MENU

The Auscann Group Holdings Ltd share price is up 172% in a month: Is the pot stock a buy?

One of the biggest movers on the market today has been the Auscann Group Holdings Ltd (ASX: AC8) share price.

With its shares up 10% to 54.5 cents, AusCann has now seen its share price rise by a staggering 172% since listing on the ASX at the start of February.

What caused the rally?

One of the key catalysts to this incredible rise was the government’s plan to allow medical marijuana companies to distribute cannabis oils and medications in Australia in the very near future.

Furthermore, until sufficient supply is available in Australia, companies will be able to fast-track imports from overseas sources.

Should you invest in AusCann?

Investors certainly have a lot of choice when it comes to pot stocks. The likes of Zelda Therapeutics Ltd (ASX: ZLD) and MMJ Phytotech Ltd (ASX: MMJ) are two other notable companies on the market.

But overall I think AusCann is arguably the best of the lot thanks to its highly experienced and influential management team and its significant ties with Canadian-giant Canopy Growth Corp.

The CAD$1.7 billion market leader has a major shareholding in AusCann and provides it with royalty-free access to its expertise and intellectual property in the cultivation, manufacture, and supply of high-quality medicinal cannabis products.

AusCann will then market these products for the treatment of palliative care symptoms, chemotherapy-induced nausea, treatment-resistant childhood epilepsy, and chronic pain.

Whilst this is all very promising, at the current share price I believe there is a huge amount of growth baked into the AusCann share price.

For this reason I would suggest investors hold off an investment and wait to see if its sales figures end up justifying its market valuation.

Instead of risking your money in pot stocks you could take a look at these incredible growth shares. I'm tipping them for big things in 2017. Are they in your portfolio?

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often full franked..

But knowing which blue chips to buy, and when, can often be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

HOT OFF THE PRESSES: My #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.