In the cannabis industry, there are quite a lot of solid performing pot stocks. This includes the top cannabis stocks like Aurora Cannabis Inc., Aphria Inc., and Tilray Inc. Although investors do tend to pay more attention to the larger pot stocks by market cap, small pot stocks can show value as well. It all comes down to knowing how to find market value in a given marijuana stock. The first way to figure it out is quite simple. Investors should use the internet as a tool to find out everything they can about a given pot stock.
This includes financials, fundamentals and any upcoming news or announcements. This is one of the best tools that we have to help combat unwanted volatility. Second, we can look at other factors like volume and where the industry is headed to make assumptions about where a given company may be directed. Because some pot stocks belong to different sectors of the cannabis industry, some have more of a correlation with different levels of volatility. This essentially means that some pot stocks will inherently be more volatile than others. With that in mind, it all comes down to making a watchlist and using it to guide ones decision. All things considered, here are three marijuana stocks that may still be showing momentum.
Pot Stock to Watch: Canopy Growth Corp.
Canopy Growth Corp. is considered to be the largest marijuana stock in the industry by market cap. After falling by around 70% in March, the company has since been able to gain back a lot of its losses. Because of its size, many investors have hedged their bets on CGC stock to make big gains in the future. But, in the past, it seems as though CGC stock has been quite volatile in both directions. One of the positives of Canopy Growth is that the company is quite cheap at its current price.
As of late September, CGC stock sits right beneath the $15 mark. The company has had to deal with some struggles stemming from a downtrodden Canadian cannabis industry. Despite this, the company posted an adjusted gross margin of around 7% which is on the right track. No matter what kind of performance CGC stock has in the short term, it is still backed by a very large investment from Constellation Brands Inc. With this, it has as much as $1.3 billion in free cash. Because of its position in the cannabis industry, CGC stock remains a leading pot stock to watch.
Pot Stock to Watch: Cronos Group Inc.
Cronos Group Inc. is in a similar market position as Canopy Growth. In that, Cronos Group received roughly $1.2 billion in cash from Altria Group Inc. a few years ago. With that, many investors have felt comfortable with the company's future as it has enough finances to back any expansion projects it wants. But, with that being said, it's probably not the best time to buy CRON stock due to how volatile it is. In addition, Canadian marijuana stocks have not performed too incredibly in the past few months. But, Cronos Group could have a solid long-term future in the cannabis industry.
The company has been working to produce several new products including edibles and vapes. Because it has spent so much time and money on the development of these products, the company posted a second quarter sales number of around $10 million. In order for Cronos Group to see success, the company will have to contend with the future of the Canadian cannabis industry. With that, it does remain only a pot stock to watch.
Pot Stock to Watch: Cresco Labs Inc.
Cresco Labs Inc. is a pot stock that has been performing better than most. Based out of the U.S., Cresco Labs has been able to capitalize on the massive demand increases for cannabis domestically. As an MSO, CRLBF stock has also been able to post solid profits and wide margins. Of the ten most populous states in the U.S., Cresco Labs has stores in six. This just goes to show how important its market share is in the cannabis industry.
While it may not be the largest MSO pot stock, CRLBF stock has benefitted from the unique markets that it is in. This includes Illinois which only recently legalized marijuana. With this, the company has several statewide markets that could perform quite well in the long term. Of course, we have to view companies like CRLBF stock as a long term pot stock to watch rather than in the short term. With this, CRLBF stock remains backed by a profitable company with a large U.S. footprint to match.