The stock markets are now at historic lows, which actually may present a once-in-a-decade opportunity to buy quality stocks at cheap prices. There are plenty of stocks that have declined massively, yet many of those stocks have the potential of delivering strong returns in the long-term. For instance, investors could consider having a look at some of the CBD penny stocks in the market if they are looking to invest in a sector with the potential to grow in the long-term. The pot industry may have had a tough time over the past months, but in the long-term, analysts expect the industry to grow.
The sell-off in the wider market affected CBD penny stocks considerably in recent days, and many of those stocks have dropped to historic lows in recent times. However, this is the sort of situation where investors may consider picking up promising stocks at significant bargains. The CBD sector is highly promising and, if experts are to be believed, it could grow into a multibillion-dollar industry in the years to come.
Here is a closer look at 3 highly promising CBD penny stocks:
One CBD penny stock that ought to be on the radars of many investors at this point in time is Aphria. One of the most compelling arguments in favor of Aphria is the fact that it is one of the few companies in the cannabis sector that has recorded profits. In two out of the previous three quarters, Aphria recorded profits. However, there is one thing that needs to be kept in mind about APHA stock.
Unlike many other CBD penny stocks in the market, Aphria stock has not declined by as much. Sure, over the past year, it has crashed by 70%, but that is nothing compared to other companies like Aurora Cannabis (TSX:ACB) (NYSE:ACB) or Tilray (NASDAQ:TLRY). APHA stock is trading at $3.50 a share right now, which could be a bargain, considering the fact that it has price to sales ratio of below 3 at this point.
Market watchers believe that Aphria stock could well be one of the major bargains in the market right now. Investors could do well to put Aphria stock on their watch lists.
Another interesting CBD stock that could be tracked by investors is Curaleaf Holdings. Curaleaf released its financial results for the fourth quarter on March 24, which showed that it beat analysts’ revenue estimates. The company recorded total sales of $75.5 million, which proved to be a massive improvement on year-on-year. In the year-ago period, it generated $32 million in sales. In the fourth quarter, Curaleaf posted a loss of $26.6 million.
Analysts had projected revenues of $74.7 million for the quarter. The performance could prove to be a positive trigger for the stock in the coming days, so investors may want to keep an eye on it. In 2019, Curaleaf generated revenues of $221 million, and currently, it has a market cap of $1.9 billion. The stock is currently trading at 5 times its actual book value, and while that is expensive, it should be noted that it has recorded higher sales than peers like Aurora Cannabis or Aphria.
Curaleaf can also tap into the growing United States market in a big way, so one can argue that investors might be willing to pay a premium for Curaleaf stock.
One company that seems well-placed to tackle the current situation is Organigram Holdings. Organigram may not be one of the most cash-rich cannabis operators in the industry, but it does run a highly efficient operation, which could well be one of its major competitive advantages.
In addition to that, investors should also note that it is one of the few cannabis firms in Canada that has signed supply agreements with all 10 provinces in the country. Organigram is also the only big-ticket grower that is present in the Eastern Atlantic region, which gives the company the opportunity to corner a major market. It should be noted that this region has higher usage rates for cannabis than the Canadian average.
The company only owns one major facility, but this allows it to effectively control its production capabilities as per market demand. So, Organigram could be an interesting CBD penny stock to watch this month.