Top Cannabis Stocks To Invest In During This Pullback
Are you looking for top marijuana stocks for your watchlist this week? After a sharp decline last week many cannabis stocks are trading lower in the market. To start July the cannabis sector was climbing higher but is now close to its lowest price points in 2021. For many investors watching what top cannabis stocks do going forward is going to be important. So far this year pot stocks have seen significant market volatility for the first half of the year.
After rallying in January and half of February the sector took a steep decline that has lasted for several months. But there are some areas of the cannabis sector that have shown more stability one of these areas is ancillary marijuana stocks. Ancillary cannabis companies are those that support industry growth without touching the actual plant. In the last couple of years, this area has delivered substantial gains for investors and continues to show rapidly growing revenue.
Some of the leading companies in this part of the market supply the cannabis industry with organic nutrients and hydroponic and lighting systems. These companies, are in a position to grow with the cannabis market and delivered significant returns for shareholders in 2020. Now with another pullback in the market, this could be a good time to put these top marijuana stocks on your watchlist in July.
Studying The Cannabis Sector Before Investing
For new investors entering the cannabis market doing your own due diligence and watching how a stock is moving in the market is essential to making good investments. As it stands this could be time to see how the market behaves this week right now many analysts are concerned the market is due for an extreme pullback that could last through the summer.
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So, could top marijuana stocks to buy continue shedding market value? For the most part, the cannabis sector has been consolidating near these low-price points for several months. Although they could pull back further it seems they have been establishing a new bottom. With this in mind, we can start looking at some of the leading ancillary marijuana stocks for your list this week.
Top Marijuana Stocks For Your July Watchlist
- The Scotts Miracle-Gro Company (NYSE:SMG)
- GrowGeneration Corp. (NASDAQ:GRWG)
The Scotts Miracle-Gro Company
Primarily, The Scotts Miracle-Gro, is a leading marketer of branded consumer lawn and gardening products in the US and globally. The company’s wholly-owned subsidiary Hawthorne Gardening is a leading supplier of nutrients, lighting, and hydroponic equipment used for growing cannabis. In its fiscal second quarter of 2021 Hawthorne beat its sales guidance with sales rising 66% year over year to $363.8 million. As a result, Hawthorne’s segment profits increased 74% from the year prior to $41.4 million. For its fiscal second-quarter earnings Scott’s reported sales of $1.8 billion up from $1.38 billion the previous year.
Because Hawthorne is performing so well Scott’s now expects a sales increase of 30-40% for fiscal 2021 in that segment. Scott’s pays an annual dividend of $2.48 per share with a dividend yield of 1.38%. In June Scott’s increased its fiscal 2021 guidance expecting company-wide sales growth in the range of 17%-19%. Next month the company is expected to release its third-quarter financials on Wednesday, August 4th before the opening.
SMG stock closed on July 16th at $180.11 down 9.56% year to date. In April SMG stock set a new 52-week high of $254.34 and has gained 27.08% in its 1-year performance. According to analysts at CNN Business SMG stock has a 12-month median price target of $250.00 per share. This forecast would represent an increase of 38.84% from its last trading price of $180.11. For this reason, SMG stock could be a good addition to your watchlist in July.
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GrowGeneration Corp
GrowGeneration Corp. owns and operates retail hydroponic and organic gardening stores across the US. At the present time, the company has 55 organic garden centers across 12 states and is growing rapidly in key cannabis markets. GrowGen markets and distributes organics, lighting, and hydroponic equipment to assist in the growing process mainly used by cannabis cultivators. Recently for the company’s first-quarter 2021 financials, GrowGen increased revenue by 173% to $90 million. For 2021 Grow Gen raised its revenue guidance to $450-$470 million and an adjusted EBITDA guidance of $54-$58 million.
Recently GrowGen is working on its online presence with the launch of GrowGeneration.com. This is the company’s newly redesigned e-commerce platform. Specifically, the site is a one-stop-e-commerce destination with over 10,000 products ranging from nutrients to lighting technology. In the future, GrowGen is expecting to have 60 gardening centers across 15 states by the close of 2021. In the next five years, the company is expecting to have over 100 locations operating in the US.
GRWG stock closed on July 16th at $38.08 down 5.32% year to date. In February GRWG stock reached a high of $67.75 and has gained 423.08% in its 1-year performance. According to analysts at Tip Ranks GRWG stock has a 12-month average price target of $54.00 per share. This would represent an increase of 41.81% from its last trading price of $38.08. With this in mind, GRWG stock could be one to watch for a good entry point as markets continue to pull back.
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