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A quick weekly options trade on GrowGeneration stock yields 25% potential profit in 13 minutes!
With an earnings report due Wednesday, and massive expansion continuing, GRWG continues to do well.
Another trade is being
considered – don’t miss out.
Over the last year, GrowGeneration stock has gained a whopping 1,787% and cannabis stocks, in general, received a big boost following the 2020 elections.
After Democrats took control of the White House and Congress, investor sentiment poured into cannabis stocks with the belief that decriminalization and even legalization in the U.S. could be a reality.
GrowGeneration has done a solid job increasing its quarterly topline revenue.
From $7.2 million in July 2018 to $55 million in October 2020, the company has increased that quarterly revenue by 664%.
The company has also pulled its quarterly earnings per share into the green.
In July 2018, the company reported minus-$0.04 per share in earnings.
That has grown to $0.06 per share by October 2020 — that’s a $0.10-per-share turnaround in just two years.
The Catalysts Behind The Trade…..
GrowGeneration will report earnings Wednesday, March 24, after the market closes. The consensus earnings estimate is for $0.06 per share on revenue of $60.89 million; but the Whisper number is a bit higher at $0.07 per share.
Consensus estimates are for year-over-year earnings growth of 700.00% with revenue increasing by 139.87%.
Short interest has decreased by 60.6% and overall earnings estimates have been revised higher since the company's last earnings release. The consensus EPS estimate for the quarter has been revised 11.11% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have collectively reassessed their initial estimates over this period.
For the last reported quarter, it was expected that GrowGeneration would post earnings of $0.06 per share when it actually produced earnings of $0.06, delivering no surprise.
Over the last four quarters, the company has beaten consensus EPS estimates just once.
2. Continued Expansion.....
Marijuana stocks have done well the past year as legalization spreads to more states and more people began growing cannabis at home during the Covid-19 pandemic.
GrowGen agreed to buy Santa Ana, Calif.-based 55 Hydroponics last Tuesday. The acquisition expands GrowGen's retail footprint in California to 18, with nine locations in the key Southern California market, and its overall U.S. locations to 51. Terms of the deal were not disclosed.
"As the dominant hydroponics retailer in Orange County, 55 Hydroponics boasts a devoted customer base, unmatched cultivation expertise, and a vast inventory of top-notch supplies, all of which will help GrowGen better serve Southern California's growers," GrowGen CEO Darren Lampert said in a news release.
The 55 Hydroponics acquisition was GrowGen's sixth this year.
Also, GrowGen announced that it acquired Char Coir, which produces popular hydroponic growing materials made from coconut fiber, to add more than $15 million to its sales this year.
As well, on Monday GrowGeneration said it bought a purchasing platform for commercial cannabis growers, marking its eighth acquisition this year.
The U.S. cannabis-focused retailer said Agron.io has technology that helps growers track inventory and manage operations. Additionally, Agron's platform also offers pricing and shipping data and a large product catalog. It sells a variety of industrial equipment, like lighting and hydroponic supplies via the catalog.
GrowGeneration expects Agron, which began operating in 2016 and is based in Denver, to add $20 million in sales this year.
Meanwhile, the expansion into purchasing technology reflects GrowGeneration's effort to become what it described as a "one-stop destination." It serves commercial customers, which include large U.S. multistate cannabis growers.
Seventy percent of GrowGeneration's revenue comes from multistate or bigger single-state operators, which often rely on such technology. GrowGeneration runs 52 stores that sell products like nutrients and soils. It doesn't sell cannabis directly.
The Actual Recommended Trade.....
** OPTION TRADE: Buy GRWG MAR 26 2021 55.000 CALLS at approximately $3.60.
The Profit Explained…..
“Weekly Options Members” entered a trade on GrowGeneration Tuesday, March 23, 2021 for approximately $3.60.
The trade was executed on our recommended buy-point, and within 13 minutes had reached $4.50.
Members were given the following advice…..
NOTE: Keep a close eye on the stock today – if there is sufficient profit it would be advisable to exit before the earnings report due to such a volatile market, and an unknown direction even if the report is excellent.
As the earnings report is not due until after the market closes today, an opportunity presents itself to re-enter this trade with a little variation. Again, with the proviso to exit when sufficient profit is made.
Will GrowGeneration Reverse Course From Yesterday’s Close?
Will GrowGeneration Earnings Come In As A Winner?
What Other Trades Are We Anticipating?
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For answers, join us here at Weekly Options USA, and get the full details on the next trade.
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