CGC has been one of the market’s major disappointments over the last 4-years but the recent news of US Private Equity Fund Paine Schwartz has taken its stake up to 15% has sparked many investors’ attention, although they have said they have no intention of a takeover.
- From Paine’s broker Citi “At this stage, the shareholding is seen as a long-term investment and the Acquirer has no current intention of making an offer to acquire control of CGC.”
While the move feels opportunistic after the recent downgrade by CGC we don’t believe it’s necessarily a good reason to buy CGC although the risk/reward would start to look attractive into a pullback – this is a tough stock to own having continually disappointed over recent years plus it has large parts of its performance determined by the weather.
MM is neutral to positive CGC around $2.70
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