When I see the profit on the balance sheet, then I become a believer. Lots of cannabis deals happened and so far not one of them have shown a profit (WEED, FIRE, NINE, etc). Doesn't mean it won't happen, but that's the key part of it. People buying up cannabis stocks now are assuming profitability, but it has to reflect on their cash position.
Once you have the positive cash flow building up, your company can do whatever it wants and shareholders benefit. Dividend, Share Buyback, Acquisitions, whatever. It's a great position for a company to be in.
After 15 years I've become somewhat jaded because I have spoken with CEO's and been part of companies where they promised a profit and growth and all these fancy news releases. Then the quarter comes, it's a huge disappointment or some big surprise and your angry. You can call and complain but there's nothing they can do, so it's just a big old let down. Hence why 2014 was the big year for me when I shifted to EPS stocks only.
AXM is an exception as it's EPS + a large scale project coming into fruition. But that EPS part is like an insurance policy. CAF, SSA, and a few others I also have that are strictly cash flow positive. |
