The Australian Cannabis Index includes around 17 ASX cannabis stocks. LSH does not qualify because it does not satisfy the criteria that a stock should average $50,000 in daily turnover.
What follows will compare LSH with these 17 stocks and why I maintain LSH has got the biggest upside if management can execute on their stated plans.
1 year return:
- CPH +333%
- IHL +289%
- LSH +167%
- LGP +149%
- ECS +143%
6 month return:
- IHL +70%
- IDT +67%
- MXC +52%
- LGP +47%
- LSH +24%
Market Capital:
- IHL $283 million
- EOF $266 million
- LGP $155 million
- CPH $148 million
- CAN $109 million
Last: LSH $16 millionLowest Shares on Issue:
- BDA 105 million
- LSH 168 million
- LGP 178 million
- IDT 239 million
- AGH 262 million
In recent times, LSH has performed admirably amongst its peers, placing top 5 in the 1 year and 2021 YTD returns. Notably, IHL & LGP were the only others to make both lists for gains.
Nevertheless, the most important thing is future outlook.
I believe LSH has the most promising future of any cannabis stock on the ASX. LSH are not a grower and are therefore not overly dependent on the weather or commodity prices. LSH has a simple business model where they sell a vaporizer and gain a clip of the ticket on recurring sales of the sealed vaping pods, which are designed for LSH’s exclusively licensed vaporizer.
Modern science strongly suggests vaping is the most effective way of getting the desired effect from cannabis consumption. Imho vaping cannabis is a market primed to take off in Australia on a very long and high growth trajectory and its day 1.
I realize one could argue that any of these other 17 companies can enter the market and compete. Possibly but vaporizers and e-liquids are not part their core business. They would need to start from scratch.
More importantly, the LSH register includes Cannvalate (number 1 shareholder) who have come on board in the last 12 months or so, so I’m very confident which vaporizer and e-liquid pods they are likely to prescribe with their 30-40% market share.
With that in mind, LSH’s powerful combination of low capitalization (last place) and shares on issue (2
nd lowest) will provide a powerful updraft if management can execute on their stated goals. With the suitably experienced and impressive Matthew Golden in the pilot seat, LSH has a very real chance of succeeding.
Based on all of the above, I believe LSH offers the best high risk high reward of any cannabis stock on the ASX. For full disclosure, it’s my only cannabis stock.
Happy to be corrected if any information included here is incorrect. Always DYOR.
GLTAH
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