Missed Out on Aurora Cannabis? Buy Galaxy Digital Instead

One of the easiest ways to make up for missing a good investment opportunity is to find and capitalize on another.

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The cannabis industry in Canada experienced a modest revival in the last few weeks, including Aurora Cannabis, which has risen by about 127% in less than two months. The bullish momentum of this and other cannabis stocks hasn’t yet waned, but it may have entered the normalization phase.

It’s not too late to invest in the sector, but if you have missed out on the initial growth opportunity and are looking for a stock where you can get in on the next bullish momentum right from the beginning, Galaxy Digital Holdings (TSX:GLXY) is a good pick.

Current performance of the stock

Galaxy Digital Holdings has risen about 23% since the beginning of the year. The “growth” is minimal considering its returns when the crypto market or the stock itself is appropriately bullish. However, it does indicate that the stock is still moving in the right direction. The latter half of the growth momentum started in the second half of 2023, triggered by the growth of major cryptocurrencies like Bitcoin.

That makes the stock quite similar to cannabis stocks, which are also currently riding the last legs of waning growth momentum, but one thing that helps Galaxy Digital stock stand apart is its valuation.

With a price-to-earnings ratio of just 2.5, it’s currently one of Canada’s most undervalued stocks in the crypto industry. So, if there is a modest positive push in the crypto sector, like cryptocurrencies going up in price, the stock may experience a sizable surge.

If you buy now, you can capture the upside of the next bullish surge from the beginning.

Other factors to consider

One of the reasons why Galaxy Digital is a great way to invest in cryptocurrencies in Canada or, more accurately, gain exposure to the crypto industry in Canada is its diversified business model.

Unlike crypto mining companies, which are Canada’s most common type of crypto stocks, Galaxy Digital offers its investors a relatively sheltered exposure to the crypto market, making it a bit safer than most other crypto stocks.

Another factor that makes it a compelling pick is that its business model ideally positions it for a solid crypto economy. If crypto assets, investments, and holding become more mainstream and the need for crypto-related financial services increases, Galaxy Digital’s businesses will most likely thrive. This gives it more leeway to grow even when there isn’t a conventional crypto boom — i.e., the price of Bitcoin going up.

Foolish takeaway

If you have missed out on Aurora Cannabis or other cannabis stocks as they recently surged, you may anticipate a similar growth in an equally volatile sector like crypto. Galaxy Digital can serve as a powerful candidate in this regard. You may consider adding it to your portfolio for its next bullish phase.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Bitcoin. The Motley Fool has a disclosure policy.

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