and not worth looking at right now. Many have stock prices of less than $1 a share and market caps below $500 million. As we tiptoe into this new industry, we should do it with companies that pass a few tests... they need good management, access to capital, and strategies that make sense. Companies that can meet these three requirements will often find success – measured by sales, the most important financial measure a growing company has. As we tiptoe into this new industry, we should do it with companies that pass a few tests... For nearly all the companies on our list, sales are rapidly rising. Tens of millions in sales are quickly growing into hundreds of millions. Consider the preceding chart. It shows total revenue of our target list in 2018 and forecast for 2019 and 2020. As you can see in the chart, we are taking a much more analytical approach to the cannabis industry. There are many avenues for which cannabis will likely be used, processed, and distributed. At minimum, it’s likely that cannabis will be broadly available for adult use – just like alcohol and tobacco – in many parts of the U.S. and around the world. However, a few words of caution before you look closer at this industry... Valuation for cannabis stocks today is often irrational. Buying a portfolio of these stocks requires a belief that revenue growth will actually occur and that they will
Thomas Carroll is one of the most respected and longest-serving health care analysts on Wall Street. Prior to joining Stansberry Research, Tom worked at Stifel/Legg Mason in Baltimore for nearly two decades as managing director and senior analyst of health care. His research was used by institutional investors, news wires, and health-care- specific publications, as well as CNBC, Bloomberg, CNN, and Fox Business. He has also consistently ranked in industry stock-picking awards, including top five finishes for stock picking from Starmine, the Wall Street Journal , and Forbes . And he was ranked by Fortune magazine as the No. 1 U.S. health care analyst. grow into their valuations. We are looking for companies that are “less expensive” than the broader group, but also have significant growth potential. You must be prepared for significant volatility. This volatility will occur both on the upside and the downside. Because of this, investors must keep an eye on their positions. As stocks rise within this emerging disruptive industry, it may make sense to take profits in some names. Conversely, as market fear pushes stocks lower, it will take guts to increase positions of the best companies. If you’re interested in learning more about this industry, I’m releasing many of my findings during an educational video presentation on Wednesday, March 27. You can RSVP for free by clicking here.
American Consequences 35
Made with FlippingBook - professional solution for displaying marketing and sales documents online