TLRY Is Too Rich for Jefferies—What about Other Cannabis Players?



TLRY is too rich for Jefferies

On March 8, investment company Jefferies initiated coverage on yet another Canadian cannabis company, Tilray (TLRY). The company gave Tilray an “underperform” rating and said that its valuations were a concern compared to its peers’.

Since we have been keeping a close watch on the cannabis sector’s valuations and regularly publishing our observations so that our readers can stay up to date, we’ll look at the most recent valuation multiples of these cannabis industry players in March so you can compare them to Tilray’s. Read Tilray Stock Sinks after Jefferies Gives It ‘Underperform’ Rating to learn more.

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How are the stocks doing?

In this series, we’ll primarily look at two valuation multiples that are somewhat driven by the stock price movements of cannabis companies. In the chart above, except for Tilray, which was almost flat YTD (year-to-date), most cannabis stocks are trading higher than their levels at the beginning of this year.

For example, Cronos Group (CRON) has had a stellar performance so far this year with a YTD return of almost 109% as of March 8. OrganiGram (OGRMF) rose nearly 82%, followed by CannTrust (CTST), which rose ~69% in the same period.

Canopy Growth (WEED) has returned ~66%, Aurora Cannabis (ACB) has returned 52%, Aphria (APHA) has returned 62%, and HEXO (HEXO) has returned ~53% so far this year.

Given the stellar gains in these companies, it’s difficult to determine which stocks to invest in, and that’s why it’s important to look at valuations to determine whether these cannabis stocks are cheap, fairly valued, or expensive.

In this series, we’ll look at the valuation multiples in the cannabis sector (HMMJ) to help us decide.


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