Canadian cannabis producer Tilray (NASDAQ:TLRY) is set to release its third fiscal quarter 2022 earnings results on April 6. It’s bound to be a real headline grabber as TLRY stock is among the world’s biggest cannabis companies.
This event could truly be make-or-break for Tilray’s loyal investors. The share price has fallen from $22 a year ago to $7 and change recently.
When Tilray merged with Aphria in May 2021, this transaction created the world’s biggest cannabis company by revenue. This was a greatly anticipated event, but TLRY stock has declined sharply since then.
The crux of contrarianism is to buy when the market is pessimistic, not when there’s hype in the air. Just maybe, the consensus sentiment is low enough that practically any earnings results will be a pleasant surprise.
Some folks are also pessimistic about a related issue, the passage of the Marijuana Opportunity Reinvestment and Expungement Act, a.k.a. the MORE Act. If passed, the MORE Act would remove cannabis from its Schedule I (i.e., federally illegal) classification.
The U.S. House of Representatives recently passed the MORE Act. However, the bill isn’t expected to pass successfully through the Senate.
So, it’s probably not a great idea to pour your hard-earned money into TLRY stock just based on hopes of the MORE Act becoming law. A better reason to invest in Tilray now would be the possibility of a positive earnings surprise.
Analysts are only expecting Tilray to report $247.29 million in quarterly revenue. Frankly, that’s not an unreasonable bar to clear. Don’t fear the muted expectations, though; lean into them as a contrarian trader.
It’s not easy, psychologically speaking, to buy stocks that are trading near their 52-week lows. Yet, that’s how multi-bagger gains are made sometimes. Could TLRY stock become the surprise turnaround story of 2022?
To succeed in the art of investing, learn to expect the unexpected. Tilray is still a cannabis-industry giant even though it’s currently unloved on Wall Street. If you take a small position in Tilray shares prior to the April 6 earnings release, you might catch the company’s turnaround moment — and see some nice gains in your account, as well.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
