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Motley Fool Article: 5 Of The Cheapest Pot Stocks Under $5

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But as is often the case, the best long-term investments aren’t the companies with the largest market caps. Rather, it’s the potentially undiscovered gems in the marijuana industry that are small caps or hovering well below Wall Street’s radar that are liable to deliver the strongest long-term gains. Using the most basic fundamental metric of all, the forward price-to-earnings (P/E) ratio, I screened for the cheapest pot stocks currently trading for less than $5 a share. Ultimately, five emerged as having a lower forward P/E ratio than the broad-based S&P 500, despite a considerably faster long-term growth rate.


Valens GroWorks: Forward P/E ratio of 8.7

Don’t be fooled by its $2.21 share price. Valens GroWorks () intends to be a big-time player in the extraction-services industry. And at less than nine times forward earnings per share, it’s the cheapest cannabis stock trading for less than $5 per share (and perhaps throughout the entire industry, regardless of share price).

What makes the extraction-services industry so intriguing is the fact that Canada is set to launch derivative products by mid-December. Derivatives being nondried flower product, such as edibles, vapes, infused beverages, topicals, and concentrates. All of these derivatives require processing from cannabis and/or hemp biomass, which is where Valens GroWorks comes into play. It’s becoming the go-to middleman for pot growers desperate to bolster their margins.

For its part, Valens GroWorks has snagged two deals of significance. It landed an 80,000 kilo-in-aggregate processing deal with HEXO in April that’ll span two years, and recently expanded its existing agreement with Tilray to include 125,000 kilos-in-aggregate of annual processing. With the company expected to push its annual processing capacity to 1 million kilos, it’ll soon have a mountain of predictable cash flow headed its way.

Source: https://cannabislaw.report/motley-fool-article-5-of-the-cheapest-pot-stocks-under-5/

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