and goes some way to explaining why its shares smoked the market yesterday.

Though, it is worth remembering that the company is just one of a growing number of companies looking to take advantage of potential changes to legislation.

More reading

• Here are 3 ASX small cap shares with exciting product launches in 2021
• Why the Creso Pharma (ASX:CPH) share price is jumping 9% higher
• Creso Pharma (ASX:CPH) share price lower despite supply agreement news
• Creso Pharma and Nuix were among the most traded shares on the ASX last week
• ASX pot stocks have been skyrocketing in December

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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