When looking for undervalued stocks, a price drop of 30% might be what you are after. After a bumpy few weeks, Canopy Rivers (TSXV:RIV) is in that position. These stocks are straddling a price point that feels undervalued—but is it?
So what is Canopy Rivers? And why should you be excited about its undervalued stock potential?
Undervalued Stocks: Canopy Rivers
Canopy Rivers went public on September 20th and saw an impressive 150% growth on its first day. At this point, the stock was worth $8.75; however, it has fallen since.
Its current selling point of $5.35 means that the price has lost over 30% in recent weeks. So could a 30% drop mean undervalued stocks potential?
You see, Canopy Rivers isn’t just an ordinary stock. The company is owned and controlled by Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), only one of the biggest names in the cannabis business. This affiliation and close relationship can only serve to protect and help RIV stock.
Leveraging its affiliation, Canopy Rivers has the potential to become equally as big as its parent company, as the two work collaboratively to “identify strategic counterparties seeking financial and/or operating support.”
Canopy Rivers describes itself as “a unique investment and operating platform structured to pursue investment opportunities in the emerging global cannabis sector.”
And, just like Canopy Growth Corp, Canopy Rivers excels: it has “developed an investment ecosystem of complementary cannabis operating companies that represent various segments of the value chain across the emerging cannabis sector.”
So, straddling the penny stock price-point of $5, RIV could potentially fall into the undervalued stocks category if only for this close affiliation to Canopy Growth. The potential for Canopy Rivers is greater than most.
Undervalued Stocks Making Deals
Canopy Rivers’ portfolio is continuing to develop, and only this week, two of Canopy Rivers’ pillar companies, PharmHouse and TerrAscend, signed a supply deal together. The pair entered into an ‘offtake agreement’ whereby PharmHouse will supply TerrAscend with cannabis products from 20% of the flowering space at its 1.3 million square foot greenhouse facility.
When you find undervalued stocks, it can be exciting, but don’t get carried away! Do your research and make sure you are sure about your investment choice.
Featured Image: Depositphotos/© aremafoto