This week we saw the outcome of the Georgia Senate sweep, giving Democrats control of the White House and now Congress for at least the next two years.
And there’s a formerly beaten-down sector that has been on fire, mostly since the 2020 election: I’m looking at pot stocks for 2021.
And before I get to my personal picks to reel in profits, I will say this is just the beginning of the sector’s rise.
WealthPress’ Jeff Yastine
With Democrats in control of both chambers of Congress, it will mean a more favorable backdrop for the pot industry — and pot stocks for 2021… and beyond.
Think federal legalization… new banking laws…
But I think there’s more to this story than just that.
I have shied away from pot stocks before 2021 as far as owning or recommending them as good investments. Mainly because most cannabis companies have been big-time money losers.
I recommended my first pot stock to watch about a year ago when they were in a major downturn. At the time I called it the “pot stock apocalypse,” and I suggested buying Innovative Industrial Properties (NYSE: IIPR). It’s a real estate company that buys and rents out cannabis warehouses and grow farms.
I liked IIPR because it was generating substantial, growing profits on a consistent basis.
Here’s what I wrote one year ago this week…
“If investors are still willing to assign a P/E ratio of 44 to the stock a year from now, and the company hits its earnings projections of $4.04 (a share in profits), that gets us a stock price of $177 — a gain of 128%.”
Lo and behold, IIPR’s stock price one year later is… $177!
Nailed it!
They don’t all turn out that way, of course. But it’s nice when they do. It shows the benefits of focusing on a company’s value relative to profits… opposed to relying on the story a company or industry tells about itself.
So here’s what’s interesting about pot stocks in 2021: Some companies are actually profitable! Or at least on the verge of being so…
Watch my short video and let’s talk about names like Canopy Growth (Nasdaq: CGC), Aphria (APHA), Tilray (TLRY) and one over-the-counter stock — which I normally avoid — that I like.
And as always, send your investing questions to jeff@yastine.com. Be sure to subscribe to my new YouTube channel to see all my videos. You can also follow me on Twitter and Facebook.
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