Are These The Best Pot Stocks To Buy Right Now?
Cannabis stocks soared after receiving another shot in the arm on Wednesday. This came after the United Nations Office on Drugs and Crime voted to remove marijuana from Schedule IV of the 1961 Single Convention on Narcotic Drugs. The symbolic vote could encourage the U.S. to loosen laws on marijuana. Investors appear to be all fired-up to jump on to the once over-hyped industry. But this time, it could be different, and it is definitely less hype than it was in 2018. Let’s look at why the cannabis industry rose, fell, and then rose again.
“Congress may be moving slower than the cannabis industry would like, but it is moving faster than almost any other policy issue,” analyst Eric Assaraf said. “Not even the pandemic is derailing a House vote on the MORE Act scheduled for tomorrow, which would legalize cannabis.”
For starters, cannabis has been illegal at a federal level in the U.S. since 1970. However, due to the increasing popularity of legalization for both medical and recreational use, there has been a lot of speculation on federal legalization. As a result, there were too many investors looking for a quick buck that led to a bubble. And that bubble burst in 2019. From there, some of the top pot stocks in the world, including Curaleaf (CURLF Stock Report) and Aphria (APHA Stock Report) saw their value vanishing into the ether. Now, with a Biden presidency and the recent vote from the U.N., investors appear to be coming back in droves. This in effect led investors looking for the top pot stocks to buy right now. That said, do you have these pot stocks on your list?
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Top Pot Stocks To Buy [Or Avoid] Right Now: Aurora Cannabis
Aurora Cannabis (ACB Stock Report) led the rally in the cannabis space on Wednesday by closing 12.48% higher. Now, with ACB stock seems to be taking a breather, sliding 2.92% as of 9.51 a.m. ET, should investors buy the stocks as they dip? In the past month, ACB stock has made some investors rich, with its stock price up nearly 190%. The monstrous rally could be because ACB stock was very oversold. It seemed like a few catalysts in addition to a technical rebound were working in favor of ACB stock.
While the company had to write down billions in losses on its assets over the miscalculation of the supply and demand balance of Canada’s legal marijuana market, it didn’t take its mistakes lightly. The company has been working around the clock in restructuring its company. And investors are relieved that Aurora is on track to resize its operations. The cost-cutting measures appear to be working well. Investors may now be wondering if the company can leverage its existing assets to turn things around for the better.
Despite its strong gains in the past month, ACB stock is still trading at a low valuation. Currently, the company is trading at an undemanding 6 times revenue. With potential improvements in the company’s U.S. and Canadian operations, we could be looking at exciting times ahead. Nevertheless, we don’t know if it will be smooth sailing. The question is, would you be willing to bet on ACB stock now?
Top Pot Stocks To Buy [Or Avoid] Right Now: Tilray
Tilray (TLRY Stock Report) is a global leader in cannabis research, cultivation, processing, and distribution. The company is the first GMP (Good Manufacturing Practice)-certified medical cannabis producer to supply cannabis flower and extract to patients and researchers in over 5 continents. Tilray produces and controls products according to quality standards by being GMP certified. The company’s share price is up nearly 250% since the March lows.
The company announced its third-quarter fiscal on November 9. Tilray reports a total revenue increase of 2% year-over-year at $51.4 million. Its cannabis segment revenue increased by 4% and the company also saw a 13% increase in Adult-Use sales. The company also reported a cash flow of $155.2 million at the end of its third quarter.
Despite the less than stellar performance in its third quarter, the company sees a $150 billion market for the global cannabis industry. This huge prize could be within the company’s reach as it positions itself for further growth. For instance, the company has boosted its presence in the U.S. by acquiring Manitoba Harvest in 2019. Manitoba Harvest is the world’s largest hemp food manufacturer. Tilray is also targeting the European market as more countries move to legalize marijuana. With that in mind, will you consider having TLRY stock in your portfolio?
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Top Pot Stocks To Buy [Or Avoid] Right Now: Canopy Growth
Canopy Growth (CGC Stock Report) is also one of the top pot stocks to buy in recent months. The largest pot stock in the world has delivered quite a stellar return. CGC stock more than doubled since the beginning of October. After a strong rally of this magnitude, investors began to question if the rally could continue. But analysts from Bank of America, Bryan Spillane and Lisa Lewandowski raised the price target on CGC stock to $32.37 and maintained a “Buy” rating.
The analysts explained that potential changes to the US federal law on cannabis bode well for the overall cannabis industry. It could also benefit Canopy Growth significantly as it would enable the Smiths Falls, Canada-based company to expand its activities in the U.S. On top of that, being the biggest cannabis stock by market cap comes with its perks. Its close relationship with Constellation Brands (STZ Stock Report) comes to mind. You see, both companies could work together on higher-margin cannabis derivatives. In addition, there could be partnerships in terms of marketing and distribution. That could lead to better utilization of resources, leading to higher profitability.
Besides having a strong partner, Canopy Growth has a robust balance sheet with ample liquidity. At the end of September, the company had over $1.3 billion. That gives the company a lot of financial flexibility in comparison with its rivals. With a notable company as its major shareholder and strong balance sheet, should investors be buying CGC stock now?