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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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
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