Jefferies sees The Green Organic Dutchman (TGODF) stock doubling in the value of the course of the next year with potential to go even further.
TGOD is a Canadian organic cannabis producer that Jefferies analyst Owen Bennett believes can see a price target of approximately $6.00, up from the current price of just below $3.00. And, the analyst also advises on an upside scenario well above these levels at $14.00. (To watch Bennett’s track record, click here)
The analyst has issued a Buy rating and execution: Investors will be quick to note that the price target for TGOD is well within the wheelhouse of the company’s stock. The world stock markets sold off in November of last year; TGOD sold off right along with the markets and the cannabis industry. The price target Bennett has issued puts the stock within those prices from just last year. Over time, the stock is expected to perform to these levels and this is a likely outcome.
TGOD: Planning and Execution
The standouts in the research report is that TGOD has planned and executed a well thought-out strategy to bring a consumer-minded product to market. Whereas some companies have started out as medicinal cannabis providers, TGOD has its origins with the framework of adult-use legalization as their basis. TGOD has been driven by having products for this market available to consumers.
But, that organic segment may be the key to TGOD’s future success, as the report points out. Organic cannabis is a relatively uncluttered segment of the market. Whereas most competitors are lumping in to the bulk of mainstream adult-use cannabis products, there will be a distinct market segment that does not have a large number of market participants crowding the product segment.
Downside Potential For TGOD
No analysis would be complete without some balance and Bennett pointed out one concern they have with TGOD, that being a lack of presence in the United States. TGOD does have a strong presence in Europe, however, as noted. And, hemp production is buoyant in Europe.
However, I would point out that while this would have the potential to be a long-term concern, the recently passed Farm Bill has made significant changes to the legality of cannabis in its three forms: hemp. THC-based, and CBD-based. Companies from Canada have been making moves into the United States very quickly since the passage of the Farm Bill and it may be a simple matter of time until TGOD executes a well planned partnership that benefits
Another concern that the industry does not have a statistical benchmark to fall back on is how much cannabis will be consumed that is purely organic? Typically, the industry looks toward the state of Colorado to see what has occurred there and works within a linear correlation. Unfortunately, the state of Colorado does not parse out organic data for other participants within the industry to work with. Still, there is a market share that is organic. TGOD will be able to fulfill its roll in that segment of the market.
In general, TGOD is ticking a lot of the boxes of a well-planned strategy. If TGOD executes as well as they have planned then the stock should perform significantly, recuperating the losses taken with the sell-off at the end of last year.
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.
Author’s Disclosre: I am long TGOD and have had a position for many months. I am not considering adding new positions at this time.