LXX Stock Price Forecast
In an industry already well known for its volatility, marijuana penny stocks add another unpredictable layer to the game that more cautious investors will want to avoid while daring buyers and day traders may find the perfect tool to achieve their goals.
Lexaria Bioscience Corp (OTCMKTS:LXRP, CNSX:LXX) is a good illustration of the heightened risk/reward game that investors will play when they put their money into marijuana penny stocks, especially ones on the lower end of the value spectrum. The LXX stock price, as you’ll see, has made strong gains, but has fluctuated more dramatically than most.
To cut to the chase, I wouldn’t recommend smaller marijuana penny stocks for most investors. The Lexaria Bioscience stock price and its steep fluctuations show that, when you get into marijuana penny stocks, you’re essentially playing a far riskier game for what I would consider to be only moderately better rewards.
Chart courtesy of StockCharts.com
You see, even among the largest companies in the marijuana industry, there is still room for massive growth. Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB) and Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED) have proven as much.
Despite being among the largest players in the industry, with multi-billion-dollar market caps and massive foundational support in terms of production and connections, these companies were still able to behave like smaller ones in terms of growth. Both have jumped triple-digits in value over the past six months.
While the LXX stock price has performed admirably over the same period, refer to the stock chart above to see that the company also experienced far more extreme swings.
At one point during that time frame, Lexaria Bioscience stock gained over 500% in value, only to give a lot of that back and then fall to 283%. Obviously, that is still a fabulous return, but the thing is, if you happened to get in at the wrong time, you would have lost a lot of money.
While all three stocks generally followed the same trend as the industry took its hits in 2018, as you can see, Canopy Growth stock had the shortest downturns, followed by Aurora Cannabis stock, while those two stocks still registered strong gains, comparable to LXX stock.
The volatility inherent in penny stocks is only magnified in the marijuana industry. For most investors, there’s little reason to take on this added risk, seeing as how the benefits don’t really outweigh the potential costs.
While marijuana penny stocks are great for day traders, our average reader is usually better off investing in stocks with stronger foundations and more staying power because, in the marijuana industry, those companies are still more than capable of impressive growth.