The Robinhood trading app has been gaining in popularity with young newbie investors south of the border. Although Robinhood isn’t available in Canada, it’s worth checking on the TSX-traded Canadian stocks to see what those youngsters are bullish on.
If you’re a young investor like a millennial, it may make sense to follow in their footsteps into the following three names, as long you’ve got the stomach because the following three names are all pretty risky cannabis stocks that you may have thought young investors have already moved on from.
Without further ado, here are the top three TSX stocks held by Robinhood investors. Spoiler alert: they’re all cannabis stocks!
The cannabis trade is dead, but Robinhood investors are still hanging on. Today, Aurora Cannabis (TSX:ACB)(NYSE:ACB) shares find themselves down over 90%. Despite the drop, many young investors have been braving the volatility to go against the grain with the licensed producer that could be a major upward mover should euphoria find its way back to pot stocks.
This Tuesday, Aurora stock surged 10.3% in a single trading session alongside the broader basket of pot stocks. The big move may be one of many as the cannabis industry looks to regain its footing in this post-legalization environment that’s faced a drastic expectation reset.
At $15 and change, I’d say Robinhood traders are right to stand by the name at these depths. The company recently expanded into the American CBD market with the acquisition of Reliva. With a mere 0.4 times book multiple, I’d say the stock is a must-buy because all the negatives are already baked in.
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Canopy Growth (TSX:WEED)(NYSE:CGC) is a pot behemoth that’s held its own far better than Aurora. The stock is sitting down over 60% from all-time highs and trades at 1.7 times book, which is over four times higher than that of Aurora. Canopy’s rolling with the punches better than most other cannabis companies thanks to Constellation Brands standing in its corner.
While I’m a huge fan of Canopy’s brands (such as Tweed and Tokyo Smoke) amid the “cannabis 2.0” catalyst, I can’t say that the premium price tag relative to Aurora is warranted. In any case, Canopy Growth is ridiculously cheap, given the long growth runway that still exists in the budding cannabis market.
Yes, the market may have matured, but value-conscious young investors still have a lot to gain from producers at these depths.
Finally, Aphria (TSX:APHA)(NASDAQ:APHA) is the third cannabis play that’s currently down 64% from its all-time high. Shares of the cannabis producer are up over 160% from March lows, having picked up a considerable amount of momentum of late.
Today, the stock trades at 1.12 times book, putting it in between Canopy and Aurora. The main attraction to Aphria is its profitability trajectory and its meaningful international exposure. As the taboo facing cannabis gradually fades and other nations look to follow in Canada’s footsteps with regards to legalization, Aphria could stand to be a significant winner, with front-row seats to promising countries outside the confines of Canada.
Aphria has done a top-notch job of keeping production costs low. And if foreign production gets the green light in other countries, I’d look for costs of production to fall far lower.
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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 Joey Frenette has no position in any of the stocks mentioned.