D. H. Taylor

About the Author D. H. Taylor

I am an economist and mathematician having studied at the University of Denver. I trade my own account. I eat what I kill. I focus on the consumer and the economics of that consumer. I start my focus on the consumer and look at economic data to determine how strong the consumer is at any moment. From that, I extrapolate the state of the consumer and shopping trends at retailers as well as purchasing of housing and autos. I follow the major trends of these to determine the health of the economy here in America and abroad. Being from California and Colorado, I am all-too familiar with cannabis. I am actively building a portfolio of cannabis biopharmaceuticals for my private investment. Also, I evaluate the cannabis stocks on a whole.

CannTrust (CTST): An Undervalued Pot Stock Just Got Listed on the Big Board


Liquidity is often a key factor in how a stock will be priced.  Often times, if there is not enough liquidity, a stock may not be priced appropriately based upon its fundamentals. I believe this to be the case with CannTrust, a company who’s stock I see being 50% below its true value, and just got listed on the NYSE big board.

Canntrust to Be Listed on NYSE

You can start trading CannTrust today on the NYSE.  The new symbol is (CTST) and will take over where the OTC symbol has left off.  CannTrust is a Canadian company that has been around for a number of years and has multiple accolades derived from its products.

Now that the company’s stock is listed on the NYSE big board, moving from the OTC markets, more investors will have easier access to the stock which may tighten the bid/ask spreads and potentially add more volume.  This is a big step for this company and their stock valuation.

Is CannTrust a Good Buy?

Ask yourself what a fair price for a pot stock would be.  The first place to start is to determine how much cannabis the company can produce.  In the case of CannTrust, that amount will be 100,000 kg. of cannabis annually.  The company has just received approval to expand their Niagara facility and add an additional 50,000 kg of annual production.  That brings their total production up to 100,000 annually.  Given a $5.20 average wholesale price of cannabis the company can expect revenues of ~$500 million annually.  With a 17% net margin and investors bidding up the stock to 20-times P:E ratio, the company should be valued $~1.75 billion.  CannTrust market capitalization is currently $925 million, about half of where it should be.  To me, this is a significant opportunity.

But, there is something else that I like a great deal about CannTrust and it is their customer accolades.  The Canadian Cannabis awards were held in November of last year and CannTrust dominated the winnings with 7 awards.  These awards were derived from Canadians, the end user of the products.

I am looking to get into CannTrust but am going to wait for some kind of pullback in the stock.  I believe CannTrust will be a top performer over the years and an investment in the company will reap many great long term rewards.

Although I believe that CannTrust is a strong buy I am not in the stock myself, yet. Over the past few months and years I have been acquiring cannabis stocks en masse in my own private portfolio.  I am a firm believer in the business of cannabis and expect there to be tremendous long term growth in this segment.  My outlook is for 10-25 years on some of these stocks. We are at the very beginning of this movement.

Author’s Disclosure:  I currently do not own any CannTrust stock but am considering going long on a pullback of the stock, perhaps at $6.50.

Check out the articles in this category focused on cannabis stocks. By gaining a strong foundation in both the fundamentals and technical details usually involved in cannabis stocks, you’ll be able to invest with greater confidence.

 

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