The graph compares the price of a basket of large MSOs that are well covered by cannabis research analysts to the price of a basket of smaller less-covered MSO/SSOs for YTD 2021.
The smaller, less-covered companies are more volatile, generally rising faster in up markets and declining faster when pricing weakens. This is consistent with the markets for these stocks being less liquid.
YTD the smaller cap, less-covered group has outperformed their more covered counterparts by approximately 9%, however the gap has been as wide as 22%.
We have discussed the small vs large cap valuation gap in previous Viridian Capital Charts of the Week and this graph provides some modest evidence of a narrowing of that still immense divide.