Ranking Canada’s Premium Marijuana Stocks

Canopy Growth Corp. (TSX:WEED)(NYSE:CGC), Aurora Cannabis Inc. (TSX:ACB)(NYSE:ACB), Cronos Group Inc. (TSX:CRON)(NYSE:CRON), Hexo Corp. (TSX:HEXO), and CannTrust Holdings (TSX:TRST)(NYSE:CTST) are among Canada’s top marijuana stocks. Ranking them is a challenge because you can only assess based on the prospect of strong earnings.

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When you attempt to rank Canada’s top marijuana stocks, there’s no cut and dried approach. In the absence of fundamentals, your evaluation will focus on the following: stock performance, business outlook, and price projections. But for some investors, buying decisions are based on intuition or gut feel.

Using the parameters mentioned, Canopy Growth Corp. (TSX:WEED)(NYSE:CGC), Aurora Cannabis Inc. (TSX:ACB)(NYSE:ACB), and Hexo Corp. (TSX:HEXO) appear to be the frontrunners. Two others, Cronos Group Inc. and CannTrust Holdings round out the top five.

Stock performance

Weed stocks are always in the news and are monitored in every trading session. Even big corporate names in rival industries like tobacco and alcohol are involved. They invested billions of dollars to enter the space and partner with cannabis companies. Without a doubt, one of the world’s biggest industries is emerging.

The movements of all cannabis stocks are erratic. Any negative publicity will trigger a sharp drop in prices. But a press release announcing new strategic moves will send shares soaring. That has been the general mood so far this year.

HEXO is the top performer as the shares are up +120.38% year-to-date. WEED (+80.69%) and ACB (+76.25%) are the second and third best. CRON (+51.95%) is doing well too while TRST (+22.07%) is outperforming stocks outside the cannabis sector.

Business outlook

Of the five weed stocks, Canopy Growth is making the loudest noise lately. The company’s partner, Constellation Brands, is making known its desire to dominate the cannabis-infused beverage market.

The company’s recent deals with Acreage Holdings Inc. and Europe’s largest cannabinoid-based pharmaceuticals company, C3 Cannabinoid Compound, also boosted the stock. Clearly, Canopy is determined to capture the U.S. and European markets. Add the star power of Martha Stewart to push CBD for pets.

While Canopy Growth is the largest in terms of market cap, Aurora Cannabis is the production champion. That company is poised to achieve the highest level of annualized capacity (625,000 kilograms) to complement its solid international presence.

Hexo is doing far better than the two giants, but Canopy’s treasure chest and Aurora’s production capacity will be difficult to compete against. Cronos is creating a buzz with the opening of its cannabinoid device R&D facility in Israel. The company is looking to expand its global infrastructure network.

For CannTrust Holdings, everything hangs in the balance. The specialty & generic drug manufacturer is set to report earnings for the first quarter ending March 31, 2019, on May 14.

Price appreciation

Analysts are betting on WEED to hit the $100 mark or a +51.17% increase in the months ahead, and are forecasting that the prices of ACB and HEXO to increase by +38.08% and 34.87%, respectively.

Conversely, CRON can only climb as far as +1.97%. Surprisingly, analysts are recommending a buy rating for TRST. They project a price appreciation of +57.36%, which is better than WEED’S potential increase.

However, nothing is certain. Things could change in a heartbeat. But if you were to base it on investor hunch, WEED and ACB will rank the highest. The rest are second fiddle.

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 Christopher Liew has no position in any of the stocks mentioned.

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