There are two major schools of thought in the investment world regarding which types of stock opportunities are worth pursuing.
First, there’s value investing, where the essential goal is to find companies that seem to be worth more than the market currently values them at. Value investors focus on the stability of a company rather than its growth prospects.
Second, there’s growth investing. Growth investing is all about finding companies that you believe will be subject to rapid revenue, earnings, or cash-flow growth. Successful growth investing relies heavily on finding companies where the management team in place is capable of capitalizing on expansion opportunities.
Here at Growth Stock Network, our focus is very clear. We’re seeking out great growth stock investment ideas. The question we’re asking today is whether or not cannabis companies are growth stocks?
The simple answer is yes, some cannabis companies are growth stocks. Emphasis on some cannabis companies. The marijuana stocks that fit the bill can be hard to find. Given how the hundreds that are out there, it can be hard to find the ones that truly will grow.
Additionally, there are only a few marijuana stocks that pay or have paid a dividend of any kind. Many value investors seek out dividend power-plays in the rough. Many marijuana companies are not even cash-flow positive yet!
While there’s no doubt that the cannabis industry is taking off on a global level, that does not mean that all companies operating in the space will catch the wave. As previously stated, there’s heavy reliance on the management teams in place at these companies.
The marijuana industry is a difficult one to navigate. From complex laws and regulations, to special tax treatments and more, the cannabis industry is not without its hurdles.
Beyond the inherent difficulties in running a marijuana-related business successfully, the massive growth potential in this industry makes it a great target for bad operators looking to make a quick buck off of its shareholders.
Back in March of this year, The SEC charged a “marijuana-related company and executives with touting bogus revenues.” Using “illicit stock sales,” one of the fraudsters was buying “a luxury home in the Pacific Palisades.” Avoiding those types of companies is key, and due-diligence is a must.
Companies like that are why Growth Stock Network has developed a long and thorough process for digging up the very best growth stock opportunities. By meeting the management face to face, I’ve gotten a feel for the way some cannabis companies really operate.
There are some marijuana stocks out there that will really hit it big while some others inevitably fall flat. Those investors that find the true growth stock opportunities will be happy they did. Many investors have already made a killing off of cannabis stocks, but the industry growth is far from over.
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