It’s Time to Scale into Tilray Stock

Monday, March 15, 2021 | Jea Yu
It’s Time to Scale into Tilray Stock Medical and consumer cannabis producer Tilray (NASDAQ: TLRY) stock has been an absolute rollercoaster in 2021 triggering a GameStop (NYSEL GME) like short squeeze rocketing shares up to $67 highs on Feb. 10, 2021, before plummeting down to $18.23 lows on Mar. 5, 2021. The state-by-state legalization of cannabis continues to gain momentum as states weigh the potential tax revenue windfalls. Democratic Senators are pressing for an end to the federal prohibition of marijuana in 2021. Cannabis stocks are similar to digital sportsbook and iGaming stocks in that their main catalysts are driven by state-by-state legalization. The regulatory tailwinds favor more legalization for marijuana providing a rising runway for shares of Tilray and its peers, especially after the merger with Aphria (NYSE: APHA). Prudent investors seeking exposure in an inevitable trend can monitor shares of Tilray for opportunistic pullbacks to consider scaling into positions. 

Q4 FY 2020 Earnings Release

On Feb. 17, 2021, Tilray reported an adjusted earnings-per-share (EPS) loss of (-$0.02), beating consensus analyst estimates for EPS loss of (-$0.13), by $0.11. Revenues rose 20.5% year-over-year (YOY) to $56.56 million, beating estimates for $54.82 million. Cannabis segment revenues increased 46% YoY driven by internal medical sales  and Canadian Adult-Use sales. Hemp segment revenues fell (-19%) due to shift to private label product with a large customer and the effects of COVID-19. Full-year 2020 revenues grew 26% to $210.5 million YoY. The combined merger with Aphria is expected to close in Q2 2021 to create the world’s largest cannabis company by pro forma revenue. The Company reduced costs by $57 million on an annualized basis in 2020. The Company ended 2020 with $189.7 million. As of Feb. 16, 2021, Tilray had $261.3 million in cash.

Conference Call Takeaways

Tilray CEO, Brendan Kennedy, underscored, “We are the first GMP certified medical cannabis producer in North America, one of the first producers to be licensed by Health Canada for medical and adult-use production and distribution.” Regarding the Aphria merger, “The combined company will have a portfolio of carefully curated and complementary brands in every major cannabis category, including flower, pre-roll, oils, capsules, vape edibles, and beverages, and across all consumer segments, economies, value, core, mainstream, and premium. We will also have a leading Canada Adult Use retail market share of approximately 17%, which is roughly 700 basis points higher than the next closest competitor.” The combined companies will generate CAD$100 million pretax synergies. The European EU GMP production facility and Freest German Medical distribution footprint will reach over 13,000 pharmacies. The merged company will leverage their two leading consumer brands SweetWater’s hard seltzers, craft beers and beverages with Manitoba Harvest’s hemp and wellness products in the CBD and THC spaces as regulation permits.

U.S. Legislation  

The U.S. currently has 16 states that have legalized both leisure and medical use of cannabis with 26 states permitting medical use and two states decriminalizing marijuana. However, many of these approved states are still awaiting final legislation and regulations which may be a year or more away. Nonetheless, shares of Tilray are very reactive each step of the way as evidenced by the price spikes on the potential decriminalization in Alaska and a review for legalization in New York in March 2021. Internationally, Tilray medical cannabis products are now available to patients in 17 countries.

<><> insert TLRY-chart1-labelled graphic <><>

 TLRY Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a more precision near-term perspective of the landscape for TLRY stock. The weekly rifle chart is trying to maintain its uptrend as the 5-period moving average (MA) support at $26.35 tries to deflect pullbacks. The weekly stochastic peaked and reversed back down sharply due to the parabolic short-squeeze to and the collapse off the $67.17  Fibonacci (fib) level. While the pullbacks formed a weekly market structure low (MSL) buy trigger above $29.44, it also formed a daily market structure high (MSH) sell trigger at the $31.22 breakdown. It’s worth noting how powerful that $29.44 resistance was as it deflected break attempts twice in March. The daily rifle chart is attempting to breakout as the daily 5-period MA at $25.34 crosses up through the 15-period MA at $25.04 targeting the $34.40 upper daily Bollinger Bands (BBs) pending a successful breakout through the daily MSL and weekly MSH triggers. Risk-tolerant investors and nimble traders can monitor for opportunistic pullback price levels at the $25.46 fib, $24.51 sticky 5s zone, $23.42 fib, $22.61 fib, $21.41 fib, $20.10 fib, and $18.57 fib. The higher priced fibs are strong reversion levels for traders while investors can look to scale into a position with a pyramid style dollar-cost averaging strategy. Keep an eye on peers Canopy Growth (NASDAQ: CGC) and Grow Generation (NASDAQ: GRWG) as they tend to move as a group. Upside trajectories range from the $34.40 daily upper BBs up towards the $60.85 fib.  

It’s Time to Scale into Tilray Stock

Featured Article: The role of implied volatility with call option volume



7 Undervalued Stocks That Deserve More Attention

With the Dow Jones Industrial Average (DJIA) hitting new highs seemingly every day, it may seem like the wrong time to be looking at undervalued stocks. Or is it?

From cannabis to cryptocurrencies, and let’s not forget electric vehicles the market seems to be blowing bubbles wherever you look. And that’s why now may be exactly the right time to zig while the market is sagging. And that means looking for undervalued stocks.

But finding undervalued stocks is subjective. Some analysts use specific fundamental metrics. Others use technical analysis.

However, the general idea is that you’re looking for stocks that are trading below their fair value.

In some cases, these may be stocks whose financials are stronger than other stocks in their sector, but it’s trading at a lower price. In other cases, a company may have potential that is not reflected in its stock price. Put another way, undervalued stocks are stocks that have room to grow. That’s why they deserve a place in your portfolio.

And that’s why we’ve put together this special presentation on stocks that are undervalued right at this time. An investment in these companies is likely to be rewarded because the stocks are moving under the radar from the broader market.

View the "7 Undervalued Stocks That Deserve More Attention".


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Tilray (TLRY)1.0$18.32+6.6%N/A-4.04Hold$18.31
Compare These Stocks  Add These Stocks to My Watchlist 

MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security. Learn more.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research. As a bonus to opt-ing into our email newsletters, you will also get a free subscription to the Liberty Through Wealth e-newsletter. You can opt out at any time.