RE:The Globe and Mail had two items for OGI in newsPUNJABI wrote: BMO had downgraded OGI to sell with a target $2.00 before the BAT deal. BMO had it wrong because BAT a large multinational organization paid almost double for the shares of the company. The analyst should know better and also account for the market sentiments about the sector. They are using fundamentals and the current earnings. They need to compare the valuation of other stocks in the sector too. Their call should be for the entire sector. Fundamentals are important but market sentiments and momentum are important too and determine where the share prices will trade. The entire stock market is inflated.
1. Globe says tobacco giant BAT buys 20% of Organigram
Organigram Holdings Inc (C:OGI)
Shares Issued 232,270,534
Last Close 3/11/2021 $5.07
Friday March 12 2021 - In the News
The Globe and Mail reports in its Friday edition that Organigram shares soared 40 per cent Thursday on news that British American Tobacco PLC had poured $221-million into the Moncton company, taking a 20-per-cent share and two board seats. The Globe's Vanmala Subramaniam writes that the British tobacco giant's all-stock investment will see it purchase 58.3 million Organigram shares at $3.79 each. The deal also includes a product development collaboration that will see Organigram and British American (BAT) set up a facility in Moncton that will focus on developing a new line of cannabis vaping products. Under the terms of the agreement, both companies will have access to each other's current intellectual property, although BAT will own all the intellectual property developed in collaboration with Organigram. This is the fourth major investment made by a large multinational company in the Canadian cannabis industry, and the first significant one since the cannabis industry bubble burst in mid-2019. "In our view BAT selected an excellent partner in OGI," Raymond James analyst Rahul Sarugaser said in a note Thursday, adding that he sees this deal presaging a "flood of investment" from other tobacco and alcohol players.
2. Globe says analyst slaps "sell" on Organigram, Sundial
Organigram Holdings Inc (C:OGI)
Shares Issued 232,270,534
Last Close 3/11/2021 $5.07
Friday March 12 2021 - In the News
The Globe and Mail reports in its Friday edition that wild trading swings in the first few months of 2021 are creating challenges for equity analysts, compelling some to quickly slap sell ratings on overvalued stocks or re-evaluate their financial modelling altogether. The Globe's Vanmala Subramaniam writes that this week, Bank of Montreal cannabis analyst Tamy Chen instituted sell ratings on two companies -- Sundial Growers and Organigram -- citing valuations that had deviated too much from fundamentals. Sundial shares posted a 200-per-cent run-up in early February after Barstool Sports founder Dave Portnoy tweeted that he was "back in $SNDL cos I love the rush." Moments later, he cashed in. "Just sold $sndl. Made a quick 50k. That's how you do it boys," he tweeted. Sundial is trading around $1.30, off its February peak of $2.95 (all figures U.S.). Despite the drop, Ms. Chen recommended that clients sell after placing a target price of 40 cents per share on the stock. She said the company's share price valuation still sits at 28 times her 2022 sales forecast, yet "in terms of top-line momentum, positioning in Canada's recreational market and path to profitability, the fundamentals have not meaningfully changed."
One thing i've learn from trading....Analysts job is not to make you money...they're not putting statements out of the goodness of their hearts...