The Right Way to Build a Multibillion-Dollar CBD Empire

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Greg Miller

At the start of the new year, when I made the call that 2019 was going to be the "Year of CBD," I knew we were about to see a veritable horse race of companies rushing to get those products on shelves.

Barely four months later, we're already seeing café concoctions loaded with CBD and massive drugstore chains like CVS beginning to carry all manner of CBD creams, sprays, and lotions.

The more market share and positive coverage this segment gets, the better it will be for the choice CBD holdings in our model portfolio. And no doubt there will be a bumper crop of new CBD ventures to pore over.

One thing we won't be doing, however, is jumping at CBD gimmicks like this…

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Greg Miller

About the Author

Browse Greg's articles | View Greg's research services

Greg Miller started working on Wall Street in September, 1987, just a month before the "Black Monday" stock market crash.

During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.

After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies.  He's always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.

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Here are the biggest analyst calls of the day: Tesla, O'Reilly, Fox, & more

Here are the biggest calls on Wall Street on Monday.

RBC lowered their price target on Tesla to $210 from $245

RBC sees softer demand expectations and a delivery snag in China.

"Tesla is expected to report 1Q19 deliveries in early April... We revise down our total unit forecast by ~10% owing to meager demand and some M3 delivery issues abroad... We also incorporated lower pricing (and hence margins) on a go forward basis. Our PT moves to $210, reiterate Underperform..."

Read more about this here.

J.P. Morgan initiated Fox as 'overweight'

J.P. Morgan was impressed with the new company's array of businesses.

"We are initiating coverage of FOX Corporation with an Overweight rating and a December 2019 price target of $46... FOXA has an impressive mix of businesses, including strong cable channels driven by live news and sports, as well as a major broadcast network with a leading local TV footprint... We believe FOXA shares will maintain a premium valuation over the average in our large-cap media universe due to its higher growth profile, implying notable upside to shares from the current level..."

J.P. Morgan added O'Reilly Automotive to the analyst 'focus list'

J.P. Morgan said the colder weather in areas of O'Reilly shops will benefit it more than Advance Auto Parts, AutoZone and Genuine Parts as the harsh winter causes more auto repairs.

"Adding ORLY to the JPM Analyst Focus List given favorable three consecutive season setup... We are adding ORLY to the JPM Analyst Focus List as growth idea as we believe ORLY is likely to regain the best comp crown in the group after yielding it to AAP in 2H18... Specific to our analysis, on geographically-weighted basis, after a favorable temperature (-3.6 degrees) and snowfall experience (+143 inches across its footprint) in 2018, ORLY ranked first in terms of summer temperature YOY (+1.6 degrees)... Moreover, the 2019 winter saw temperatures only modestly higher (+0.8 degrees, similar to peers) with snow actually up YOY (+129 inches across markets)..."

Susquehanna upgraded Hibbett Sports to 'positive' from 'neutral'

Susquehanna said the athletic-inspired fashion retailer issued impressive an impressive earnings report.

"Better than expected SSS, operating margin, inventory levels, FY20 outlook, and indications that the City Gear acquisition was a very good idea are proving out have led us to upgrade the stock... Further, strong relationships with major vendors, and initiatives to jumpstart B&M sales are evident... We are raising our FY20/FY21 EPS estimates from $1.76/$1.93 to $1.93/$2.25, and increasing our PT [on HIBB] from $20 to $27..."

Wedbush added Signature Bank to the 'best ideas' list

Wedbush said Signature is one of the better positioned banks to benefit from lower rates.

"We are adding Signature Bank to the Best Ideas List as we believe it is one of the best positioned banks to benefit from the Fed having become more dovish than the market anticipated in its most recent FOMC meeting last week. Furthermore, Trump's nomination of Stephen Moore on Friday to the Fed board could tilt the board to be even more dovish given Moore has publicly criticized Fed chairman Powell's interest rate policy as being too tight. Fed fund futures are now predicting a 58% probability of a rate cut by year-end 2019..."

Bernstein downgraded Texas Instruments & Analog Devices to 'market perform' from 'outperform'

Bernstein is nervous about the set-up into the second half and believes both semiconductor companies are more expensive than others in its coverage universe.

"Overall we are growing increasingly nervous about the set-up for the industry into the 2H (with inventories remaining elevated, expectations higher, and valuations less favorable).. Consequently, after the recent run we are taking the opportunity to move to the sidelines on TXN and ADI (more broadly exposed, and more expensive, in our coverage)... We wouldn't talk anyone out of owning either for the long term (and we remain positively biased on the quality of the business franchises and execution) but given the broader set-up we might prefer to put new money to work in other parts of the space with more valuation support...."