jefra: Let me add a little more to your thinking here.
Wall Street is paying attention!!
“Until recently, cannabis stocks were mostly ignored by most Wall Street firms. Few analysts covered or discussed cannabis stocks, and few investors paid attention to them at all. However, that dynamic has changed dramatically in the past year. Big-name firms like Jefferies, Cowen, Piper Jaffray have all initiated coverage of cannabis stocks. According to CNN, 13 different analysts now cover Canopy alone, up from eight analysts back in August. The more analysts cover cannabis stocks, the more comfortable investors will become and the more “buy” initiations will drive share prices higher.”
As is often the case, most retail (and definitely most traders) use a spotlight strategy to evaluate their investments. Only a few, such as yourself, jefra, use a floodlight. (how man hundreds if not 1000s of hours have you alone put into researching this company and space?) In this regard, few legitimate analysts cover OTC companies. Having a firm like Roth Capital Partners put out a buy rating validates our own “floodlight” DD and understanding of CVSI as a “growth play.” Just wait until we’re on Nasdaq when these firms actually give us “research reports” in addition to those buy ratings.
I’ll bet most retail investors aren’t aware of the process involved in an analysts buy rating.
Analysts research public financial statements, listen in on conference calls, TALK WITH MANAGEMENT and even talk with retailers and the customers of a company’s product (although I doubt Scott Fortune of Roth Capital went that far).
I do know that Scott Fortune has researched the Cannabis space extensively so his buy rating isn’t a manipulative sales tool. His rating is the result of reasoned and objective analysis - he’s an experienced professional. It takes a lot of time and effort to analyze a company and to develop and maintain forecasts as you so well know. And, while different analysts may arrive at different conclusions, their ratings are efficient in summarizing their efforts. However, it’s also important to point out that a rating is one person's perspective, and it will not apply to every investor.
Should an investor interested in investing in CVSI react accordingly to new analyst's recommendations and adjust a position based on the analyst's rating alone? Of course not. The buy rating and/or research report and subsequent ratings should be used to complement an individual’s homework and strategy. Just remember, ratings, like stock prices, can be manipulated by unscrupulous people, and have been for a long time. And just because a few analysts have been dishonest does not mean that all analysts are. Their assumptions may turn out to be wrong, but this does not mean that they did not do their best to provide investors with thorough and independent analysis. I trust Mr. Fortune is legit (and his last name certainly bodes well for my increased fortunes in CVSI!) :-)
Many of us here did extensive homework years ago. And that homework never stopped. As the company executed their plan and grew, we continued to analyze all aspects of the company, their customers, the sector, the politics, etc. We currently have two buy ratings. This is just the beginning!
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