There is a saying that value is where you find it and it is right, to a degree. Two stocks with all else in common can be said to be equally valued if both trade at the same value relative to the fundamentals. A stock that trades for $1,000 might be cheap compared to a stock that trades for $100 or even $10 or a $1 if the numbers are right. It all depends on the number of shares, earnings, etc. The problem, for smaller investors more than others, is that finding value where “you find it” doesn’t mean that all stocks are affordable.
Smaller investors may be attracted to the value of Amazon (NASDAQ: AMZN), Shopify (NYSE: SHOP), or Chipotle Mexican Grill (NYSE: CMG) but find the $1,000 price tag is far too high. At that price point investing in a single stock can leave far too few options when it comes to diversification and exposure. And that’s where penny stocks can come into play. Penny stocks, or stocks that trade for under $1.00, are a great way for smaller investors to get into the market, especially budding markets like the Cannabis industry.
Two Vertically Integrated Cannabis Penny Stocks
By far the best investments in the cannabis space are the vertically integrated operators like The Green Organic Dutchman (OTCMKTS:TGODF) and Medmen Enterprises (OTCMKTS:MMNFF). Vertically integrated companies control the entire operation from seed to sale including the facilities and distribution system for both. The Green Organic Dutchman is a smaller operator located in Canada’s most populous province of Ontario. The company is well-positioned as a growing boutique brand with sales supported by both the expansion of Ontario’s cannabis sales infrastructure and growth in Canada’s other cannabis markets. In terms of sales, sales have begun to grow on an exponential basis setting the company up for profitability sometime in calendar 2020.
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