Technology: Is Canopy Growth stock a safe buy? - PressFrom - Canada
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TechnologyIs Canopy Growth stock a safe buy?

22:55  05 december  2018
22:55  05 december  2018 Source:   fool.com

Why Canopy Growth stock could get a boost this week

Why Canopy Growth stock could get a boost this week Canopy Growth Corp (TSX:WEED)(NYSE:CGC) has been down in recent weeks, but things could get a lot better tomorrow.

Why Canopy Growth stock could get a boost this week. Canopy Growth Corp (TSX:WEED)(NYSE:CGC) has been down in recent weeks This is certainly not a stock for investors with a weak stomach, but in the sphere of marijuana companies, Canopy Growth is actually not that

Canopy Growth Corp. reported that it beat revenue expectations well after the end of the extended session late Thursday. CIBC Maintains a Buy Rating on Canopy Growth Corporation (WEED). A Wall Street analyst has provided a review for the Healthcare company today, but retained the same

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Volatility continues to run wild in the marijuana stock industry and investors are trying to figure out which pot stocks are the safest bets heading into 2019.

Let’s take a look at Canopy Growth Corp.(TSX:WEED)(NYSE:CGC) to see if it deserves to be in your portfolio right now.

Volatile market

A year ago Canopy Growth traded for $18 per share. In the middle of October, it hit a closing high above $73 and has since given back a good chunk of the gains. At the time of writing, investors can buy the stock for $43 per share.

Is now the time to buy marijuana stocks such as Canopy Growth Corp (TSX:WEED)?

Is now the time to buy marijuana stocks such as Canopy Growth Corp (TSX:WEED)? Canopy Growth Corp (TSX:WEED)(NYSE:CGC) and Aurora Cannabis Inc. (TSX:ACB)(NYSE:ACB) stocks plunged on the back of disappointing quarterly results. Is it time to buy pot stocks?

Thinking about buying stock in Aceto, Canopy Growth Corp., Frontier Communications Corp., Midatech Pharma or Sea Ltd? Canopy Rivers Completes Previously Announced Bought Deal and Concurrent Private Placement for Total Gross Proceeds of Approximately .5 Million.

This suggests that Canopy Growth may very well be an acquisition target for Constellation Brands within the next couple of years. If that’s the case, the The biggest reason to think twice about buying Canopy Growth is its bottom line. There’s absolutely no question that it and its peers will deliver

This is certainly not a stock for investors with a weak stomach, but in the sphere of marijuana companies, Canopy Growth is actually not that bad when it comes to big moves in the share price.

For example, Aphria just saw its stock tank 40% in two trading sessions due to a short-seller report that questioned the value of the company’s recent acquisition in Latin America.

Strong base

Canopy Growth is widely viewed as the name to beat in the sector, as the company’s management team appears to be making all the right moves. Canopy Growth acted early to buy rivals in an effort to get a leg up on the Canadian medical marijuana market and establish a foothold to prepare for the recently launched recreational market.

Canopy Growth was also the first Canadian cannabis producer to partner with a major beverage player. Constellation Brands, a U.S.-based wine, beer, and spirits company that owns Corona, bought a 9.9% stake in Canopy Growth last fall for $245 million.

Canadian Weed Giant Backs Medical Marijuana Trials in U.K.

Canadian Weed Giant Backs Medical Marijuana Trials in U.K. One of the world’s biggest cannabis growers is preparing to fund clinical trials of marijuana-based drugs in the U.K. that could help jump-start the nascent British market. Canopy Growth Corp., the Canadian pot producer, and a consortium of investors said they’re putting 7.4 million pounds ($9.5 million) into testing medical cannabis for treatment of pain and opioid dependence. Beckley Canopy Therapeutics Ltd., a U.K. firm partly owned by Ontario-based Canopy, will conduct the tests. While the U.K. legalized medical cannabis earlier this month, adoption has been slow.

Canopy Growth stock has dropped over 40% in a matter of weeks. So the argument for buying Canopy Growth here is relatively simple. A Bottom for Canopy Growth Stock ? So there’s an interesting argument to be had relative to the current valuation of CGC stock against Constellation’s

Canopy Growth , an early mover in the Canadian market, is a multi-faceted cannabis company with a strong investment in brand, market and product differentiation. Through owned and partnered cannabis production platforms, as well as education to help customers safely , effectively and responsibly use

The company invested an additional $5 billion in August to take its position to 38%. That deal was done at the equivalent of $48.60 per share, so Constellation is currently under water on the investment, but not by much given the strong pullback in the broader cannabis sector in recent weeks.

The two companies are working together to develop cannabis-infused beverages for the Canadian market once marijuana consumables are allowed for sale. That part of the market is expected to open sometime next near.

International focus

Canada gets most of the headlines, but Canopy Growth sees the largest opportunities in the growing global medical marijuana market. The company has an established presence in Europe through its German pharmaceutical distribution business and is building production facilities to supply patients in the region.

In Latin America, Canopy Growth has research and development operations in Chile and production assets in Colombia.

Is the boom in Canada’s marijuana stocks over?

Is the boom in Canada’s marijuana stocks over? As Aphria Inc. (TSX:APHA) stock comes under pressure, investors should focus on other top marijuana producers, such as Canopy Growth Corp. (TSX:WEED)(NYSE:CGS).

This suggests that Canopy Growth may very well be an acquisition target for Constellation Brands within the next couple of years. If that's the case, the The biggest reason to think twice about buying Canopy Growth is its bottom line. There's absolutely no question that it and its peers will deliver

Canopy Growth has seen a 45% price decline in the past few weeks, bringing valuations more in line with the company's production possibilities. Canadian legalization will increase over the course of many years and Canopy Growth will be able to grow in line with these sales.

Should you buy?

The big investment from Constellation Brands appears to be a signal to the market that Canopy Growth is the real thing. The stock remains expensive based on its current revenue stream, and ongoing volatility should be expected.

However, Canopy Growth should be one of the companies that emerge as top global player once the market begins to mature. If you like the long-term potential for the marijuana industry, Canopy Growth is one name that deserves to be on your radar.

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Fool contributor Andrew Walker has no position in any stock mentioned.

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Cannabis company Slang Worldwide’s shares soar in first public trading.
TORONTO - The newly listed shares of a cannabis-brand company co-founded by two entrepreneurs whose first pot venture was bought by Canopy Growth have soared by as much as 33 per cent. Slang Worldwide Inc.’s stock was trading at $2 on the Canadian Stock Exchange in early afternoon, after it commenced trading at $1.50. The stock, which trades under SLNG, closed at $1.93 up 29 per cent. Slang co-founders Peter Miller and William Levy also co-founded licensed producer Mettrum Health Corp., which was sold to Canopy in 2017 for roughly $430 million. Miller and Levy’s latest company is a cannabis-focused consumer packaged goods company with a portfolio of brands.

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