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These are the marijuana stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in the early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The P/S ratio shows how much you’re paying for the stock for each dollar of sales generated.

Marijuana stocks, as represented by the ETFMG Alternative Harvest ETF (MJ), have slightly outperformed the broader market. MJ has provided a total return of 36.9% over the past 12 months, above the Russell 1000 index’s total return of 35.0%. These market performance numbers and all statistics in the tables below are as of Aug. 23, 2021.

These are the marijuana stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue organically or through other means, and find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.

Best Value Marijuana Stocks

The marijuana industry is made up of companies that either support or are engaged in the research, development, distribution, and sale of medical and recreational marijuana. Cannabis has begun to gain wider acceptance and has been legalized in a growing number of nations, states, and other jurisdictions for recreational, medicinal, and other uses. Some of the biggest companies in the marijuana industry include Canopy Growth Corp. (CGC), Cronos Group Inc. (CRON), and Tilray Inc. (TLRY). Many big marijuana companies have continued to post sizable net losses as they focus on investing in equipment to speed up revenue growth.

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Momentum investing is a factor-based investing strategy in which you invest in a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks which have outperformed the market will often continue to do so, because the factors that caused them to outperform will not suddenly disappear. In addition, other investors, seeking to benefit from the stock’s outperformance, will often purchase the stock, further bidding its price higher and pushing the stock higher still. These are the stocks that had the highest total return over the last 12 months.

Here are the top 5 marijuana stocks with the best value, the fastest growth, and the most momentum.

The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

However, not all cannabis companies have fared well in the pandemic. Recreational cannabis retailers in tourist destinations such as Las Vegas saw their customer traffic dwindle, causing some of these dispensaries to start focusing on home delivery. In the medical segment, people delayed doctor visits, causing new patient starts to drop. Biotech companies experienced logistical challenges that affected sales and research progress.

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Learn about other stocks in this sector and how consumer staples have traditionally performed.

But, as in any nascent industry, there are also plenty of investment risks. Whether you're a first-time investor or a seasoned veteran, it pays to understand how this industry works. This guide will get you up to speed quickly and includes our picks for the top marijuana stocks.

A brief overview of the marijuana industry

This huge industry holds opportunities for long-term investors, but there are risks too.

Scientific advances are opening up new possibilities for the treatment and prevention of diseases.

The COVID-19 pandemic disrupted IIP’s business somewhat, with three tenants receiving temporary rent deferrals. The ancillary company has still grown phenomenally during the pandemic and is highly profitable. Because the company is organized as a real estate investment trust (REIT), IIP returns at least 90% of its taxable income to shareholders.

Scotts Miracle-Gro (NYSE:SMG) is another company benefiting from the same trends that have boosted GrowGeneration’s sales. The company’s Hawthorne Gardening subsidiary ranks as a leading supplier of hydroponic gardening products to the cannabis industry.

Even if financial performance is weighed down by acquisitions in the short term, now could be a great time to buy the stock. Columbia Care’s shares are down 32% year to date, but it could rapidly turn around in the near future.

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Key Points

The first phase of the plan is limited to Trulieve’s Chocolope NewBerry Sativa strain, but if well received, the cannabis company could introduce other strains and add more locations where customers can purchase them.

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Image source: Getty Images.

With less than two dozen dispensaries and revenue forecast to reach just $255 million this year, Jushi Holdings is smaller than many of its rivals, but analysts are forecasting sales to expand exponentially, hitting nearly $1 billion by 2024. That will help catapult it to the forefront of the industry and would undoubtedly bring its stock price along for the ride.