After the release of our top stock picks through mid-year 2024 back in June, it’s only right that we paint a well-rounded picture and share our worst-performing stocks of the year so far, while offering some insight into why they might still deserve a place in your portfolio.
Five worst-performing stocks in 2024
- Decibel Cannabis: -57.69 per cent return.
- AnalytixInsight: -61.11 per cent return.
- Draganfly: -64.3 per cent return.
- Goldflare Exploration: -66.67 per cent return.
- Global Compliance Applications: -83.33 per cent return.
- Returns are year to date as of August 1, 2024.
Decibel Cannabis: -57.69 per cent return
Our first worst-performing stock worth a second look is Decibel Cannabis, featured in July, a consumer products company that has differentiated itself from the majority of its peers by posting steady growth since Canadian legalization in 2018.
Its flagship brands – General Admission, Qwest and Vox – collectively occupy the runner-up spot after Tilray in terms of Canadian market share and are being actively expanded into new countries, such as Israel, Australia and the United Kingdom, with eyes on improving on Decibel’s already impressive financial performance. Here are some highlights:
- Six consecutive quarters of positive adjusted net income as of 2023.
- 13 consecutive quarters of positive EBITDA as of 2023.
- 18.58x revenue growth from C$6.24 million in 2019 to C$115.96 million in 2023.
A series of operational optimizations announced in Q2 2024 across processes, portfolio, labour and new markets are expected to strengthen Decibel’s balance sheet and increase market share.
When you look at the company’s profitability against its peers (slide 13), and the growth it has been able to achieve since inception, it is no stretch to call Decibel stock (TSXV:DB) severely undervalued at a 57.69 per cent loss year to date.
AnalytixInsight: -61.11 per cent return
AnalytixInsight, featured in February, is a data analytics and enterprise software developer offering artificial intelligence (AI)-enabled platforms for the financial services industry. Here’s a quick breakdown:
- The company’s Capital Cube platform uses AI to analyze more than 50,000 stocks and ETFs.
- Its 49-per-cent-owned MarketWall brand develops trading, analysis, news and education solutions for financial institutions in Italy.
- Its Euclides Technologies division creates software to maximize efficiency, increase revenue, reduce costs and improve customer satisfaction in the energy, utilities, telecom, and oil and gas industries.
Backed by partnerships with the likes of Samsung, Refinitiv and Morningstar, the company’s technology suite is aligned with ongoing fervor in the AI sector, and the never-ending struggle among active investors to gain an edge in the market, and is in a prime position to fill the unmet need of financial education in the age of YOLO investing and commission-free stock trading.
Weighed down by a spat among management, as detailed in two news releases on April 17, shares of AnalytixInsight (TSXV:ALY) have given back 61.11 per cent year-to-date, granting you a price at peak pessimism for exposure to the company’s value-added technology.
Draganfly: -64.3 per cent return
Draganfly, featured in May, has been creating drones and associated software and AI systems for almost a quarter century.
The company enjoys a diverse customer base spread across the public safety, agriculture, industrial inspection, security, mapping and surveying industries, which has allowed it to build consistently gross profitable operations in support of future growth. Revenue has grown by 4.74 times from C$1.38 million in 2019 to C$6.55 million in 2023, and is expected to continue climbing, driven by:
- A 36.9 per cent compound annual growth rate in the U.S. drone market through this decade (slide 5).
- A stacked partner roster (slide 6).
- Controlled risk thanks to a diversified skill set (slide 12).
- A long history of patented innovations to monetize (slide 19).
Add to these propellants a multi-year pipeline, continued contract wins, and nine consecutive quarters of double-digit growth, and we begin to understand the kind of value-accretive path the company is on.
With Draganfly stock (CSE:DPRO) harboring a 64.3 per cent loss year to date, there’s strong reasoning to believe in further gross profitable growth and its potential to cause a share-price re-rating.
Goldflare Exploration: -66.67 per cent return
Goldflare Exploration, featured in April, is a mineral explorer established in 2003 developing a diversified property portfolio in Quebec. Management selected each property based on favourable geological setting and proximity to infrastructure, and it shows.
Its four main properties reside in a broad corridor with potentially significant gold mineralization. They include:
- Aiguebelle-Goldfields (1.3 g/t gold over 22.8 metres).
- Syenite Condor (1 g/t gold over 7 metres).
- Prospects Ranger and Destorbelle.
- The company’s Duplessis-Agar property further north (6.7 g/t gold over 6 meters) also exhibits high gold potential.
Goldflare’s portfolio offers a wealth of targets developed over multiple years to pursue resource delineation. The company’s pursuits are backed by numerous catalysts that are hallmarks for long-term conviction:
- A management team with more than 175 years of collective mining experience, a track record of growing project value through exploration, and robust shareholder alignment, with president and chief executive officer Michel Desjardins owning 4.55 per cent of the company, according to data from Simply Wall Street.
- A strong target commodity, with gold trading at an all-time-high of US$2,481 per ounce as of Thursday.
- A history of increasingly successful capital raises (slide 9) dating back to 2021.
Sitting at a 66.67 per cent loss year-to-date, shares of Goldflare Exploration (TSXV:GOFL) are at odds with the company’s multiple vectors for value creation.
Global Compliance Applications: -83.33 per cent return
Our final worst-performing stock, Global Compliance Applications, featured in March, designs and develops blockchain and machine-learning technologies to improve real-world business outcomes.
The company’s flagship offering, Efixii, is an Ethereum Layer-2 blockchain on par with other Layer-2s, including the well-known Polygon. Ethereum is a rather lumbering Layer-1 blockchain that can only process about 12-15 transactions per second on average, but is prized by users and developers for its highly functional application ecosystem, where you can make payments, lend or get a loan, play games (many of which are play-to-earn), invest in alternative assets such as art and collectibles, or become part of social media communities, among many other value propositions.
Businesses and investors in Ethereum need Layer-2s such as Efixii to connect producers, distributors, manufacturers and retailers, and help to ensure that sales and customer experiences are being maximized on the blockchain, because the business Ethereum does has far outgrown crypto’s reputation as a refuge for criminals and libertarians.
As of Thursday, the Ethereum token, ETH, commands a market capitalization of approximately C$515 billion, according to CoinMarketCap, and has taken in an average of US$6.7 million in daily fees from network users over the past week, according to CryptoFees. Efixii’s particular use-cases towards capitalizing on this addressable market include:
- Paying customers with crypto tokens to attest to a product’s value.
- Verifying supply chain authenticity, including cannabis and agriculture.
- Coupon/discount distribution.
- AI-based analytics to make better data-driven decisions.
These use-cases have allowed the company to book a steady stream of clients and post record download growth over the past year, as Ethereum rewarded investors with about a 72 per cent return over the period.
Shares of Global Compliance Applications (CSE:APP), for their part, have given back 83.33 year to date, creating an enticing dislocation between market sentiment and operational trajectory.
Join the discussion: Find out what everybody’s saying about these worst-performing stocks on the Global Compliance Applications Corp., Goldflare Exploration Inc., AnalytixInsight Inc., Draganfly Inc. and Decibel Cannabis Company Inc. Bullboards, and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Global Compliance Applications Corp., Goldflare Exploration Inc., AnalytixInsight Inc., Draganfly Inc. and Decibel Cannabis Company Inc., please see full disclaimer here.
(Top photo: Adobe Stock)