Sundial Growers Inc (NASDAQ: SNDL) is having a tough time in the market today, down more than 10% and following up on the more than 4% declines yesterday. However, if you’ve ever wanted a dip to buy, this is it! Here’s why:
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SNDL Stock Dips… This Is An Opportunity!
As mentioned above, Sundial Growers is falling in the market this morning, adding to the losses the stock experienced yesterday. With the heavy recent declines, investors are getting worried. However, I’m here to tell you that there’s nothing to worry about.
First and foremost, it’s important to keep in mind that SNDL stock has been on a tear for the top for some time. Over the past month, the stock went from $0.17 to more than $0.70. So, it’s natural for profit taking to take place at these levels. If you’ve made hundreds of percent gains on your money, wouldn’t you want to tap into it?
Nonetheless, there’s still plenty of opportunity for growth here.
As with several other companies, COVID-19 has been a painful reality for SNDL. In fact, it has been so painful that the company announced a strategic alternatives exploration in an attempt to return value to investors. Of course, this strategic alternatives exploration involves the potential sale of the company.
That’s exciting news, especially considering the times.
Recently, Joe Biden won the United States Presidential Election, and early next year, he will move into the White House as the President of the United States. That’s great news for the cannabis sector as a whole. Republicans have been pretty bad for the sector historically. However, Joe Biden is a democrat.
Moreover, Biden has several big, expensive plans. In fact, he plans on raising taxes on those who earn more than $400,000 per year in order to cover the costs of some of his goals. But that’s not going to be enough. One thing that could help in a major way is the legalization of cannabis for adult use.
Multiple states across the Union have legalized cannabis, and seen incredible tax income as a result. Should cannabis be legalized on a federal levle, it will give the federal government an opportunity to tap into this honey pot.
So, now is the time for the big companies to start looking for smaller players to acquire.
Sundial Growers Is In The Perfect Position To Be Snapped Up
Ultimately, if there ever was a perfect acquisition target in the cannabis space, Sundial Growers is it. Due to the COVID-19 struggles, the stock is trading at a tremendous discount, even after the dramatic run we’ve seen in the past month. As a result, should a large company act quickly, it can get a price that’s hard to ignore to acquire the company.
Moreover, SNDL has made changes that make it more appealing as an acquisition target. In particular, the company has been moving away from dried cannabis flower and toward vape products. Vapes are the hot new thing in the cannabis industry, and the company’s role in the vape subsector will likely increase its appeal for potential suitors.
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The Bottom Line
The bottom line is simple. Recent declines seen from SNDL stock are nothing new. The dip is the result of profit taking, which is completely natural.
However, in the short-to-mid-term, SNDL stock may offer an incredible opportunity. With the time being right for a major cannabis acquisition, and the company exploring strategic alternatives, it only makes sense that a deal is likely to come down the line.
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