Ayr Wellness is poised for substantial growth through 2022.
The small MSO will quickly rival the size of global cannabis stocks with market valuations in excess of $10 billion.
The stock trades at only 7.6x EV/2022 EBITDA target of $325 million.
This idea was discussed in more depth with members of my private investing community, Out Fox The Street. Learn More »
In a matter of months, Ayr Strategies (OTCQX:AYRWF) made a transformative deal in Florida and changed their name to Ayr Wellness. The U.S. multi-state operator ("MSO") now forecasts massive revenue and adjusted EBITDA targets in 2022 making the company a major player in the cannabis world. My investment thesis remains very bullish on the stock even after a 60% gain since the last article less than three months ago.
The Conference Board reported this morning that Leading Economic Indicators for October came in at 0.9% easily surpassing expectation (how is that considering the numbers are known?). The leading indicators are usually an accurate predictor of economic conditions in the next months. This number continues to increase at a solid clip. If only the US market could focus on leading indicators like these and jobless claims and less on Europe. Not going to spend much time highlighting the individual components because it just doesn't matter. The numbers have been strong and will likely continue as like as monetary policy is accomondative. It likely won't change until investors become overly bullish on the stock market. The economy will continue rolling along producing jobless claims below expectations, but the stock market will get roiled by Europe. Some day though that will end and this bullish data will matter. 10:02 AM Oct. Leading Indicators: Leading Index +0.9% vs
Aurora Cannabis was left out of the major deal making in 2018. The cannabis company updated FQ2 guidance to revenues of $50 to $55 million with a continued focus on pure production growth. The stock is down as the market is becoming less impressed with commodity farming operations due to the prime Oregon example. The stock is below key resistance at $5.40 as medical cannabis patient totals failed to impress. As the end of 2018 came and went, Aurora Cannabis ( ACB ) was a notable absentee from the deal making in the cannabis market. Just about all of the other major Canadian cannabis players got large investments or signed up powerful partnerships, but the related stocks didn't generally maintain rallies following the deals. Based on the early legalization data in Canada and Oregon, the best option for Aurora Cannabis might actually be selling production capacity while the Canadian market remains hot. Read the full article on Seeking Alpha. Disclosure: No
Kohl's has activists wanting the company to spin off the e-commerce division to unlock value. The company already has plans to grow the business and activists have yet to show how a full omni-channel business can operate as two different companies. The stock is absurdly cheap at 7x EPS targets and Kohl's will repurchase over 15% of the outstanding shares this year. Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street. Learn More » After an outstanding quarter with business booming, Kohl's ( KSS ) faces activists wanting to break up the business. The omni-channel retailer is facing the same pressure as other department stores to separate the e-commerce business in what amounts to financial engineering. My investment thesis remains very bullish on the retailer as the company reinvents the shopping experience. Read the full article on Seeking Alpha. Disclosure: Long KSS. Please read the disclaimer page for more details. Update -