Buy Alert: This Little-Known Pot Stock Is All Set to Explode!
March 18 2021 - 5:23AM
Finscreener.org
When you look to invest in a
nascent industry, you need to be aware of certain risks. Companies
part of such industries have the potential to generate multi-fold
returns. Alternatively, they can also burn massive investor
wealth.
We have seen how investor
enthusiasm was crushed during the dot-com bubble at the start of
this millennium. Several tech companies filed for bankruptcy and
were wiped out once the dust settled. However, fundamentally strong
companies such as Amazon (NASDAQ:
AMZN) and Alphabet (NASDAQ: GOOG)(NASDAQ:
GOOGL)
have survived and thrived in the last two decades, thereby
increasing investor wealth at an exponential rate.
The cannabis industry can be
compared to the tech boom or the dot-com bubble. Currently, several
pot stocks especially north of the border are grappling with
a slew of structural issues. However, if you look closely you
will also find some hidden gems such as Jushi Holdings (OTC:
JUSHF).
Jushi Holdings- An
overview
Jushi Holdings is a cannabis and
hemp company. It engages in the cultivation, processing, and
distribution of medical and adult-use marijuana products. The
company is focused on building a portfolio of branded cannabis and
hemp-derived assets in
several jurisdictions including Pennsylvania, Ohio, Virginia,
California, Nevada, and Illinois.
Earlier this month, Jushi
Holdings opened its 17th retail cannabis store. Eleven
of these stores are located in Pennsylvania which is one of the
fastest-growing cannabis markets in the U.S. The cannabis player
aims to open 10 to 12 new retail pot stores in 2021.
In the first quarter of 2021,
Jushi expects to rake in $40 million in sales, indicating
year-over-year growth of 365%. In fiscal 2021, it forecasts to
generate between $205 million and $255 million in sales, up from
just $80.6 million in 2020. Analysts tracking the firm expect it to
report sales of $216.3 million in 2021.
Valuation and
more
Jushi Holdings is valued at a
market cap of $818 million which suggests its trading at a forward
price to sales multiple of 3.78x which is quite reasonable
considering its growth rates. While several marijuana companies are
grappling with mounting losses, Jushi is poised to turn profitable
by the end of this year.
Since July 2019, Jushi Holdings
stock has already returned a staggering 300%, easily outpacing the
broader markets. Marijuana legalization in the U.S. is
expected to gain pace which means Jushi should touch record highs
if cannabis is legalized at the federal level.
Right now, legal marijuana sales
in the U.S. are forecast to grow at an annual rate of 21% between
2019 and 2025. In fact, the pot industry in the country might even
cross $40 billion by the end of the forecast period.
Jushi Holdings is fast gaining
traction in regions where it has established a strong presence.
Further, it part of an expanding addressable market and the
company’s widening profit margins make it a top stock to buy and
hold right now.
Jushi (QX) (USOTC:JUSHF)
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