TODAY: Your Most Pressing Questions Answered
Let’s jump right into your questions.
Question No. 1
Reader George D. writes in asking about the current stake of pot stocks and if the volatility will continue?
He also asks what we think about the future of CBDs as a viable pot play.
Ray Blanco: Pot’s volatile and in general has been in a downtrend since late March or so. It depends on what EPS or index you look at. Fortunately, companies with strong fundamentals have been able to buck this losing trend, and its those companies we will focus on.
CBD plays are tricky due to some unique headwinds, especially here in the U.S. But leading CBD producers have a lot of opportunities to mature and grow. You’ve got hemp now legal here in U.S. which is a major CBD source.
Plus, major chain stores like CVS and Kroger are lining up to buy CBD products. Then you have the potential for online sales on top of that. CBD looks like it will be a lucrative side bet on the larger pot industry.
Question No. 2
Reader Lou writes in:
“CGC recently made a change at the top. What’s going on? What’s making you bullish about Canopy right now?”
Ray Blanco: First and foremost, the stock is dirt cheap right now.
Regarding the dismissal of Brice Linton it could be the right move in the long run.
Yes, Linton is the guy who founded the company and sold the first gram of legal pot in Canada. Yes he built CGC from the ground up, from zero to $20 billion to market cap.
But Constellation Brands now has a major stake and rumor has it they flat out did not like Linton in a leadership role. And perhaps they were right.
The kind of guy that can run a startup is not necessarily the kind of guy you want running a mature company.
It’s a different skill set, different mindset, different everything. You’re dealing with public shareholders and big money institutions like Constellation.
We’ll have to wait and see how this plays out, but it could be a good thing for CGC in the long run.
Question No. 3
Reader Paul writes in asking, what we “think about the state of 5G right now and what are our best targets.”
Ray Blanco: I like 5G. I think we’re going to start seeing spending ramp up. Infrastructure spending is going to be great for 5G companies. We’re going to see telecommunication companies that have previously sat on the sidelines the last few years, start spending a lot more on upgrades. Just trying to maintain a good return for their shareholders… I think we’re getting into a part of the cycle where these companies really start scaling out 5G, not just with pilots programs, but big upgrades in parallel with their current 4G networks.
Company’s I like, Cisco Systems (NASDAQ: CSCO) is certainly one. And after some a drop in share value it’s right back in the “buy zone.”
We’ve also have American Tower Corp. (NYSE: AMT). This a great play with no downside related to China in terms of 5G.
What does AMT? They own, operate and maintain cell towers all over the place. They lease them to the telecommunications company. They’re basically a shared infrastructure provider and they’re going to do really well with 5G.
They’re also a 100% domestic play and again, you’re going to get a nice dividend, just shy of 2%.
I’ll have more on this soon. And thanks again for joining me with our special Tech Profits Q&A session.
We’ll be doing this again soon. And remember, send your questions to me at firstname.lastname@example.org. Your question could end up in an upcoming issue!
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