The Stock Analyst

An investment analyst is a Financial Professional with expertise in evaluating financial and investment information, typically for the purpose of making buy, sell and hold recommendations for securities.

Professionals in Canada

A Professional in Canada is someone that has demonstrated mastery of a body of knowledge and has demonstrated expertise in specialized fields. Someone who is educated and committed to lifelong learning of their area of expertise. Some recognized professions in Canada are Chartered Professional Accountants, Engineers, and Doctors. Most importantly, Professionals in Canada are given the exclusive right to their area of practice and are self governed. As a member of a professional society, one may be subject to an investigation and possible disciplinary actions for violations.

The Act

The Government of Canada allows Professional societies to be self regulated. These professional societies are bound by the legal authority of an Act for each province.



These acts provide procedures for:

Establishing bylaws

Regulation of acceptance into a Profession

Investigating Complaints against members

Codes of Ethics.

Code of Ethics



The Code of Ethics is a unique, binding Code in which all members and firms, regardless of their jurisdiction of residence or operation, shall comply with.



For CPA’s in Ontario, they are governed by the CPA Code of Professional Conduct.

The CPA Code of Professional Conduct sets out general and specific duties for:

characteristics of a profession

responsibility for compliance with the CPA Code

fundamental principles governing conduct

personal character and ethical conduct

ethical conflict resolution

principles governing the responsibilities of firms

A Professional has an obligation to hold paramount the public interest above his or her own and uphold the highest ethical standards.

Rule 200.



Rule 205.

Using the wrong word at the wrong time could land the Professional member in serious trouble. Complaints against Professional members are taken seriously and each complaint is investigated. A member can be subject to disciplinary action if found guilty of breach of the Code. This process is defined in the Act, and is crucial for Professional societies to exist and be self governed.

The public trusts that the members are acting in good faith and duty of care.

Canaccord

Canaccord Genuity Group Inc. is the largest independent investment dealer in Canada. They are an investment banking and financial services company that specializes in wealth management and brokerage in capital markets.

Trust Issues?

Helios and Matheson Analytics is the parent company of Movie Pass. Movie Pass was a failing business that was losing $23 million per month, ramping up to $40 million per month in May 2018. Helios employed Canaccord and another firm to raise money to sell shares on multiple occasions.



“…While these banks made millions in commissions from Helios, research analysts at the two firms kept “buy” ratings on the stock as it slid, advising clients that Helios was a good deal. Neither ever put a “sell” rating on the stock, even as the share price has cratered 99.99%. Both recently suspended coverage….”



Reverse split after reverse split. Trading at fractions of a penny. If you invested $100,000 in Helios stock in October when Maxim’s Kinstlinger initiated coverage with a “buy,” your shares would now be worth about $1.85 a 99.998% decline in value.





https://www.businessinsider.com/wall-street-banks-made-millions-in-fees-selling-collapsing-moviepass-shares-2018-8



Do these large investment firms really have the public’s best interest in mind? Do these analysts ratings even mean anything?

Trouble in the past

Following an investigation, the SEC alleged that Canaccord initiated research coverage on April 18, 2012 for a certain stock. A series of emails were uncovered between company executives and the broker-dealer that discussed the potential role of Canaccord in the upcoming underwriting. Canaccord gave the company a “buy” rating and set a 12-month target price of $22, more than 60 per cent above the issuer’s stock price at the time.

“…On April 19, 2012, after Canaccord had initiated coverage, the Issuer changed its plans and decided to conduct an accelerated offering later in April,” the SEC document says, adding that the company then “asked Canaccord to act as the lead underwriter for this revised deal…”

According to the SEC, on April 24, 2012, Canaccord acted as the managing underwriter for the U.S. portion of a $40 million stock offering conducted in the United States and Israel.



This is a direct breach of Conflict of Interest Rule 210 in the Code.

https://business.financialpost.com/investing/canaccord-genuity-ordered-to-pay-550000-by-sec-over-underwriting-deal



A Similar Story



Sunniva has retained Canaccord who has commenced a formal process to review all strategic alternatives with the intention to spin out the Company’s Canadian assets into a separate Canadian entity and apply to list its shares on the Toronto Stock Exchange and the NASDAQ Stock Market

Oct 12 2018 Sunniva announced a bought deal public offering totaling $23,029,900. The Offering was conducted by a syndicate of underwriters co-led by Beacon Securities Limited and Canaccord Genuity Corp. and including Haywood Securities Inc.

Canaccord Net Selling $2.9 Million June 2018 to Oct 2018 (Sunniva)

Canaccord Net Selling $5.5 Million Oct 2018 to Sept 2019 (Sunniva)

Canaccord gives “buy ratings” and “price targets” yet they are a large seller of the stock. It just doesn’t make sense.

Cowen & Company

Vivien Azer is a Managing Director and senior research analyst specializing in beverages, tobacco, and cannabis sectors. They recently released a report with ratings and price targets for the major USA MSO’s

Medmen was given the worst rating and a price target while Curaleaf and Greenthumb were given the highest price targets.

What is her motive?



She claims that the money is in wholesale of cannabis not retail. If everyone is wholesaling then who will handle the retail? How do you distribute a product.



Is she aware of the Pharmacann acquisition bringing in some rather large grow operations in the eastern states (the states that these MSO’s are doing the majority of the wholesale revenues in)?

Vivian has covered Tilray in the past giving it a $150 price target after it ran up in 60 days from $20 to $300. She later cut the price target down to $60 on September 4 2019, and the stock is currently trading around $31.

Not even a week later on September 10th 2019 “…In an 8-K filing released after the close, Tilray (NASDAQ: TLRY) announced that Cowen and Company has been selected to sell up to $400 million in stock once an S-3 registration statement is effective. Any sales will be an “at-the-market offering…”





Something here doesn’t seem right. First the $150 price target after a fresh IPO and 1500% returns on the stock? If this is the true value of the stock why did it IPO so low? Then the she cuts the target $60. This is still a 100% upside from current share price.



Less then one week later a major announcement that Cowen is going to sell $400 million in Tilray stock. So the company that has a price target of double the current price is tasked with selling shares of that company to investors? Similar to the Canaccord situation mentioned above, isn’t it?

Analysing the analysts

You need to ask yourself Are these “Professionals” really doing their job?



Are they keeping the public’s interests above their own? Should we believe them and trust that they have the best intentions when releasing a report with their name on it?



The evidence seems to speak for itself.



If a Professional Engineer stamps a construction drawing and the building he or she designs collapses the Engineer is liable and held accountable.



Are these “Professional” Accountants and Analysts truly being held accountable?



It sure seems like they are walking a fine line.



– /u/trancify









