This Marijuana Metric Is Your “True Value” Indicator
Cannabis stocks are added to the world’s exchanges each day. The industry continues to grab the attention of global hedge funds, food brands and more.
But its rapid growth has created challenges for traders.
Many still rely on pure speculation. Cannabis traders are often at the mercy of spurious market predictions.
There’s one missing factor. And it could stop you from trading winners in the cannabis space.
Matt Badiali puts it more bluntly:
There’s an enormous amount of misinformation around marijuana stocks. Many forecasts are based on hot air and speculation. Many investors trade their cash for someone else’s stories. That’s why any metric puts our readers into a small subgroup of informed speculators.
The cannabis sector lacks a metric of value — a reliable measure of utility and price.
Analysts use these metrics to determine the true value of a stock.
It’s a way to stay ahead of all the market noise around a particular stock. And it can guide you to the most profitable trades.
Other industries use classic stock valuation metrics. You’ve probably heard of the price-to-earnings ratio, for example. Gold traders use a price-to-gold-production ratio to predict the movement of gold prices.
But none of these address the challenges of the cannabis sphere.
That’s why our analyst Anthony Planas produced his own metric.
And he just shared it with you. It’s called the enterprise-value-to-production ratio.
This metric compares a company’s enterprise value (EV) against the value of its current products to consumers.
Anthony used his metric to show the key differences between two major cannabis brands. You can find out more about the pot stocks below in his most recent Winning Investor Daily article:
Cronos Group Inc. (Nasdaq: CRON) holds one of the richest premiums in the industry. That’s thanks to its $1.8 billion deal with Altria Group Inc. (NYSE: MO). Production volume lags behind other players in the space. But many are hopeful this partnership will grow the company’s market share. Aphria Inc. (NYSE: APHA) trades at a discount to its peers. Production volumes look strong. Still, investors question management’s ability to deliver steady growth.
These are just two players in the cannabis boom.
Matt and Anthony have used this metric. And they’ve applied their exclusive 3Px strategy to several cannabis companies.
They’ve already recommended three small-cap marijuana stocks to readers of Front Line Profits.
We know it’s hard to do all this research on your own. So why not let our pot stock guru Anthony do it for you?
You can learn more about Matt and Anthony’s cannabis picks here.
Our Experts’ Latest YouTube Videos!
Anthony released another episode of Marijuana Markets: A POTCast. He covers Canopy Growth’s entrance into the skin care space. He also looks at the future of other cannabis-infused products. You can learn more by clicking the image below.
Chad Shoop shared his thoughts on an exciting tech trend.
Ride-sharing apps such as Uber and Lyft have poured a lot of capital into self-driving cars over the past year.
But these initial public offerings still pose risky bets for most investors. That’s why he recommends playing the self-driving car boom they’re stoking by trading one semiconductor exchange-traded fund. Just click the image below to learn more.
We’d love to hear from you! What do you think of Anthony’s marijuana metric?
Just write to us at firstname.lastname@example.org to be part of the conversation.
Our experts always keep a close eye on the markets. They want to make sure they can offer the best trading advice.
Read on to see the topics they’re following this week.
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The Winning Investor Daily Team
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