Biotech Stocks Analysis

BcA. Christine Nabwire Ouma, BA (Hons)

Master's thesis

Abstract:

The objective of this master's thesis is to analyse the stock performance of hemp biotechnology major companies listed on the NYSE and NASDAQ. To this end, the study sought to answer research questions such as the volatility trend of hemp biotechnology stocks, the importance of stock volatility trend to investors, and the impact of financial ratios on stock volatility. The study used both ex post facto and descriptive research design and identified ten cannabis biotechnology companies based on the number of years they have been publicly traded in the stock markets and their market capitalization. The findings of the study, is presented in tables, figures and graphs, including monthly volatility and annualized volatility from January 2018 to August 2022. Subsequently, the author concludes that cannabis biotechnology stocks are highly volatile due to uncertainty about the regulatory environment, lack of proven business models, and profitability among publicly traded companies. The author recommends that investors conduct thorough research before investing in these stocks and suggests further empirical studies be conducted in all stock markets around the world. In addition, future studies may focus on other financial ratios and their impact on the volatility of cannabis biotechnology stocks and use the exponentially weighted moving average (EWMA) model and histograms to determine stock volatility. In conclusion, investors may exercise caution as uncertainty makes it difficult to predict which stocks may outperform or underperform.

Keywords

cannabis biotech stocks, market capitalisation, NASDAQ, stock volatility, stock exchange, cannabis industry, investment, standard deviation, New York Stock Exchange

Language used: English

Date on which the thesis was submitted / produced: 8. 4. 2023

Thesis defence

• Date of defence: 29. 5. 2023
• Supervisor: doc. Ing. Petr Procházka, MSc Ph.D.
• Reader: Vladimír Hönig, externi

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme:
Economics and Management