Tilray (TLRY) Stock: Why it is Climbing Sharply Today & Guides to Buy?
|Shares of cannabis owners are soaring these days. Photo: The Motley Fool|
Tilray (TLRY) and other cannabis stocks today
The stocks of Canadian pot growers have been on a tear since the start of 2021. Much of the excitement has come from news outside the companies' home border, and that's no exception today, as cited by The Motley Fool.
Tilray (TLRY) - was surging 49%. Tilray’s gains also lifted the shares of its pending merger partner, Aphria (NASDAQ: APHA). In December the two firms announced a Canadian cannabis tie-up that would create the biggest marijuana company by revenue.
ETFMG Alternative Harvest ETF (MJ) - the largest cannabis ETF, at last check was climbing 13%
In December, Tilray and Aphria (APHA) - disclosed plans to join forces in an all-stock deal that will create the world’s biggest marijuana production and distribution company.
Canopy Growth (CGC) - as rising 15%, one day after the company posted fiscal third-quarter revenue that beat analysts’ forecasts. The report came amid a recovery in demand for pot and pot-infused drink and vape products, even as the company generated a wider per-share loss.
Aurora Cannabis (ACB) - which is scheduled to report earnings Thursday, was up 16% and Sundial Growers (SNDL) - leaped 41%, reported The Street.
Why is Tilray climbing sharply today?
Much of the excitement has been on the continued trend toward marijuana legalization in the U.S. Most recently, the Virginia state assembly passed legislation to legalize marijuana for adult recreational use.
The process still has more to go before it could be signed into law, but it's another sign of the pendulum swinging in the U.S., where federal legalization would have significant ramifications for Canadian growers. Today's moves also stem from business updates from across the pond in Europe and the U.K.
Moreover, Tilray announced a new distribution agreement with U.K. medical cannabis distributor Grow Pharma. Under the agreement, Tilray's pharmaceutical-grade medical cannabis products will be imported and distributed by Grow Pharma in the U.K. "Regulations are progressing as more and more countries across Europe are recognizing the benefits of medical cannabis," Tilray Europe's managing director, Sascha Mielcarek, said in a statement.
Also this month, Tilray has announced it has exported its first medical cannabis shipment to Spain, and it has received the first and only market authorization for medical cannabis products in Portugal.
This growth is good news for Aphria as well. In December, Aphria and Tilray announced a plan to merge. The combined company would be one of the largest global cannabis companies. Aphria CEO Irwin Simon will lead the combined company after the merger, which is expected to close by the end of the second quarter.
The trend toward the legal use of cannabis is also impacting the smaller OrganiGram. With its market capitalization of just over $1 billion, investors see much potential for increasing returns. Last month the company reported that its fiscal first-quarter 2021 net revenue from Canadian adult recreational use grew 30% compared with the prior-year period, though its overall net revenue decreased.
Is Tilray (TLRY) set for another short squeeze?
In the three months after it went public in June 2018, Tilray share prices shot up over 1,400% reaching $300 per share in September of that year after short-sellers were forced to cover their positions due to its tight float structure and lack of shares available for purchase.
At the time, short interest on Tilray sat at about 33%. Although share prices of Tilray have risen sharply over the last five weeks, the short interest is sitting much higher at approximately 51%.
This hasn’t gone unnoticed by the online trading communities, which have recently targeted Tilray in much the same way they drove up the share prices of companies such as GameStop Corporation (NYSE: GME) and AMC Entertainment Holdings Inc. (NYSE: AMC) — two other stocks with high levels of short interest, Yahoo Finance cites.
Its situation has changed over the last year, however, and investors have regained interest in the company.
In the last few months, Tilray has made major announcements, including its plans to merge with Aphria (NASDAQ: APHA) to become the largest cannabis producer in the world.
Although retail investors can take the credit for Tilray’s last big squeeze, the next one could be brought on by institutional investors who might hop on board if banks gain the ability to access cannabis companies through the passage of the MORE Act.
How to buy Tilray (TLRY) Stocks?
Back in 2018, Canada became the first G7 nation to legalize adult-use recreational cannabis. A once-illegal market transitioned to a legal (and therefore taxable) one. You can’t get more transformative than converting a $0 market to a potentially multi-billion-dollar sector, according to Benzinga.
However, what was great news for the cannabis industry wasn’t exactly a bonanza for individual cannabis investments like TLRY stock. TLRY stock crashed sharply in late October 2018 and has continued to trend bearishly until late last year. While the narrative has undoubtedly shifted bullishly for Tilray, you’ll want to be careful in how you approach its shares.
Step 1: Pick a brokerage.
You don’t need to be an investment expert to know that you need to pick a broker before buying TLRY stock. But determining the best brokers is a complicated topic because this isn’t a one-size-fits-all concept.
Typically, younger investors eschew complexity for convenience. Fortunately, there’s never been a better time to invest, no matter your demographic category. Thanks to rising competition, many online brokerages offer easy-to-access platforms with near-standard benefits like commission-free trading. Mobile trading apps like Robinhood allow on-the-go transactions, a key advantage for Millennial and Generation Z investors.
Research which brokerage is most appropriate choice for you. While some brokers cater to quick-and-easy trading, others are far more complex, opening the full spectrum of investment vehicles.
Step 2: Decide how many shares you want.
If this is your first rodeo, you should know that the stock market conducts transactions based on share count and not dollar value. If you wish to purchase a certain dollar value of a particular stock, you must convert from dollars to shares.
Fortunately, this is an easy process. Simply take the total amount you wish to spend and divide that by the market price of your target stock. For example, if you want to invest $1,000 in TLRY stock, you will be able to purchase 23 whole units ($1,000 / $42.35 = 23.61).
Keep in mind that some brokerages will allow you to acquire fractional shares so that you may be able to receive the full value of shares for your spending amount. However, fractional ownership is not a standard feature so be sure to include this in your brokerage search criteria.
Step 3: Choose your order type.
When you purchase a product at a grocery store, you expect to pay the listed price. However, in the market, the price almost always changes. Therefore, you must be aware of the nuances of stock transactions and terminology. Learn more about must-know concepts:
Bid: The bid is the highest price an investor will pay for a stock and is always lower than the ask.
Ask: In contrast, the ask is the minimum price a seller will accept and is always higher than the bid.
Spread: This is the difference between the bid and ask price. As an investor, you are speculating that the price of your target stock will rise after your acquisition. In contrast, market makers make their money by the difference of their stock acquisition price and the price they sell that stock to you.
Limit order: A limit order is a specific price in which you wish to buy or sell a stock. The transaction will only go through exactly at your pre-determined price, which is huge for transparency. However, there is no guarantee that the stock will reach that specified price.
Market order: A market order is a request to buy or sell a stock at the next available price. If you place a market order inside normal session hours, it’s guaranteed to execute, delivering peace of mind. On the other hand, this is the least advantageous order type as your buy order will occur at the ask price (and your sell order on the bid price).
Stop-loss order: A safety net for your portfolio, a stop-loss order exits you out of a position if a specified price is reached or breached. This way, you can avoid a catastrophic loss in case of extreme volatility. However, if the stock price gaps down between sessions, you may end up selling your holdings at a far lower price than desired.
Stop-limit order: Similar to a stop-loss order, the key difference is that a stop-limit order will execute only at a specific price. Therefore, if a reaction rally occurs following a severe gap down, a stop-limit order will exit your position if the target stock reaches your price threshold. As with limit orders, there’s no guarantee that the stock will reach that threshold.
Step 4: Execute your trade.
Order types truly earn their keep when it comes to wild trades like TLRY stock. If shares happen to be flying a particular day and you absolutely desire to get in, the market order is your best friend as it guarantees you a position (albeit at an unfavorable rate).
However, if you know which price is your maximum acceptable level, then the limit order is appropriate.
Four stocks which are moving on Wall Street
We want you to look at Globalstar (NYSEAMERICAN: GSAT), the satellite communications company, which has broken out and gone from $1.22 to hit a peak of $2.14. We had it in pre-market trading at $2.08 but still up over 60% on trading in the US yesterday, The Armchair Trader cites.
New options on Globalstar became available on 2 February and it is notable that there is a call contract with a $3 strike price which is attracting interest in some quarters. We are seeing a lot of investor interest on Globalstar with little to zero news flow coming out of the company, which either means there is something leaking out, or there is forum-driven retail activity.
We saw steady buying through most of the day Tuesday on Globalstar stock with some profit-taking throughout, but this one looks like it has some momentum.
Next up is Twitter Inc (NYSE: TWTR) which we all known and love. The stock has been on a drive since mid-January when it hit a dip at around 45 bucks. It is now pushing the 60 dollar mark. There has been steady buying of Twitter since then. It has set a new six month high and is also trading at a 52 week high.
Twitter reported fourth-quarter revenues and adjusted profits which beat Wall Street forecasts. The daily user count fell short of estimates though. The price has been closing well above its 20-day moving average, so we anticipate some fierce profit taking if there is any bad news that emerges on Twitter in the near future – e.g. a Congressional probe into social media. But there is a lot of love out there for Twitter on Wall Street right now. This thing could go even higher on the back of $222m fourth-quarter profits.
Tilray (LON:0Z6Y / NASDAQ: TLRY)
Tilray (NASDAQ: TLRY) is a cannabis stock and cannabis is a hot sector right now in the US and has been since Joe Biden won the election back in November. Tilray has been on a run with US investors since the start of the week. Excitement surrounds a deal by Tilray to export medical marijuana to the UK. Tilray merged with Aphria to create the world’s biggest cannabis company and now says it expects to have cannabis products on the UK medical market by March.
Cannabis exports to Europe are going to be a big part of the sector’s story as well this year – we have already seen shares in hemp products and medical CBD specialist HempFusion head skywards yesterday, as the company is also exporting to the European market and has the appropriate EU certifications in place.
Sundial Growers Inc (SNDL)
Cannabis seems to be in danger of becoming the wave that lifts all ships, but investors are also piling into Sundial Growers Inc (NASDAQ: SNDL). Most of the share price action came on Friday, but there are still a LOT of investors following this one. The stock price seems to have settled at a new level of $1.64.
Take a step back to August 2019 and Sundial Growers was trading at $11.50. That’s a long way from where it now but it is now trading in a bigger, more mature, and sophisticated market and with most Americans backing legalization.
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