Is Tilray Stock a Solid Long Term Investment?


When you’re thinking about types of stocks to purchase for long-term performance, you might want to think about things that are not likely to go out of style. It’s tempting to invest in the latest tech company or to get involved in something that caters to a niche market that you and you alone care about. The problem with these types of impulses is that they can cost you a lot of money in the end. Even if the stock is the hot ticket in town right now, that doesn’t mean that it’s going to be that way six months down the line. It doesn’t even mean that it will still be performing well three months into the future, much less in the long term. The truth of the matter is that if you want something that is capable of performing for a long time (and netting you a big payday in the process), you need to think about something that a lot of people are interested in. That keeps the company’s profits going strong, which in turn keeps the stock up. That’s one reason why you may want to look at cannabis company Tilray. Traded publicly as TLRY, they already have one very important thing going for them. They’re selling a product that a lot of people want. Furthermore, it’s highly likely that their customer base is only going to continue to grow in the future. If you’re intrigued, then perhaps it’s time to learn more about them.

A Mixed Bag

When you look at the performance for this company during both the last quarter and throughout the last year, you get something of a mixed bag. In fact, it can be somewhat confusing about whether or not they’re worth purchasing as a long-term stock, at least on the surface. For example, they made more money than they did this time last year, but they didn’t make quite as much as they did during the last quarter. Does that mean that there is cause for concern? Some people will probably think that this is exactly what it means, but it could mean a lot of things. In order to gain a better understanding, you have to take each one of these things and disseminate them one by one. For starters, they recently acquired another company called Aphria. Obviously, that’s going to have an impact on their profits because there is always an adjustment period after you acquire another business. Since they just acquired it last year, it’s obvious that they are still in their infancy with this new acquisition. As a matter of fact, when they acquired that particular company there was a whole pharma distribution sector that they had never been involved with before. That particular department is now making more money than they were making originally.

In order to better understand that, you have to look at the numbers. So far this year, the company has reported net sales of slightly more than $150 million. The thing that’s causing so much angst among investors is the fact that they had projected sales of just over $170 million, meaning that they are definitely off the mark from where they thought they would be by this time. Obviously, that caused shares to decrease, although they didn’t really take the tumble like you might have expected. The more interesting thing is that those same shares turned around and went right back up. At the moment, they’re actually up by 14%. What does all this really mean? In short, it means that the company has experienced a very small rough patch, like every other company is going to experience at one time or another on the stock market. Perhaps instead of focusing on the fact that they haven’t quite met projected sales or that their stock took the tiniest of tumbles for a very short amount of time, you should be focusing on the fact that it rebounded and is now performing better than it was before it went down. If you’re still not convinced, then maybe it’s time to analyze things a little more.

The Last Six Months

If you look at this particular market as a whole over the course of the last six months, then you will likely notice that the entire cannabis market has actually gained momentum to the tune of about 14%. The thing that has a lot of investors concerned is that during the same time, Tilray’s stock actually lost ground by as much as 30%. That is the main thing that has so many people concerned. During a time when the entire industry is growing, this particular company seems to be going in the opposite direction. Up until then, it was believed to be one of the main companies in the industry. In fact, if you take things back a little further and look into the company’s history for the last 12 months, you’ll see that they were an outstanding performer during almost every quarter. They then acquired another company, as previously mentioned, and things started to get a little more turbulent. This has made a lot of individuals worry about purchasing the stock, especially as a long-term option. Others fully believe that they will not only rebound stronger than ever (as they already have, at least for now), but that they will also continue to gain strength in the future. One reason that this is suspected is because the company, based in Canada, plans on increasing their operations in the United States. Considering that this is a country that is still struggling to find its own way when it comes to cannabis sales, there is a lot of hope that the expansion into the US might come at just the right time when customers are looking for a company to utilize in order to get the product they need, all before there is too much competition to muddy the waters.

The Views of Some Stock Market Experts

Not surprisingly, the view of some stock market experts is that no one in their right mind would purchase this particular stock right now, especially not as a long-term option. The fact that the stock has been volatile in the last six months is a problem for a lot of individuals. Sure, the company has a decent explanation in the fact that they acquired another corporation and they’re adjusting things as they go, not to mention that they’re expanding into another market in a different country. However, there are plenty of stock market experts that just aren’t convinced that there isn’t something more going on, especially when you consider the fact that over the course of the last six months, they have performed far worse than expected while the rest of their industry has continued to grow. If you want to quantify that into something that you can look at in numbers, consider the fact that their stock dropped 30% over the course of the last six months while everyone else in the industry was experiencing almost a 15% growth. When you look at things in that context, they’re almost as much as 50% off the mark. The fact that they’re almost $20 million behind their projected income for this particular quarter is definitely something worth being concerned about as well. Does it mean that you should run away as fast as you can or does it mean that you should go ahead and invest, but with caution?

The Opposing View

This is one of those times when stock market experts are definitely not in agreement over whether or not you should purchase this stock or leave it alone. Many of them say that you shouldn’t touch it. Others say that you should go ahead and purchase it, while having the full knowledge that you’re probably going to have to hold on to it for far longer than you might choose to hold on to any other potential long-term investment in order to see the payday that you hope to see. That can pose a real issue for buyers because the people that typically give someone advice are so divided on this particular stock. Truth be told, that might potentially be your answer. If you’re looking at individuals who make it their living to analyze the stock market and then provide advice to other people about whether or not they should purchase a particular stock, you’ve probably already figured out that there has to be some added risk involved if everyone is so divided about this particular option. If it was a solid option, more people would be in favor of it. Considering the fact that the stock market is anything but a solid option to begin with, you have to know that you are accepting a certain amount of risk if you decide to make this stock a purchase for a long-term investment. Granted, any investment you make in the stock market comes with its own amount of risk. Even the most solid stocks can underperform. The stock market has completely crashed in the past and it will likely do so again at some point in the future. That said, you may not exactly be in the mood to increase the amount of risk that you’re exposing yourself to by purchasing stock that is not really guaranteed to perform as expected.

Light at the End of the Tunnel?

If you’re not already confused enough, there is a small contingent of stock market experts who believe that the stock will not only continue to recover, but go as much as 40% higher in value than it already is. Obviously, there is a great deal of debate here about whether or not this particular company is capable of holding its own in the future. Perhaps the stock market experts who feel like it is an option better left alone are just being overly cautious. After all, even the most solid companies have quarters that aren’t quite as good as some of the previous ones. This is especially true when they acquire a new company and they’re more or less in the rebuilding phase, trying to find their rhythm with the addition of this new company. On the other hand, there are some experts out there who believe that even though the stock is currently on the rise, the fact that it hasn’t performed especially well over the course of the last six months is just the beginning. According to them, this is the first sign of chinks in the armor signaling a lot of problems to come in the future. The question is, which experts are you supposed to listen to?

Unfortunately, there aren’t any concrete answers. This is something that you probably learned a long time ago. If you’re going to invest in the stock market, you have to accept the fact that there is no such thing as a concrete answer to begin with. It just doesn’t happen. You can invest in things that seem like a sure bet and still lose your shirt. Conversely, you might invest in what seems like the riskiest thing you’ve ever done and make out like a bandit. That’s part of the excitement of investing in the stock market but it’s also a responsibility that you have to recognize. That brings it all down to a personal decision. If you believe this company is capable of outperforming its competition in the future and you have the money to spare, it might be a good idea to go ahead and purchase the stock before it goes up even more. At the moment, it can be purchased for a reasonable price but if it does increase by 40%, that’s not going to be the case much longer. Chances are, you’re going to have to be patient in order to get that big payday you’re hoping for and you have to accept the fact that it may never come at all. As long as you’re willing to take those risks and you can afford to do so financially, this might be something you want to add to your portfolio. Otherwise, there are better options out there for a long-term investment.

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