Lens on 3 sin stocks: Alcohol (MWE), Cannabis (CBD), Casinos (SKC)

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Lens on 3 sin stocks: Alcohol (MWE), Cannabis (CBD), Casinos (SKC)

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  • Sin stocks are commonly associated with alcohol, gambling, cannabis, etc.
  • Marlborough Wine Estates Group gives its FY22 earnings guidance
  • Cannasouth announces a successful assessment of it
  • SkyCity Entertainment Group

‘Sin Stocks’ are those stocks which are related to the business of drinking, cannabis, gambling and tobacco, among others. In other words, these stocks are generally associated with sins like drinking, etc., which otherwise are considered unethical or immoral.

It is noted that consistent consumer demand for these products has helped sin stocks in delivering relatively better results than their counterparts. Hence, this space seems to be an opportunity for wealth creation for investors. However, these stocks face greater political risks than others.

Against this backdrop, let us now walk through the three NZX-listed sin stocks.

sin stocks- MWE, CBD, SKC

Source: © Dolgachov | Megapixl.com

Marlborough Wine Estates Group Limited (NZX:MWE)

Marlborough Wine Estates Group Limited is known for producing high-quality wines and has a market cap of around NZ$59 million.

Interesting Read: MEE, MWE, ARB, SVR- Will these 4 penny stocks cast a spell this year?

Last month, the Group revealed that it had completed its 2022 harvest, with 12% more than expectations in its harvested volumes. Despite the pandemic and related restrictions, MWE witnessed a strong international demand, which has accelerated its growth across global markets.

Further, for its FY22 earnings guidance, MWE is projecting an NPAT in the range of NZ$0.3 million to NZ$0.4 million and is optimistic about further growth in coming years.

At the time of writing on 20 May, MWE was trading flat at NZ$0.200.

Cannasouth Limited (NZX:CBD)

Waikato-based Cannasouth Limited is a medicinal cannabis company having a market cap of around NZ$49 million.

Thursday, the Company revealed the successful assessment of three of its cannabinoid products by the Medicinal Cannabis Agency. It will help CBD to deliver wider treatment options to Kiwi patients and prescribers, with differentiated formulations of their products, unlike those which are currently available in the market.

Do Read: CBD, MHM, TWR: 3 penny stocks flying high on NZX today

Further, CBD is about to harvest its first commercial crop of medicinal cannabis flower at its world-class facility located across Waikato.

At the time of writing on 20 May, CBD was jumping 5.80% at NZ$0.365.

SkyCity Entertainment Group Limited (NZX:SKC; ASX:SKC)

SkyCity Entertainment Group Limited is NZ’s famous gaming and entertainment business, operating a range of casino properties, hotels, restaurants and bars and has NZ$2 billion as its market cap.

Recently, the Group has announced securing debt covenant relief from its banking syndicate as well as from US private placement holders for the testing period pertaining to June 2022. Further, an amendment has been secured for the previously agreed debt covenant for June 2022.

Also Read: SkyCity (NZX:SKC): How has the Company performed so far in 2022?

It is pointed out that despite its recent improved performance, SKC has sought the said waiver following a prudent approach in case of the emergence of any contingency emerging from uncertainties associated with COVID-19.

At the time of writing on 20 May, SKC was down 1.41% at NZ$2.790.

Bottom Line

Though considered immoral by many, sin stocks tend to perform relatively well even in adverse economic conditions.


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