All eyes are on the cannabis sector at present. Nobody quite expected the bearish downturn of last week that infiltrated this sector. But should you be opportunistic here? Has the downturn exposed some very undervalued stocks?
One man’s trash is another’s treasure and all that…
Undervalued Stocks: Stick With Cannabis
Cannabis was made legal in Canada last Wednesday. And one stock selling cheaply since, which might prove itself to be worth a lot more, is Supreme Cannabis Company Inc. (TSXV:FIRE).
Since its highs of $3.20 back in January, Supreme Cannabis is down 40% on the year. So okay, that may be a concern.
However, despite this underperformance, it is hard to overlook Supreme’s robust and wide cannabis distribution network across Canada.
Supreme also has a better market capitalization than many of its cohorts, and at $1.51, it is trading at a fraction of that capitalization.
This looks like it could be a stock for solid long-term prospects. A broad distribution footprint, coupled with robust revenue growth and strong management teams, mean this company has all it needs to be a key player in the Canadian Cannabis industry.
So does Supreme present as an undervalued stock? You decide!
Undervalued Stocks: The Green Organic Dutchman (TSX:TGOD)
At its current selling price of $4.12 and down 17% on the day, you could consider The Green Organic Dutchman more than half-price. Of course, that is when considering only a month ago it was worth $8.78.
The question is: at $8.78 was TGOD overvalued, or is $4.12 representative of an undervalued stock? It’s hard to ignore that at current rates, TGOD stock is falling below its IPO value, and that is worrisome.
However, operational advancements have been big for the Green Organic Dutchman. It secured an additional $76 million in bought-deal financing late last week.
It also is on track to open five dispensaries in Jamaica by 2019, and by the end of this year should be operating across three continents and 12 countries. Despite the huge market at its feet in Canada, like other cannabis companies, it is set on global expansion, and international business may bring the real value for this stock.
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