2018 Investment Series Post 8

Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, April 13th.

Cronos Group Inc.

The eighth pick of the Let’s Be Millionaires investment series goes to Cronos Group Inc. (CRON).

Cronos Group Inc. is a geographically diversified and vertically integrated cannabis group with the majority of its business currently in Canada. The company has either whole or part ownership of several cannabis producers and is on a mission to become a global player by acquiring other companies in the space over time in different geographical regions.

I have been interested in making an investment in a “pot stock” for a while now. After the ridiculous rally that took place for practically every pot stock at the end of 2017 things have cooled off enough for me to enter the space.

I love that Cronos Group is essentially a portfolio of companies that produce marijuana and related products. I feel that this diversity allows for a better chance of Cronos Group coming out on top as the space becomes more and more competitive because they will have a hand in almost everything and can then focus on the areas of the industry that are booming the most.

Another thing to note is that CRON stock trades on the NASDAQ. This is actually a rarity for pot stocks and a positive sign for the company to be listed on one of the major US stock exchanges.

Check out Cronos Group Inc.

About The Stock

Just a year ago CRON stock was worth just $2. Today it is worth $7. As I stated earlier pot stocks went on a tear at the end of 2017. CRON rallied from a price of $2.50 at the beginning of November all the way to a high of $11 in early January. That works out to a 340% gain over two months if you had managed to time the peak which is absurd.

Following the high, CRON stock proceeded to drop 50% and set a recent bottom at $5.50 in early February. Since then the stock has fluctuated and re-tested the $5.50 bottom in early April. Following the re-test, CRON stock has rallied up to around $7 at the present time, at which point I acquired $1000 worth.

As of now Cronos group inc. has an astronomical PE multiple of nearly 350. As an investor, a number that high should tell you that buyers of the stock are extremely speculative and believe that there will be extreme earnings growth in the future. Cronos Group has a market cap of roughly $1 billion making it a small cap stock but also the 6th largest Pot stock by market cap.

The Speculation

The speculation on CRON stock should be pretty obvious. Legalization is coming folks. Marijuana isn’t some hard core drug and is in no way more harmful than alcohol or tobacco. Yes, there will be political battles, but as a financially oriented person I don’t see how everyone hasn’t decided on the legalize, tax and regulate course of action by now.

If the legalization scenario does play out then the market for legal weed will boom. These Canadian Cannabis giants are going to be well positioned to take advantage of the boom. I think that The Cronos Group specifically has the potential to come out on top over the coming years and that is why it is the eight pick of this year’s investment series.

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