Cannabis concern Tilray Inc. (TLRY) is strengthening its position within the U.S. market, observes Fernanda Horner, technical expert and contributing editor to Schaeffer Investment Research.
The company announced earlier it acquired Colorado-based Breckenridge Distillery, which produces bourbon whiskey and other spirits, for an undisclosed amount. The move is part of Tilray's plan to leverage brands to launch THC-based products once cannabis becomes federally legal in the U.S. At last check, TLRY is up 1.3% to trade at $9.57.
The brokerage bunch remains skeptical, however. Of the 15 analysts in coverage, 12 call the security a "Hold" or worse, while three say "Strong Buy." Should that pessimism begin to unwind, TLRY could move higher. Meanwhile, the 12-month consensus target price of $12.74 is already a 37.7% premium to current levels.
A short squeeze could fuel additional tailwinds for Tilray stock as well. Short interest is up 6.6% in the last two reporting periods, and the 41.46 million shares sold short make up 9.3% of the security's available float.
Tilray stock has had a few lackluster months on the charts. The equity just breached a former floor at the $10 level, after struggling with a ceiling at the $14 level since August. The 120-day moving average put a lid on TLRY's November rally attempt as well. Still, the security is up 15.9% so far this year.
TLRY is seeing well-priced premiums at the moment, too. The stock's Schaeffer's Volatility Index (SVI) of 79% stands higher than just 4% of other readings in its annual range, suggesting options players are pricing in low volatility expectations right now.
