Why This Pot Stock Is Dirt Cheap
The economic impact of the coronavirus is still unknown, but the stock market is pricing in a worst-case scenario. This means opportunities, particularly with marijuana stocks. A top player like Curaleaf Holdings Inc (OTCMKTS:CURLF, CNSX:CURA) could stage a strong rally.
Consider that CURLF stock can be bought for under $5.00, a major discount from its 52-week high of $11.73. For investors with a long-term view, Curaleaf stock could be a great opportunity.
With a market cap of more than $2.0 billion, Curaleaf has the scale to become a leader in the highly lucrative U.S. marijuana space.
Curaleaf is a one-stop pot company. This means it controls all parts of its operations, from cultivation and processing to marketing and distribution.
Curaleaf focuses on regions of the U.S. with high populations and limited competition. (Source: “Select Your State,” Curaleaf Holdings Inc, last accessed March 6, 2020.)
Pathway to Profitability Bodes Well for CURLF Stock
Curaleaf reported trailing revenues of $177.7 million for the last 12 months. The scale and potential size of the U.S. marijuana market provides strong tailwinds for Curaleaf stock to vault much higher.
The company is currently losing money, but there is a pathway to profits. Curaleaf is expected to earn $0.18 per diluted share in 2020. (Source: “Curaleaf Holdings Inc,” MarketWatch, last accessed March 10, 2020.)
Technical Picture Shaky but Should Reward Patient Investors
A look at the chart of CURLF stock shows the strong rally from the November low to a breakout above $7.50 in early January. Then, unfortunately, the coronavirus surfaced, driving the stock south of $5.00 and back to its November lows.
If not for the broad market selling capitulation, Curaleaf stock was looking bullish, riding an ascending triangle prior to the virus outbreak.
The emergence of a bearish falling knife formation saw CURLF stock break below its 50-day and 200-day moving averages.
Chart courtesy of StockCharts.com
A recovery in the broader market could provide the juice to drive Curaleaf stock to springboard to much higher prices.
The reality is that nothing stays down forever. That will likely be the case with Curaleaf Holdings Inc, which provides stock traders with the possibility of a double.
Ultimately, CURLF stock could retake packets of resistance at the moving averages followed by $8.00 and $9.50–$10.00.