New Age Beverages Corp (NASDAQ: NBEV) and India Globalization Capital, Inc. (NYSEAMERICAN: IGC) are both having an incredibly rough day in the market today. While neither company has released any news, we believe that we’ve found the reason for the decline. Today, we’ll talk about:
- Why NBEV and IGC stocks are falling;
- what we’re seeing in the market; and
- what we’ll be watching for ahead.
Why NBEV And IGC Are Falling
As mentioned above, both New Age Beverages and India Globalization Capital are taking a bit of a dive in the market today. Interestingly enough, these are both stocks that have seen pretty strong runs as the result of CBD-infused beverage announcements. While neither company has released any news, we do believe that there’s a good reason for the declines in both NBEV and IGC.
It all has to do with a competitive investment. Recently, a Seeking Alpha article pointed to the idea that Youngevity International (YGYI) was the best play in the CBD space. In particular, the article pointed out that YGYI is currently trading at 1x expected 2019 revenue before accounting for CBD drinks.
It’s hard to argue a multiple like that. It’s one that we don’t often see in any industry. In the CBD space, stocks have been soaring, reaching multiples that are leading many to believe that this is a bubble. So, with the fact that YGYI’s 1x revenue multiple was pointed out, we believe that investors interested in CBD-related investments are ditching NBEV and IGC and moving their money over to YGYI.
What We’re Seeing In The Market
As we know, investor sentiment is a key player in market performance. When it comes to New Age Beverages and India Globalization Capital, investor sentiment is down as a result of a competitor that seems to be the clear opportunity in the space. So, it comes as no surprise to see that both of these stocks are falling. Of course, our partners at Trade Ideas were the first to alert us to the declines. Currently (11:45), NBEV and IGC are trading at $6.15 per share and $5.05 per share respectively after respective declines of $1.24 per share and $1.69 per share or 16.78% and 25.06% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NBEV, IGC, YGYI and the rest of the CBD space. In particular, we’re interested in learning which of these names will become the leader. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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