Is Now The Time To Invest In Top Cannabis Stocks?
Is this a good time to invest in the top marijuana stocks to watch? With the market in a downtrend leading cannabis stocks have taken a significant hit in the market. For the past three months, the marijuana sector has made its way back to trading near December 2020 levels. For the most part, the cannabis sector has now been consolidating at its current levels for quite some time.
One of the worst-hit parts of the sector has been Canadian marijuana stocks. After climbing to new highs in February they have sustained the steepest declines in market value. In the US cannabis companies have fared far better than Canadian companies. As it stands US cannabis companies are delivering strong revenue growth and some have also become profitable. Spearheaded by mergers and acquisitions marijuana companies are expanding quickly across the US.
In addition, the cannabis industry keeps growing as new states legalize different forms of marijuana and decriminalize cannabis. From an investor standpoint, large revenue gains could produce higher market values in the future. Currently, strong earnings are not having an effect on the best cannabis stocks to buy. It seems like the only potential marijuana sector catalyst this year is federal cannabis reform and legalization.
Future Catalysts For The Cannabis Market
But investors are becoming more optimistic about the chances of cannabis reform happening in 2021. On Capitol Hill, it seems both parties are becoming more inclined to pass some form of legislation this year. In truth, if top marijuana stocks would climb back to the highs in February investors would have significant returns from current positions.
For this reason, we can do some further research into some possible investments in pot stocks. It’s important as an investor to do your due diligence on a company before investing. Understanding how a company is performing and how the stock moves in the market can help you achieve better gains.
With marijuana stocks trading much lower than recent highs there could be an upside in both the US and Canadian cannabis stocks. Because of this, we will do some research into companies in both separate markets. With some upward momentum in the top marijuana stocks, these could be additions to your watchlist right now in May.
Marijuana Stocks To Watch
Ayr Wellness Inc.
In the past few years, Ayr Wellness Inc. has been expanding rapidly into key markets across the US cannabis market by way of M&As. Recently the company opened 3 new retail locations in the state of Florida where it now has the fourth-largest dispensary presence. Now in Florida the company has 35 dispensaries in the state and a total of 51 stores nationally. In its most recent earnings, AYR’s full-year 2020 revenue was $47.8 million. Additionally, Ayr also provided guidance for 2022 which includes a target revenue of $725 million.
Last month Ayr celebrated this 4/20 with record sales of $1.24 million for the day and over 14,200 transactions. On May 26th Ayr is expected to release its first-quarter 2021 results after the close. On may 18th the company opened its 35th dispensary in Homestead/Florida City and will be the first dispensary to open in the area. By the end of 2021 Ayr expects to have 42 stores in the state alone.
AYRWF stock is trading at $27.49 heading into the close on May 20th up 13.58% year to date. In February the stock set a new high of $37.50 per share. According to analysts at Tip Ranks AYRWF stock has a 12-month average price target of $46.00 per share. In essence, this would be a 67.48% increase from current levels. With this in mind, AYRWF stock is a top marijuana stock to add to your watchlist for next week.
OrganiGram Holdings Inc.
In Canada, OrganiGram Holdings Inc is a leading licensed producer of cannabis and cannabis-derived products. Specifically, the company produces high-quality, indoor-grown cannabis for both the medicinal and recreational markets. Additionally, OrganiGram continues to develop its international business partnerships which contribute to its global market share. Unfortunately, in its latest second-quarter 2021 earnings, the company missed earnings estimates.
The company saw a net revenue decline year over year of 37% to $14.64 million. Although the company reported a loss for the quarter it did produce 62 new stock-keeping units since July 2020 as a revamping process. OrganiGram is taking advantage of the Canadian market’s growth with the addition of the derivatives market. In Canada, the number of retail stores is increasing significantly on a weekly basis. On May 18th the company launched Big Bag o’ Buds an indoor-grown strain-specific dried flower in 28g format.
OGI stock closed on May 20th at $2.67 up 98.50% year to date. In February OGI stock set a high of $6.45 per share and is up 5.18% in the last five days. According to analysts at Market Beat OGI stock has a consensus price forecast of $4.41 per share. This would be a 63.4% increase from current price points. If your investing in Canadian cannabis stocks OGI stock could be a top marijuana stock to watch going into next week.