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How Cannabis Stocks’ Valuations Stack Up amid Recent Weakness


Mar. 25 2019, Published 12:13 p.m. ET

Cannabis stocks

The cannabis sector has been facing some headwinds lately, and many of the sector stocks have fallen. When prices fall, it is often a good opportunity to buy stocks, as investors may be able to purchase a good company with strong fundamentals at a bargain.

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Positive territory YTD

In the above chart, we see that almost all of the companies experienced a sell-off recently. However, despite the sell-off, almost all of the stocks except Tilray (TLRY) were in the positive return territory YTD. Tilray’s stock continued to trend lower after it released its fourth-quarter earnings. We saw that analysts turned bearish on the stock in the current month compared to the prior month. Read Tilray: Analysts Are More Bearish in March.

In comparison, peers (HMMJ) including Canopy Growth (WEED), Aurora Cannabis (ACB), and HEXO (HEXO) have fared much better than Tilray so far this year.


It’s not enough to just look at a drop in the stock price to determine whether it is a good buy or not. We need a better measure to make that determination. Valuation multiples are a tool that can aid in making a determination as to whether a stock has fallen enough to be considered attractive.


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