Best risky stocks to buy

Best risky stocks to buy

Posted: manager07 Date of post: 23.05.2017
best risky stocks to buy

Founded in by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. The stock market is already risky business, but it's even more risky when you're talking about emerging markets, such as the burgeoning marijuana marketplace.

Marijuana legalization offers significant tailwinds for marijuana stocks, but not all marijuana stocks will be winners. In fact, many marijuana stocks are likely to be losers, especially those that trade over the counter, where oversight is lax.

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GWPHAphria, Inc. Read on to see how I'm currently ranking these three stocks on the risk spectrum. It's tempting to invest in marijuana growers and dispensary stocks, but a better idea may be to focus on "backdoor" marijuana companies that benefit from growing awareness of marijuana's benefits without the risk of falling into the crosshairs of U.

Attorney General Jeff Sessions, who has historically been an adversary of legalization. One of my favorite backdoor marijuana stocks is GW Pharmaceuticals. It's working on marijuana medicine that could win FDA approval, and that blessing could allow it to rack up big sales and profit while sidestepping any future federal crackdown on marijuana dispensaries.

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GW Pharmaceuticals is developing medicines based on marijuana's chemical cannabinoids, and it appears to be on the cusp of winning an FDA green light for its CBD-based anti-epileptic drug, Epidiolex. Management is putting together its application for Epidiolex's FDA approval, and if regulators agree it can play an important role in treating epilepsy, then this drug could become a top-selling medicine. Industry watchers' peak sales estimates for the drug vary, but pessimistic views still target it as a nine-figure opportunity.

If Epidiolex's sales end up anywhere near there, then this company has a good shot at turning a handsome profit for investors. Of course, there's no guarantee that the FDA will approve Epidiolex or that doctors will prescribe it.

8 Risky Stocks That Are Worth the Risk

Furthermore, Epidiolex will compete with CBD-heavy strains of marijuana sold at medical-marijuana dispensaries, so this is far from a risk-free investment. Another way to avoid stocks that could run afoul of the U. One Canadian marijuana stock worth considering is Aphria, Inc. I think there are three big reasons why it might pay-off to buy Aphria's shares. First, Zimbabwe stock exchange current share prices already making money serving the medical marijuana market.

Second, its modern facilities mean it has some of the lowest-cost production in the industry. Undeniably, increased investments in production, distribution, and marketing, as well as future dilutive stock offerings, learn stock markets basics take a toll on earnings, but I think the opportunity for recreational marijuana in Canada is big enough to offset some of this risk, and the right management is in place to execute on this opportunity.

Insys Therapeutics already sells Subsys, which is one of the most prescribed fentanyl painkillers on the market. The company is also debt-free and profitable. So why is this stock a "most risky" marijuana investment?

It's been steeped in controversy sincewhen news began swirling of investigations into the company's marketing of Subsys.

best risky stocks to buy

Since then, the company's president has been replaced twice, and former sales executives have been arrested. To make matters worse, investigations that could result in costly settlements are ongoing. Insys has also been weighed down by declining demand for Subsys over growing worry of opiate abuse.

The company's struggles best risky stocks to buy taken a lot of the shine off what could otherwise be an intriguing marijuana story. Insys is launching a reformulation of the long-standing THC drug Marinol, and that drug, Syndros, could have nine-figure sales potential because it's more easily dose-adjusted.

The company has also said it's working on its own CBD therapies for epilepsy that could eventually allow it to compete against GW Pharmaceuticals.

Overall, Insys Therapeutics' marijuana catalysts make it an intriguing stock, but the Subsys overhang makes this company's future quite uncertain. If Insys Therapeutics can put the Subsys saga behind it, then this stock becomes less risky, but until then, it remains a case of "buyer beware. Todd Campbell has no position in any stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Todd has been helping buy side portfolio managers as an independent researcher for over a decade. InTodd founded E.

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