Why This Cannabis Stock May Rise Even More – LPC

OrganiGram cannabis stock up 62% this year, and seems likely to grow further.OrganiGram Holdings Inccannabis stock has risen 62% since the beginning of January 2019, taking its market cap to $1.3 billion. However, for industry insiders, the jump isn’t puzzling as much as the fact it took so long to happen.

“OrganiGram hasn’t generated as much buzz as bigger Canadian marijuana stocks. But that might not be a bad thing,” said Motley Fool contributor Keith Speights in September 2018. Since then, the cannabis stock has doubled.

The New Brunswick-based OrganiGram currently owns a three-level, indoor growing facility located in New Brunswick. Through expansion, the latest Motley Fool report should more than triple its production from 36,000kgs to 113,000kgs in 2019. (Please see link to full article below.)

What’s more, OrganiGram has licensing agreements in all ten provinces – only two other companies enjoy those benefits. That’s another reason why this stock is becoming an investor darling. Canada is not the limit, either. Plans are already in the works to expand internationally as many Canadian cannabis companies are already doing.

Cannabis Valuations Way Up, But Not OrganiGram – LPC

Experts have talked about the huge cannabis stock valuations – something that’s typical of a boom industry. However, OrganiGram’s valuations are much less than others.

Based on 2019 estimates, OrganiGram’s cannabis stock will trade at 22x this year’s earnings before interest, tax, depreciation and amortization (EBITDA). The average cannabis stock in Canada trades at 226x EBITDA, making it a tenth the valuation. Combine that with the company’s strong cash holdings (it is funding its own expansion), and that makes OrganiGram one of the “best bet” cannabis stocks available, according to the Motley Fool report.

Next year, OrganiGram’s stock is projected to have a 14x EBITDA, compared to the average 53x.

(As always, due diligence is required before purchasing any cannabis stock.)

This editorial content from the LPC News Editor is meant to provide analysis, insight, and perspective on current news articles. To read the source article this commentary is based upon, please click on the link below.

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  1. Captain Dred

    There’s an obvious reason why it took theirs a long time to increase in value. They lost most of their customers, and all of their reputation, when they lost their organic certification. Are all of the class action lawsuits settled yet? They poisoned their customers with banned pesticides, and got caught multiple times doing it. I would not call Organigram a safe bet yet. Highly risky investment due to their past practices and poor business decisions.

    1. LPC News Editor Listing Owner

      Well there you go — that’s what due diligence is all about. Of course, one person’s “safe bet” can be another person’s “Sell”, as you clearly illustrate. Not sure what the future holds for this company, but the run-up so far this year has been impressive from a purely stock performance point of view.