28 Dec

Which Cannabis Stocks Look Cheap in December?

WRITTEN BY Adam Jones

A buying opportunity?

December has brought a severe drop in investors’ wealth, which has created a good buying opportunity. The same scenario has played out in the cannabis sector (HMMJ). The industry has been trading at an all-time low valuation, which is usually considered to be an attractive entry point for investors. In this series, we’ll discuss the cannabis stocks on our list that might look attractive at the current levels.

Which Cannabis Stocks Look Cheap in December?

Sector valuation

In the above chart, you can see that the cannabis industry is trading at an all-time low. The median of nine cannabis stocks, represented by the yellow line, is trading at a forward EV-to-sales multiple of 3.2x—the lowest level since January 2017. The valuation hadn’t ever fallen below 4x until December. The cannabis sector has been weighed down by the bearish sentiment.

Most cannabis stocks including Canopy Growth (WEED) (CGC), Tilray (TLRY), Aurora Cannabis (ACB), and Supreme Cannabis (SPRWF) suffered lately. The relatively higher volatility in the cannabis sector makes the valuation even more sensitive to wild swings in the market. Investors have been jittery about investing in cannabis stocks.

In this series, we’ll discuss each of the nine cannabis stocks that form the median in the above chart.

Latest articles

Ford plans to produce autonomous cars for ridesharing by 2021. GM acquired Cruise, a self-driving startup, to kickstart its autonomous driving plans.

PayPal stock (PYPL) is trading down today. With earnings due after the market closes, you should buy PayPal stock on the current dip.

This year has been rough for cannabis companies, including Aurora Cannabis (ACB), whose stock is already down 27.82% year-to-date.

The road for Netflix is getting rockier by the day. As it prepares for the imminent streaming wars, it's been caught off guard by a new development.

A Senate bill introduced this week could force Facebook (FB) to support the growth of rivals such as Snapchat. Let's take a closer look.

Over the past five trading sessions, Microsoft stock has closed in the red—making it very attractive for investors before today's earnings announcement.