Cannabis stocks have been on a roll of late, some rising to new 52-week highs. Recreational cannabis is set to be legalized in several more states. Furthermore, there is the potential for legalization on the federal level during the upcoming Biden-Harris administration.
It is often said that a rising tide lifts all boats. However, this metaphor is not proving exactly true for the cannabis sector in 2020-2021…
If you look at the industry as a whole, you will find plenty of publicly traded companies in this space that are unworthy of your investing dollars.
Below, we shed light on three cannabis stocks to avoid as the year winds down: Tilray (TLRY – Get Rating), Hexo (HEXO – Get Rating), and Sundial Growers (SNDL – Get Rating).
Tilray (TLRY – Get Rating)
TLRY is a pharmaceutical business that makes medicine, oil, drops, and drugs that are cannabis based. TLRY dropped all the way from $19 to $2 amidst the coronavirus selloff. Though the stock moved back up above $10, it has since dipped right back down below $8.
The POWR Ratings make it clear TLRY is unworthy of your money. The stock has an “F” grade in the Buy & Hold Grade component and “C” grades in the Peer Grade and Trade Grade components. Furthermore, TLRY is ranked outside of the top 100 in the Medical – Pharmaceutical industry. All in all, 240 stocks are in this industry.
Of the eight analysts who have cover TLRY, five have a “Hold” rating, two advise selling, and only rates it a “Buy.” Part of the problem with investing in TLRY is the company is steadfastly focused on developing medicinal cannabis products rather than recreational ones. Furthermore, TLRY is overly-focused on selling its products to Europeans while largely neglecting other markets.
TLRY’s recent third-quarter results underwhelmed, with revenue coming in nearly flat from the same period a year ago. TLRY’s comparably small recreational cannabis business spiked…
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