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The Truth Behind Marijuana Stocks

|Includes: AVTCQ, Notis Global, Inc. (NGBL)

I love the stock market… There are many opportunities to make money, utilize analytical thinking skills, and feel proud when your hard work and insight pays off with a nice profit.

But I have to admit that there is a frustration… and that is all of the commentators and "analysts" that claim to be unbiased, but clearly have an agenda in their posts.

Reading their posts is like driving past a horrific automobile accident… it is tragic, but you can't help but look.

This is especially true for stocks in the emerging legal marijuana industry. One Seeking Alpha commentator claims to not have any positions in the stock he discusses, but it doesn't much digging to discover that he runs a fund that has positions in the competitors to the stocks he bashes. In other words, while he may not have a position in the stock he tries to destroy, he does have multiple positions in the sector. So when an investor want to get in to that hot sector, they are naturally led down the path toward the stocks he owns.

You see his comments under a number of different names on Seeking Alpha and on message boards, all attempting to discredit some stocks in order to drive investors towards the stocks he owns.

While this is somewhat amusing, it is also clearly wrong. His advice is not impartial. Rather than being upfront with readers, he spends a great deal of time and energy on this type of "back door" promotion of the stocks on which he stands to personally gain.

Two of the stocks he regularly bashes are Medbox (MDBX) and AVT (AVTC). He has launched a serious of attacks, stooping to the lowest levels to try and dig up some dirt.

But he has failed.

And here is why: These stocks are good. The companies are good. They make real products, real revenues, and real profits. Neither is an IBM or Coca Cola, but they stand in stark contract to some of the other stocks in the marijuana sector, which are purely speculative.

AVT has revenues of around $15 million, and a forecast of $25-$35 million for 2014. It has several revenue streams, and derives income from a number of sectors. It is profitable, it are growing, and the stock is a bargain.

Medbox shows a profit on revenues of about $5 million, but is set to explode as more large states legalize medical or recreational marijuana. It has a "shareholder friendly" attitude and has rewarded long time stakeholders with substantial dividends. Medbox is not in the business of growing or cultivating marijuana. In fact, it has a patented system that keeps dispensaries in compliance with full transparency, so all taxes are paid, and records are scrupulously accurate. I think that's a good thing.

In summary, be careful where you get your advice. Do your own homework, because there are "advisors" out there that have agendas and personal reasons for the leading you towards or away from any stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.