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NOT HIGH ON CANOPY GROWTH
11/17/2017 11:36:15 PM
HOME : FEATURES : QUESTION & ANSWER : NOT HIGH ON CANOPY GROWTH
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Wealth Builder
Gordon Pape writes on common-sense wealth-building strategies.



By Gordon Pape  | Friday, February 24, 2017


Q – First of all let me say that my wife and I have subscribed to your newsletter for years and are very happy with the advice that your team provides. My question is about Canopy Growth Corp. (TSX: WEED). I was wondering what your overall impression of this company is in terms of investment. There has been a lot of hype in the news lately that has led to an increase in the stock price but I am wondering if this is just hype or does the company actually substantiate the increase. – Justin C.

A – Canopy is a medicinal cannabis company, based in Smiths Falls, Ontario. Its share price has increased by more than 360% in the past 12 months. The company may have great growth potential if the federal government legalizes marijuana, but it may be somewhat overhyped at present. Although the company’s fiscal third-quarter financials (ended Dec. 31, 2016) showed a $3 million profit on $9.8 million in revenue compared with a $3.3 million loss in the year-ago period, inventory shortfalls have been a problem, recreational marijuana has not yet been legalized, and share price has been volatile. Market cap is about $2 billion, which is quite high for a company producing about $10 million in quarterly revenue. All in all, it’s not a stock I would recommend at this time. – Gordon Pape



Gordon Pape is one of Canada’s best-known personal finance commentators and investment experts. He is the publisher of The Internet Wealth Builder and The Income Investornewsletter, which are available through the Building Wealth website.

Follow Gordon Pape on Twitter at https://twitter.com/GPUpdates and on Facebook at www.facebook.com/GordonPapeMoney.

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© 2017 by The Fund Library. All rights reserved.

The foregoing is for general information purposes only and is the opinion of the writer. Securities mentioned carry risk of loss, and no guarantee of performance is made or implied. This information is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting, or tax advice. Always seek advice from your own financial advisor before making investment decisions.

 
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