We may never see cannabis stock prices trade this low ever again…
Cannabis stocks have started to separate themselves from broader markets.
In the face of relentless selling for traditional stocks over the last couple of weeks, cannabis stock prices have rallied.
Just look at our proprietary NICI 50 index compared to the S&P 500.
Since March 12, the S&P 500 is down 8%, while the NICI 50, which tracks the 50 largest cannabis stocks, is up 11%.
And from last Wednesday, these top-50 cannabis stocks by market capitalization are up 30% in the face of a 2% decline in the leading large- cap market indicator.
While still too early to call a bottom, this tells me market participants are beginning to see the extreme value reflected in pot stock prices.
And given the defensive nature of cannabis sales, these discounted values look even more appealing.
Now, this is just a taste of how massively I expect cannabis stocks to outperform over the coming years. The big money will roll in with buying from a few savvy participants, like hedge funds, whose mandates allow them to buy cannabis stocks.
Then, more traditional institutions will get into the mix.
And when they do, they will be looking for these three fundamental keys…
The Next Big Buyers of Cannabis Stocks
Hedge funds, family offices, and institutional investors will be looking for the cannabis companies that:
- Invested capital prudently.
- Have positive cash flows and profitability on the horizon.
- Have the cash and credit to scoop up weaker competitors in what will soon be a flurry of M&A activity.
We’re quickly approaching the turn and, these companies, along with several more, will outpace other cannabis stocks and the broader stock market over the coming year by a wide margin.
From what we’ve been hearing from readers, you clearly want to know what cannabis companies to buy and when.
For members of NICI Membership, you just received a trade alert on Wednesday morning, with several more to follow. For members of Cannabis IPO Insider, we’re starting our positions in several cannabis “blank check” companies.
And for members of the Cannabis Venture Syndicate, your private deal pipeline is bursting, with two new deals in one week.
I also want to take this time to let you know about a special Live Q&A session on Friday hosted by my friend and colleague, Neil Patel. I’ll be answering questions about legalization and much more.
Space is only open for 1,000 people, so I wanted to make sure you had a chance to register before Friday.
Don Yocham, CFA
Executive Director, National Institute for Cannabis Investors
11 responses to “Time to Act on the Cannabis Turn”
March 25 2020