Cronos: The Safer Way To Gamble On The Cannabis Rescheduling Hype
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Julian LinInvesting Group LeaderFollow5ShareSavePlay(7min)Comment(1)SummaryCronos differs from peers due to a robust cash position and disciplined cost management.CRON's $824 million in cash and investments, with no debt, provide substantial downside protection versus Canadian peers.The recent CanAdelaar acquisition at 1.4x revenue and 2.4x EBITDA highlights management’s disciplined M&A approach.Despite improved gross margins and profitability, CRON’s high valuation and limited direct benefit from US rescheduling temper the investment case.
Getty Images It might be that time of the year again - to buy cannabis stocks. Cronos Group (CRON) is a Canadian operator and has seen significant volatility due to news of potential rescheduling. While the company does not appear poised toThis article was written byJulian Lin36.73K FollowersFollowJulian Lin is a financial analyst. He finds undervalued companies with secular growth that appreciate over time. His approach is to look for companies with strong balance sheets and management teams in sectors with long growth runways. Julian is the leader of the investing group Best Of Breed Growth Stocks where he only shares positions in stocks which have a large probability of delivering large alpha relative to the S&P 500. He also combines growth-oriented principles with strict valuation hurdles to add an additional layer to the conventional margin of safety. Features include: exclusive access to Julian's highest conviction picks, full stock research reports, real-time trade alerts, macro market analysis, individual industry reports, a filtered watchlist, and community chat with access to Julian 24/7. Learn more.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.