- The badly beaten cannabis industry is starting to come to life.
- The bear market killed the unsustainable hype in the industry.
- One analyst predicts that pot stocks are poised for a resurgence.
Why go for overbought FAANG stocks that have limited upside when you can buy a badly beaten cannabis industry that’s ripe for bottom-picking?
Get CBD crumble Premium Quality Products at dieselhemp.com
After a strong start in , the cannabis industry entered a vicious bear market. Weak sales performance , as well as government issues , drove pot stocks to record lows. Exchange-Traded Fund MJ, a bellwether of the industry’s performance, printed a yearly high of $ in March. The ETF then plunged to $ eight months later for a massive 4% devaluation.
Many were pulled in by the cannabis boom between 228927 and early . The pot industry was considered high-growth. Investors bought marijuana stocks regardless of fundamental value out of the belief that prices will go higher. During that time, leading cannabis names were extremely overvalued.
Cronos Group (TSE: CRON) had an astronomical PE ratio of 1, . (in September) . Canopy Growth Corporation’s (TSE: WEED) PE ratio skyrocketed to . 7 . With the correction over the last few months, many cannabis stocks are no longer overvalued. Some like Cronos Group are actually undervalued with a PE ratio of 9.
In short, the bear market eliminated the mania in the industry. Now, pot stocks are in a position to grow in a sustainable fashion .
Marijuana Industry Flashing Bottoming Out Signals
The widely-followed traderstewie took to Twitter to share his rosy outlook on the distressed industry. The analyst wrote that a new year often comes with a new trend. Last year, Apple was one of the most dominant stocks in the S&P . This year, pot stocks could grab headlines.
GIPHY App Key not set. Please check settings