Since legalization, cannabis stocks have sunk to lower prices. not only, bubble It burst, but there really wasn’t a place for investors to see the future. That is, until the recent elections and the inauguration of the new President of the United States, Joe Biden.
Cannabis stocks have basically been totally repulsed after taking office as the new democratic leader in the free world. Similarly, in the November 2020 elections, four more states legalized the recreational use of marijuana. But does it make cannabis a good buy today?
There are certainly cannabis stocks to consider, but as it seemed like 2018, it’s not a drastic choice. In fact, I was far from these three stocks now and in the future. Even if the United States legalizes marijuana nationwide, these stocks are still prepared for failure.
Aurora Cannabis Co., Ltd. (TSX: ACB)(NYSE: ACB) It was once thought to be the biggest idea that happens to cannabis strains. The company boasted not only the maximum production of pots, but also the lowest price per gram. But while other cannabis companies have partnered, Aurora refused. Rather, it diluted the stock over and over again, creating a situation where it was simply irreversible.
The company can still boast low costs, but this is possible Duplicate By others in the future. It also focuses primarily on medicated marijuana. Marijuana quickly becomes a backseat as cannabis continues to grow. Equities are currently up only 133% in the last five years, with four digits and nothing compared to other companies. It has also risen only 92.5% since legalization. Revenues continue to decline year by year, and the revenue value (EV / sales) relative to sales remains high at 11.2 times over the past 12 months (LTM). Investors, sorry, this stock is up, but it’s certainly not cheap.
Cronos Group Co., Ltd. (TSX: CRON)(NASDAQ: CRON) It has an advantage over Aurora in that it is in the United States and has a partnership with Altria.. Unfortunately, the company still has a lot of competition. It has an advantage in the cannabidiol (CBD) market, but if cannabis is legalized across the United States, there is nothing in that market. The medicinal market will also be left behind once it has become established for recreational purposes.
If you’re looking at EV / sales right now, Kronos is an incredibly high price among cannabis stocks at a whopping 59.2x in LTM! Revenues have increased year-over-year due to increased entertainment use, but still well below revenues a few quarters ago. Last year’s share price could rise 36%, but it’s still 57% lower than the March 2019 high. Again, analysts don’t believe the stock price has what it takes to compete with cannabis competitors.
There are certainly some stellar cannabis strains that you can choose to take advantage of this momentum. But these strains are not one of them. Each company has too many ways to get back from it, and there are other more powerful options for long-term investors, so it’s best to steer clearly.
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Two cannabis stocks not yet worth buying
https://www.fool.ca/2021/01/31/2-cannabis-stocks-that-still-arent-worth-buying/ Two cannabis stocks not yet worth buying