| | | | The Amazon of Weed: One SaaSy Cannabis Stock to Watch
Author: Corey Snyder, Publisher
"It's out, bro… monkey's out of the bottle, man. Pandora doesn't go back in the box, he only comes out..."
- Saul Silver, Pineapple Express (2008)
I'm not a weed guy… never have been, really.
However, growing up in Small Town, Virginia, it's just about impossible to ignore marijuana culture or avoid being around the "green gold" in some way, shape or form…
But who am I kidding? This is America.
There's no getting around it anywhere...
And as for legalization - and to quote marijuana aficionado Sam Cooke - "it's been a long, a long time coming."
Now, I understand investors have their eyes set on companies like Tilray, HEXO Corp., and Aurora Cannabis, but I believe there's another opportunity if they would only shift their focus...
Deals on Wheels
On June 21st earlier this year, a Yahoo Finance headline read, "Weedmaps parent company slumps after SPAC deal."
Surprise, surprise - another post-merger SPAC implosion. But this happens with good companies, too (Talkspace, anyone?).
Since this is the new pattern with blank checks after completing business combinations, it's best to trade the run-up and take your profits elsewhere until things turn higher…
And this is why Weedmaps/WM Technology, Inc. (MAPS) is once again piquing the interest of traders.
"What does Weedmaps do?"
In their words, "WM Technology is the leading technology and software infrastructure provider to the cannabis industry."
Like most corporate speak, this is a broad generalization that, though it sounds good, tells us little about what they do…
I'll take this one.
Weedmaps is a go-to data and SaaS (Software as a Service) company that provides dispensaries and legal marijuana businesses a platform to get products from producer to consumer, compliantly.
Taking it a step further, Weedmaps offers POS (point of sale), delivery, and all-in software as well…
When I originally looked through the investor presentation, what stood out to me was the 55% market share of retail businesses as clients… Businesses have bigger checkbooks.
"Alright, so what's the fascination with a SaaS company in the cannabis industry?"
Well, most folks know Weedmaps for being the "DoorDash of weed." And that's fair… But they connect the business side directly with cannabis users by providing a "Business-in-a-Box."
To be clear, you can download the app and have weed delivered without having to worry about stick-up kids emptying your pockets...
Other companies offer similar services. Still, there's one thing that makes Weedmaps different...
Niche… especially when you're looking at an industry dealing with fragmented regulations and laws all across the country…
When the time comes, someone has to take the lead.
Now, if you're expecting mind blowing fundamentals, you might want to look elsewhere, although they're not exactly horrible.
But with this type of investment, I want to see positive trends…
This is a growth company.
Weedmaps reported Q2 earnings just two weeks ago and the company's momentum is almost palpable…
55% year-over-year increase in revenue… monthly active users up 75%... 24% bump in average monthly revenue per client…
And a bottom line of $16.8 million compared to $9.4 million last year during the same period...
Imagine what happens when Daddy Government gives full permission.
The glaring concern, however, is whether or not Weedmaps will be able to handle it.
This is a question of management. It always is.
The leadership team is made up of former movers at companies like Nike, Goldman Sachs, Twitter, Adobe, Google, Ticketmaster, etc.
I'm name dropping at this point, but it's clear that this isn't anyone's first rodeo...
Now, cannabis has lost some of its luster in recent months as most are well below their 52-week highs.
I'm with you on that...
But if you're playing the long game, Weedmaps is another sort of "infrastructure" trade worth looking at...
Somebody has to deliver the goods.
(I hold no position in MAPS.)
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| | | | | | | Think it's smart to use a stop loss? Think again...
Instead of protecting your account, you might be lining the pockets of your broker. Options Coach Chris Hood and Brian Jones break down why "mental stops" are the way to go
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| | | FINAL PRINTS: The Major Indices Wrap-Up |
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| Index
S&P 500
Dow Jones
NASDAQ
Russell 2000
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| Weekly +/-
+67.70
+335.72
+414.84
+109.55 |
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| % Change
+1.52%
+0.96%
+2.82%
+5.05% |
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| Close
4,450.29
35,455.80
14,778.65
2,277.15
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| % YTD
+20.06%
+15.84%
+17.39%
+15.31%
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| | | MARKET WHISPERS: The Weekend Scoop
- Supernatural Gas - The only gas prices to watch is natural gas, according to commodity futures on Friday. Natural gas jumped to its highest in three years ahead of Hurricane Ida's approach towards the southern border of the U.S. along the Gulf Coast, gaining over 11% in just two days and 13.5% for the week. Shares of companies such as Comstock Resources (CRK) and Range Resources (RRC) gained nearly 10%. Louisiana residents aren't happy, but Comstock Resources shareholders are. Shame.
- Swipe for NFTs - Visa (V) has no dog in the fight between cash and digital assets and it shows with the company's most recent whitepaper. The credit card payment company lauded the NFT (non-fungible token) market as a way for entertainment fans to engage with celebrities and sports teams, stating that professional sports alone missed out on close to $18 billion. So long as folks use Visa, they should capture some nice fees.
- Elon Musk May Have Some Concerns - Rumor has it that Tesla (TSLA) CEO Elon Musk is showing signs of worry after Nvidia Corp (NVDA) announced a $54 billion buyout of Cambridge, England's Arm Ltd., a semiconductor and software company. Nvidia will be waiting for approval by the EU due to possible antitrust concerns, but Musk's concerns are more about competition, according to Reuters. Tesla's leader isn't alone, however, as Amazon (AMZN) and other tech giants have objected to the deal.
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| | | | | Are you up for it?
Rogue Investing publisher Corey Snyder has accepted the challenge to 10x his account in 30 days, starting tomorrow.
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| | | HIT OR MISS: Who's on Deck for Earnings
- Monday, August 30th - Cloudera, Inc. (CLDR), Li Auto Inc. (LI), StoneCo Ltd. (STNE), Zoom Video Communications (ZM), ReneSola (SOL), Catalent, Inc. (CTLT)
- Tuesday, August 31st - Futu Holdings (FUTU), NetEase (NTES), CrowdStrike Holdings Inc. (CRWD), Ambarella Inc. (AMBA), Paycor HCM, Inc. (PYCR), UP Fintech Holding (TIGR), Youdao, Inc. (DAO)
- Wednesday, September 1st - Campbell Soup Co. (CPB), Nutanix (NTNX), Five Below Inc. (FIVE), Okta Inc. (OKTA), Chewy Inc. (CHWY), ChargePoint Holdings Inc. (CHPT), Veeva Systems Inc. (VEEV), Asana Inc. (ASAN)
- Thursday, September 2nd - Signet Jewelers (SIG), American Eagle Outfitters Inc. (AEO), Hormel Foods Corp. (HRL), Docusign Inc. (DOCU), MongoDB Inc. (MDB), Broadcome Inc. (AVGO), Hewlett Packard Enterprise Co. (HPE),
- Friday, September 3rd - Hurco Companies Inc. (HURC)
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