4 Marijuana Penny Stocks That Investors Will Either Love Or Hate Today
Whether you love or hate the stock market, penny stocks are one of the top equity classes for high risk/reward. With this in mind, it’s also promising to look at certain sectors that can produce big momentum. This could come even with the slightest bit of positive news. Case in point, the marijuana sector is jumping pre-market. That’s thanks to better than expected earnings results from Canopy Growth (CGC Stock Report).
The leading marijuana stock jumped 20% during premarket trading on Friday. This came as Canopy reported a quarter-over-quarter increase in revenue of over 60% to $123.8CAD million. This ended up setting a bullish tone for many marijuana penny stocks at the end of the week. Whether or not that continues next week is yet to be seen.
However, after the rough year, most pot stocks had in 2019, this is a welcome piece of news and gives some hope for the beleaguered industry. With so much love in the air, will some of these pot penny stocks be on your watch list today?
Marijuana Penny Stocks To Watch:
Organigram Holdings
The first cannabis company on this list of penny stocks, Organigram Holdings (OGI Stock Report) shot up pre-market on Friday. Though it didn’t have any news, the cannabis industry is one to watch when one of the market leaders release positive news. In response to Canopy’s update, Organigram jumped on sympathy from CGC stock. Earlier this year the company was able to secure a supply agreement with Medical Cannabis by Shoppers Drug Mart.
“We are extremely proud to partner with Shoppers and believe that our complementary approach to the medical cannabis market will offer the full strength of our combined national networks to Canadian patients,” says Tim Emberg, Senior Vice President of Sales and Commercial Operations. Analysts have also reacted favorably to the company’s progress.
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Jefferies & Co increased its price target to $5.50 CAD from $5 CAD. Raymond James and PI Financial also hold ratings on the pot stocks. The former holds OGI stock at “Outperform” with a $9CAD target. The latter maintains a Buy rating and $7CAD target.
Marijuana Penny Stocks To Watch:
Hexo Corp
Another pot penny stock benefitting from Canopy’s news is Hexo Corp (HEXO Stock Report). This month, HEXO stock hit new 52-week lows of $1.22 as the sector slide continued. However, today’s news could breathe some new life into the company. Despite the positive move today, it’s important to take a step back from the hype and understand some of the fundamentals as well. Hexo isn’t necessarily the angel of cannabis right now.
Amid numerous C-level shake-ups, some have eyed Hexo CEO Sebastien St-Louis as next to go under fire. While I don’t necessarily agree, I don’t disagree either. The long and short of the matter is that having such an asset like Molson-Coors (TAP) as a JV partner and not capitalizing on it is a problem. Truss, the JV beverage company is live. But it’s up in the air to see how it performs amid “Cannabis 2.0” officially launching. Meanwhile, we see more downgrades and price targets cut this quarter.
Now that the industry is entering a more mature phase, fundamentals matter. So it will be interesting to see how Hexo performs in Q1 and Q2 of this year. Can it turn things around? In any case, the marijuana penny stock is climbing on Friday for the time being.
Marijuana Penny Stocks To Watch:
Aurora Cannabis
Next, Aurora Cannabis (ACB Stock Report) has managed to crawl out of the depths of all-time lows as well. The company that just lost its CEO managed to attract favor in the market. This may simply be a very basic example of a cheap stock benefiting from sector news.
Furthermore, though it’s the most popular penny stock on Robinhood right now, corporate performance has lacked in a major way. Unlike Canopy, Aurora’s earnings were horrible. Aurora Cannabis reported a net loss of about 1.3 billion Canadian dollars (US$980 million) for its fiscal second quarter. On top of that, the company explicitly said it expects low to no growth for the immediate future.
[Read More] Penny Stock Aurora Cannabis (ACB) Spooks Market; CEO Departs
Aurora also reported a 500-person layoff, capital expenditure reductions to roughly $100 million CAD and restructuring of its debt. The big question mark is can its interim CEO, Michael Singer lay the groundwork for a turnaround?
Marijuana Penny Stocks To Watch:
New Age Beverages
Finally, New Age Beverages (NBEV Stock Report) has actually been performing well this week even before the Canopy news release. Earnings aren’t immediately around the corner with March 27 being the e/r date. Yet on Thursday, shares started to take off during the middle of the afternoon. Additionally, there weren’t any new filings posted either.
The most recent SEC filing shows BlackRock, Inc. holding a 6.8% position in the marijuana penny stock. Needless to say, shares have continued to surge on Friday as most marijuana stocks did. Something to note was that on February 13, a Cannabis Food & Beverage market report was published by research firm The Insight Partners.
New Age Beverages was one of the companies mentioned in the analysis. Besides that, there hasn’t been much more by means of marijuana stock news from NBEV. This week, shares reached new 2020 highs as New Age is one of the better-performing marijuana stocks this year.
