At What Price Is Canopy Growth Corp (TSX:WEED) (USA) Stock a Bargain?

Shares in Canopy Growth Corp (TSX:WEED)(NYSE:CGC) have lost close to half their value over the past few months, but at what price is WEED stock a true bargain?

| More on:
question marks written reminders tickets

Image source: Getty Images

To be perfectly frank, it’s been a rough couple of months for Canopy Growth Corp (TSX:WEED)(NYSE:CGC) and its shareholders.

Stock in Canada’s largest publicly traded cannabis company has lost nearly half its value since April, and also lost its original founder and co-CEO.

But I’d say things actually aren’t that bad at all.

Cannabis stocks as a group have not fared well in recent months, which could be because of a general uncertainty about how things will shake out next in the public markets.

Another part of it could be that investors are still waiting for real, tangible results to materialize nearly a year after official legalization, and yet another part could be that investors are still waiting for the other shoe to drop as markets (for both consumers, and investors) anticipate the legalization of officially regulated edible products.

The fact that Bruce Linton just got the boot doesn’t help the case for Canopy as a relative value play right now either.

But still, things aren’t actually that bad.

No one can truly be sure as to why Canopy stock has been selling off and how much of it has to with Bruce Linton, but there are a couple of positives that I think investors ought to be taking away from Linton’s removal.

One is that upon his exit, Linton promptly went back to public markets to buy more WEED stock.

The second would be that perhaps, rather than viewing his removal as some type of indication that things at Canopy are spiralling out of control, maybe it’s actually a positive sign that those in charge of the company’s books know exactly what they’re doing.

Readers should remember that one of the world’s largest alcoholic beverage makers, Constellation Brands, Inc. (NYSE:STZ) owns – and controls – 35% of Canopy Growth.

Readers should also remember that despite the fact that many cannabis companies are run by new managers and start-up entrepreneurs, Constellation Brands has been around longer than many of those managers have been alive, and that’s no coincidence.

There was obviously more than one reason why Constellation chose CGC to partner with on the dance floor. One of those reasons was the staying power of the company’s stock, which had much buying power in the market as one of the first cannabis stocks to get big fast — and the first to surpass the $1 billion mark in terms of its market capitalization.

At a $36 share price on the TSX and at under $30 on the NYSE, is Canopy a bargain today?

It could be.

Personally however, I’m going to try and hold off a little longer and see if I can’t get in on this company at an even lower price — potentially even something near the $20 range.

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 Jason Phillips has no position in any of the stocks mentioned.

More on Cannabis Stocks

Powder of Cannabis (Drugs), Analysis of Cannabis in laboratory.
Cannabis Stocks

Canopy Growth: Is There Budding Potential in the Cannabis Market?

Canopy Growth stock hit 52-week lows recently on news of needing to re-file on its BIoSteel business, so what now?

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

What’s Happening With Cannabis Stocks in May 2023?

Cannabis stocks were up this week, as the market began to turn, but how long will it last, and is…

Read more »

Cannabis smoke
Cannabis Stocks

Are Cannabis Stocks a Good Buy in May 2023?

If you're going to buy cannabis stocks, these are pretty much the only two I would consider. Even so, you…

Read more »

edit Cannabis leaves of a plant on a dark background
Cannabis Stocks

Aurora Cannabis: Time to Light Up Your Portfolio?

Here's my take on whether Aurora Cannabis (TSX:ACB) is worth adding to a growth portfolio right now, given its growth…

Read more »

Target. Stand out from the crowd
Tech Stocks

These Undervalued TSX Stocks Are a Bargain in May 2023

If you're willing to bet on a rebound, these are the three TSX stocks I would consider first as they…

Read more »

A cannabis plant grows.
Cannabis Stocks

Tilray Stock Is Scraping 52-Week Lows: Will it Bottom Out Soon?

Tilray (TSX:TLRY) stock remains down 53% in the last year, but when will this company hit the bottom and start…

Read more »

Medicinal research is conducted on cannabis.
Metals and Mining Stocks

2 Canadian Stocks That Are Simply Too Cheap to Avoid

These two Canadian stocks have sunk lower and lower, which is why now could be the right time for long-term…

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

1 Marijuana Stock I’d Buy Over Aurora Cannabis

Explore a promising marijuana stock that outshines Aurora Cannabis. Unveil the investment opportunity to boost your cannabis portfolio.

Read more »