Marijuana Stocks in 2015 - Industry Focus: Healthcare

TL;DR

The analysis discusses marijuana stocks, focusing on GW Pharma and Insys, and their potential opportunities and risks for investors.

Transcript

Michael Douglass: Marijuana stocks in 2015. This is Industry Focus. Hi Fools, healthcare analyst Michael Douglass here today. The topic of the day is going to be marijuana stocks. I’ve got Todd Campbell on hangouts with us, from New Hampshire. Todd, how are you doing? Todd Campbell: I’m doing really well. I remembered to wear my green shirt today. ... Read More

Key Insights

• 🉐 Marijuana stocks gained attention in 2015 due to political developments and potential market size.
• 💱 GW Pharma and Insys are considered investable marijuana stocks due to their wide trading on major exchanges.
• 🛀 GW Pharma's valuation may be a concern for investors, while Insys has shown financial success.
• 🧑‍🏭 Data from clinical trials and FDA approvals are crucial factors for the success of marijuana stocks.
• ✳️ The association with marijuana legalization and stock prices is a risk for investors.
• 👨‍🔬 Thorough research and realistic expectations are necessary for investing in marijuana stocks.
• ❓ The potential growth and opportunities vary between GW Pharma and Insys.

Questions & Answers

Q: What makes GW Pharma an investable marijuana stock?

GW Pharma stands out because it is widely traded on major exchanges, unlike many other marijuana stocks. It has shown promising results in using chemical compounds from marijuana for cancer pain and epilepsy treatment.

Q: Why is GW Pharma's stock run in 2014 a concern for investors?

The significant increase in stock price may have made GW Pharma's valuation too high. Investors worry that any setbacks, like the failure to beat placebo in a Phase III trial, could negatively impact the stock.

Q: What sets Insys apart from GW Pharma?

Insys already generates revenue from its opiate spray, Subsys, used to treat cancer pain. It has financial flexibility, is debt-free, and has the ability to reinvest in marijuana research programs. Insys also has potential opportunities with a new formulation of the marijuana drug Marinol.

Q: What are the concerns with investing in marijuana stocks?

Investors need to approach marijuana stocks with caution and do thorough research. The association with marijuana legalization and the risk of hype affecting stock prices are concerns. Additionally, investing in biotechnology companies comes with high risks, as most drugs fail in clinical trials.

Summary & Key Takeaways

• Marijuana stocks gained attention in 2015 due to key elections addressing medical and recreational marijuana legislation.

• GW Pharma and Insys are the only widely-traded marijuana stocks, with both companies showing a significant return in 2014.

• GW Pharma's stock run has made it pricey, raising concerns about valuation. Insys, on the other hand, is generating revenue and has better financials.