Is Organigram (OGI) A Better Pot Stock To Buy For 2021?
9:50 pm Wednesday, May 19th, 2021
There is no doubt that the cannabis industry has managed to make a bit of a rebound this year so far and investors are again looking at the possibility of investing in some stocks from that sector.
One of the stocks that must have come into focus among many investors at the start of the year is Organigram Holdings (NASDAQ:OGI). However, over the course of the past month, the stock has performed poorland recorded declines of as much as 33%. While it is true that many the coronavirus related lockdowns in Canada had impacted the business of most cannabis companies in the first quarter of 2021, Organigram’s problems go beyond that.
The first thing for investors to remember is that Organigram has delivered dreadful financial results in the second fiscal quarter that ended on February 28, 2021. The company’s net revenues collapsed to C$14.64 million, which reflects a drop of as much as 37% year on year. In this regard, it should be noted that during the course of the past year Organigram launched as many as 62 new products.
However, that could not bring about a boost to the company’s sales performance. On the other hand, the gross losses for the quarter came in at C$17.195 million, which is a significant reversal from the gross loss of C$11.288 in the year ago period.
Considering the poor financial performance and the decline in the stock price, it is important for investors to consider if Organigram can actually make a comeback.
At this point in time, the company’s losses are nose diving and the losses are rising as well and unfortunately, there has been no indication that a turnaround might be around the corner. While it is true that the sector is expected to grow in the near future, it might be a good idea for investors to sit on the sidelines when it comes to the Organigram stock.
