Pot Stocks for 2014 (MJNA, PHOT, CBIS)

dr-dre-the-chronic

With Marijuana now legal in WA and CO, it's time to get investing.

At the start of the year we reviewed the stocks you can buy that are involved in the legal and medical marijuana trade.  We check back on them today and see that they are all still penny stocks.  Medical Marijuana (MJNA), GrowLife (PHOT), Greengro Technologies (GRNH) and Cannabis Science (CBIS) are the only stocks we would recommend trading at this point in time.

You have to go with market cap when reviewing this line-up of pot heads.  In consideration are the following Tickers: MJNA, HEMP, ERBB, PHOT, GRNH, CBIS

  Valuation
  Company name Price Mkt Cap
MJNA Medical Marijuana... 0.318 301.34M
HEMP HEMP, INC. 0.183 50.14M
ERBB Tranzbyte Corp 0.0227 766,633.00
PHOT Growlife Inc 0.344 244.88M
GRNH GreenGro Tech., Inc. 0.476 71.86M
CBIS Cannabis Science Inc 0.222 169.01M

Taking 1st place with the largest market cap is Medical Marijuana (MJNA), followed by GrowLife (PHOT) then Cannabis Science (CBIS). I'm going to throw out Greengro Technologies (GRNH) as I hate penny stocks to begin with. Let's just concern ourselves with MJNA, PHOT and CBIS.  All we care about is making the right investment and getting a return on our investment.

Caution: All these 'pot stocks' are very volatile and subject to 'pump and dump' scams.  Please do not allocated more than 3% of your portfolio or hard earned cash toward these companies.  It is not worth the riskIf you are hoping to make millions by buying these stocks you are going to lose.  Don't do it.

Words of caution from seasoned investors about putting money into pot plays are easy to find. Fund manager Frank Igarra: "There might be one or two that survive, but having seen crazes like this, people have been burned by them a lot. The average investor should think twice."

MJNA has had an exciting January, with the Jan 27, 2014 close of $0.3999 being a nearly 160% increase from $0.155 close of December 31, 2013. Daily volume has increased dramatically as well, with the volume on January 28 exceeding 117 million shares, or twelve (12) percent of the outstanding shares, though the stock closed down 3.2% at $0.387.

Too much to risk and MJNA is the darling of the legal pot stocks.

SMOKE IF YOU GOT EM

Personally I would rather bet on big tobacco via Altria (MO), Reynolds American (RAI) or Lorillard Inc. (LO). MO is not going to roll over if these pot companies take off.  Big money always win and that rings true for tabacco.  

Of those three you have to go with the healthy expensive cigarette maker of American Spirit Reynolds American (RAI).  RAI packs a 5% annual dividend yield and closed Friday at $48.76.  None of those ganga stocks pay a dividend and trade over $1.  I'll go with the true legal option.

Reynolds American, Inc.

NYSE: RAI - Feb 7 4:01 PM ET

48.76+0.97 (2.03%)

Bottom line: Don't waste your time on pot stocks, you'll get smoked. Big tabacco rules this world and pays dividends, i.e. RAI, LO, MO.