Investing well has to do with owning shares in companies that are growing fast, financially secure, and expected to expand their market share rapidly. They need to have the wind at their backs, as well as a loyal client base that supports their recurring revenues while taking on larger order sizes. Many of the Canadian-based pot companies can lay claim to such price drivers, and as such, they should be able to harness the current shift in the social fabric in North America. It will help to keep the upward momentum going.
CANN trades over the counter (OTC), which means that it is not listed on a traditional stock exchange like the New York Stock Exchange (NYSE) or NASDAQ. However, shares can still be purchased through many traditional brokerage accounts. Even if you can purchase CANN shares, you might want to proceed with caution. During the bullish run they had in 2017, there were still some troubling details in their financials:
Here’s another stock that has tripled in price over a period of weeks in its past, but has since trended down toward zero. As of Nov. 13, 2019, shares are trading for less than a penny (The chart for GRNH mirrored CANN up until 2018, and when the entire industry is acting the same, you know that the price moves are not based on the underlying companies, but are rather being moved by the stampede surrounding the overall concept of the industry..0072, to be exact).
Aphria (NYSE: APHA)
Unlike many cannabis-wannabes, who aren’t selling flower yet, Aphria is actively producing hydroponic cannabis with the help of the Canadian government and selling it for medical use. Aphria, as well as other cannabis companies with Canadian government partnerships, may be around for years to come. APHA’s shares rose nearly six-fold between 2016 and the beginning of 2019. Also, similar to Aurora (but unlike cannabis companies trading on the pink sheets), Aphria trades on the well-known and investor-trusted NYSE.
Still, there are some numbers that investors can take comfort in with Aurora. In 2018, Aurora brought in an impressive $55.2 million in revenue, up from just $1.44 million in 2016. Due to a one-time increase, the company had a positive net income in 2018, after years of losses before. The balance sheet also looks better than the ones above: $150 million in current assets and only $75 million in current liabilities.
Many people believe that cannabis is growing in popularity and it will become increasingly legal in the United States and elsewhere. However, investors should be cautious about assuming that companies in the industry will see their stock prices increase. Stock prices seldom correspond so neatly with broader societal trends.
There’s another trend here that should trouble investors, and that’s the idea of companies being only vaguely related to the cannabis industry. CANN explains that they are involved with consulting, advisory, marketing, and management services to the marijuana industry. In other words, they do not have a clear, narrowly defined purpose. What they do have is the word “cannabis” in the name of their company, and that may have helped their shares during the miniature stampede to pot stocks in 2017.
These are the marijuana penny stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, as well as find growing companies that have not yet reached profitability. In addition, earnings per share can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.
To begin with, cannabis stocks face higher-than-normal risk and volatility due to a long list of factors. Many publicly traded cannabis companies are young, unproven enterprises that face a complicated, fast-changing market that includes different laws across many local, state and regional jurisdictions, and it’s still illegal at the U.S. federal level. This is even more true of marijuana penny stocks, and investors should be especially cautious and perform more than their usual due diligence when investing in these companies. Some up-and-coming names in the marijuana penny stock category include High Tide Inc. (HITI.V) and Vireo Health International Inc. (VREOF).
ZENA.TO, MRMD, and HITI.V were top for value, growth, and momentum, respectively
Medical and recreational cannabis use has been legalized in a growing number of U.S. states and on a national level in Canada, fueling a burgeoning legal cannabis industry in recent years. Cannabis stocks are now a prime focus for investors seeking potentially explosive sales and stock growth. But there are certain considerations associated with marijuana stocks that investors should keep in mind.
These are the marijuana penny stocks with the lowest 12-month trailing price-to-sales (P/S) ratio. For companies in early stages of development or industries suffering from major shocks, this can be substituted as a rough measure of a business’s value. A business with higher sales could eventually produce more profit when it achieves, or returns to, profitability. The price-to-sales ratio shows how much you’re paying for the stock for each dollar of sales generated.
Here are the top three marijuana penny stocks with the best value, the fastest growth, and the most momentum.