Pot Stocks 10X (Episode 1) Lights Out, Moon Shot

Thomas George and Johnny Mastromattei talk shop and trading pot stocks in their debut edition of Pot Stocks 10X Episode 1: Lights Out, Moon Shot!

How Much Upside is Left in the Aphria Tank?

They share a victory lap after slapping down the short sellers, helping the stock rise from $5/share (CAD) to $13.30/share. The main question after nearly securing a 3-bagger (#APHA15) is how much upside is left in the stock?

Short answer, a lot. The valuation gap between Aphria at 7x EV/EBITDA vs the peer group average at 17x EV/EBITDA.

Marijuana Industry 2020 EV/EBITDA

2020 EV-EBITDA Multiple Comparison C10X - Feb 14 2019
Source: Sedar Filings and Capital 10X Estimates

Digesting the Rationale for the Canopy Short Position?

Johnny’s been getting a lot of hate mail from Canopy Growth (TSX: [stock_market_widget type=”inline” template=”generic” color=”default” assets=”WEED.TO” markup=”{symbol} {currency_symbol}{price} ({change_pct})” api=”yf”]) fanboys about being short the stock. He explains the rationale as being a hedge for his long position in Aphria (TSX: [stock_market_widget type=”inline” template=”generic” color=”default” assets=”APHA.TO” markup=”{symbol} {currency_symbol}{price} ({change_pct})” api=”yf”]), valuation being the key rationale, Canopy is one of the most expensive pot stocks.

Thomas talks about why he took a long position in Canopy in December, during the market carnage one of the biggest deciding factors was how much cash the company had on its balance sheet.

Years of Cash Left at Current Burn Rate

Marijuana Industry Years of Cash Remaining - Nov 16 2018
Source: Capital 10X Estimates

Namaste: 2019 Bagholder Pledge

The boys take a crack at all the nonsense going on at Namaste Technologies (CDNX: [stock_market_widget type=”inline” template=”generic” color=”default” assets=”N.V” markup=”{symbol} {currency_symbol}{price} ({change_pct})” api=”yf”]), the company booted their illustrious CEO Sean Dollinger out of the company for a litany of improprieties only to take him back as a ‘special advisor’ a couple weeks later!

They’ve invited him to join them on Pot Stocks 10X and have started a very special ‘Sean Dollinger: Bagholder Pledge 2019’ for shareholders.

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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Capital 10X gets down to the real money business, actionable financial insights for traders and investors. We analyze company earnings, interview management teams and help teach the fundamentals of financial analysis and options trading. Our mission is to hunt for genuine 10 baggers.
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