The marijuana industry is composed of firms that either support or are involved in the legal research, development, cultivation, production, distribution, marketing and sale of medical and recreational marijuana.
Cannabis has been gaining wider acceptance and has been legalized in an increasing number of nations and states for medicinal, recreational and other uses.
Recreational marijuana got the green light from lawmakers over the past six months in five new states: Arizona, Montana, New Jersey, South Dakota and Virginia.
Many large marijuana companies have continued to post considerable net losses as they focus on investing in resources and equipment to accelerate revenue growth.
When analyzing a company, it is useful to have an objective framework that allows you to compare companies in the same way.
Amyris is an industrial biotechnology company.
Amyris has been working to create synthetic cannabinoids that could disrupt the industry and make it less reliant on large, expensive growing facilities.
Its biotechnology platform and industrial fermentation process replace existing complex and expensive manufacturing processes.
The company’s Value Score ranking is very high across several traditional valuation metrics, with a score of 84 for the price-to-sales ratio, 99 for the enterprise-value-to-Ebitda .
This means it ranks in the top tier of all stocks in terms of its weighted relative strength over the last four quarters.
The grade is based on the statistical significance of its last two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.
It is engaged in the selling of products, such as organic nutrients and soils, advanced lighting technology, hydroponic and aquaponic equipment and other products needed to grow indoors and outdoors.
The company serves a community of commercial and urban cultivators growing specialty crops including organics, greens and plant-based medicines.
Sales increased 172.7% year over year for the quarter ending March 31, 2021, to $250 million, while adjusted earnings per share grew over 280%.
The two companies, both of which operate in the cannabis-focused consumer packaged goods space, will operate as Tilray.
A higher-quality stock possesses traits associated with upside potential and reduced downside risk.
The company ranks poorly in terms of its return on assets and gross income to assets, ranking respectively in the 14th and 10th percentile of all U.S.-listed stocks.
I am also the author of Better Good than Lucky: How Savvy Investors Create Fortune with the Risk-Reward Ratio .
After completing the MBA program at the University of Denver, I spent almost 15 years working on Wall Street as an equity analyst at a long/short value investment firm and a senior associate at a private equity firm.
While I enjoyed Bill Browder’s high finance thriller “Red Notice” and would love to replicate Kurt Vonnegut’s infallible system for stock investing in the book “The Sirens of Titan,” the set of principles that guide my investment decision-making process would be described as value or contrarian investing.