I'm planning to take aggressive long positions on Aphria for a few reasons. Many traders trade by the niche, and cannabis stocks have seen a huge dip over the past year. Traders are therefore avoiding any stock with the cannabis name attached to it. They'll leave that to the stoners and college dropouts. The correction cannabis stocks have seen over the past year is indeed scary, and buying pressure has gone down considerably. There may well be more correction within this sector.
But one cannabis stock stands out as a diamond in the rough, a cannabis stock in disguise, and that is APH. At face value, one might see APH as a cannabis stock, but in reality after their acquisition of CC Pharma, up to 70% of their revenue is coming from conventional pharmaceuticals, not cannabis.
It is this key factor that makes me bullish on APH, and I am adding this stock to my portfolio for a few primary reasons:
1) Most of the revenue within this company is pharmaceutical, making it more stable and less cannabis-related than evident on a surface level.
2) The company is active in the cannabis industry, which as an emerging market has significant volatility/growth opportunities.
3) With a market cap of 1.17 B and growing, APH has more growth potential than larger-cap cannabis stocks like Aurora.
4) We are riding on important support with tantalizing resistance above, and below us is a "gap of death" which bulls should feel inclined to defend.
5) It is conventional wisdom that healthcare stocks perform better in recession, and we are 10 years into an economic boom. In the event of recession, this stock may act as a hedge for other parts of my portfolio. Already I have noticed that APH often increases at the same time as my gold holdings.
6) In the event of more economic boom, this stock may grow significantly as the cannabis niche becomes more conventional and accepted by government. There is also a slight chance a US Democrat will be elected president in 2020, which may cause cannabis stocks to break out of their current bear trend.
Buy the blood and drink it for the right reasons. The justification to hold APH outweighs the risk in my opinion. Therefore I am long and using a ladder strategy for my entries, as I would still classify this stock as high risk/high reward.
But one cannabis stock stands out as a diamond in the rough, a cannabis stock in disguise, and that is APH. At face value, one might see APH as a cannabis stock, but in reality after their acquisition of CC Pharma, up to 70% of their revenue is coming from conventional pharmaceuticals, not cannabis.
It is this key factor that makes me bullish on APH, and I am adding this stock to my portfolio for a few primary reasons:
1) Most of the revenue within this company is pharmaceutical, making it more stable and less cannabis-related than evident on a surface level.
2) The company is active in the cannabis industry, which as an emerging market has significant volatility/growth opportunities.
3) With a market cap of 1.17 B and growing, APH has more growth potential than larger-cap cannabis stocks like Aurora.
4) We are riding on important support with tantalizing resistance above, and below us is a "gap of death" which bulls should feel inclined to defend.
5) It is conventional wisdom that healthcare stocks perform better in recession, and we are 10 years into an economic boom. In the event of recession, this stock may act as a hedge for other parts of my portfolio. Already I have noticed that APH often increases at the same time as my gold holdings.
6) In the event of more economic boom, this stock may grow significantly as the cannabis niche becomes more conventional and accepted by government. There is also a slight chance a US Democrat will be elected president in 2020, which may cause cannabis stocks to break out of their current bear trend.
Buy the blood and drink it for the right reasons. The justification to hold APH outweighs the risk in my opinion. Therefore I am long and using a ladder strategy for my entries, as I would still classify this stock as high risk/high reward.
Comment:
More bullish sentiment is trickling into this stock finance.yahoo.c...-205305883.html?.tsrc=rss
Comment:
We are moving, right on schedule.
Comment:
Stock market looks corrective. Trade closes and re allocated to gold.
Cheers