Cannabis Chart Of The Week: Where Are Sector Leaders Trading Relative To Their 52-Week Highs And Lows?
Portfolio Pulse from Viridian Capital Advisors
The Viridian Chart of the Week analyzed stock prices of leaders in various cannabis sectors relative to their 52-week highs and lows. Agriculture Technology is at a median of 131% of its 52-week lows, while Cultivation is at 159%, with companies like MariMed and AYR showing significant recovery. Psychedelics sector is up 158% from its lows with less volatility. Financial services show the lowest median recovery but are closest to their 52-week highs. The beer industry, used for comparison, shows lower volatility and higher average EV/EBITDA ratios than cannabis. The analysis suggests cautious optimism in the cannabis sector, with companies trading at less than 75% premiums to their 52-week lows, indicating a more measured investor approach to regulatory or legislative reform risks.
December 18, 2023 | 4:43 pm
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NEGATIVE IMPACT
AYR is trading at 354% of its 52-week lows, which is the highest in the Cultivation sector. However, this high recovery rate poses a risk of underperformance if negative news emerges regarding cannabis legislation.
AYR's significant price surge relative to its 52-week lows could make it vulnerable to negative legislative news, potentially leading to a price correction.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
NEGATIVE IMPACT
Cannabist reacted with exuberance to the HHS rescheduling announcement, reaching highs 3.75-4x their current levels. However, it is trading at significant gaps to its 52-week highs and is in the weaker half of the Viridian Credit Tracker credit rankings.
Cannabist's previous reaction to regulatory news and its current gap to 52-week highs, combined with a weaker credit ranking, suggest potential downside risk.
CONFIDENCE 65
IMPORTANCE 65
RELEVANCE 70
NEGATIVE IMPACT
4Front reacted strongly to the HHS rescheduling announcement but is now trading at a significant gap to its 52-week highs. It is also in the weaker half of the Viridian Credit Tracker credit rankings.
4Front's significant gap to its 52-week highs and its position in the weaker half of credit rankings may deter investors, indicating potential for price decline.
CONFIDENCE 65
IMPORTANCE 65
RELEVANCE 70
POSITIVE IMPACT
MariMed is trading at 118% of its 52-week lows, indicating a moderate recovery. It is preferred by Viridian over others due to its top ten credit ranking and significant operating improvements.
MariMed's position as a top ten credit and its operational improvements suggest a stable outlook, potentially attracting investors looking for solid companies in the cannabis sector.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 80