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2 “Strong Buy” Cannabis Stocks That Show Monster Growth
Investors have been drawn to growth companies over the past year, and one segment that is growing is the young cannabis industry. The sector offers a unique proposal and the prospect for further growth, as there is still a major catalyst on the horizon that will completely change the industry. As expected, a Democratic Senate was good news for those at the federal level reforming marijuana; And it looks like the expected changes may happen faster than initially expected. Supported by Senate Majority Leader Chuck Schumer, Democratic Senators have said they will seek to legalize marijuana at the federal level, promising a one-time discussion paper on [cannabis] reform ”in the first half of this year. The statement meets expectations that the Democratic congressional majority will pass – and that President Biden will sign – a bill to legalize marijuana. Investors are also looking at further legislative movements at the state level; one important state in this regard is New York. So the cannabis industry is looking up. There is a growing network of state legislative regimes and expectations of a change in federal policy; both put pressure on cannabis stocks. Against this background, we used TipRanks’ database to find two cannabis stocks that were tagged as’ Strong Buys’ by the analyst’s consensus. Both have delivered impressive annual achievements and will rise even more in the coming year. Village Farms International (VFF) We will start with Village Farms International, a business that has long been involved in the niche farming industry. The business started as a farmer and has been producing greenhouse vegetables in the North American market all year round. This background suits the company well for a transition to the marijuana industry – Village Farms has experience in greenhouse production and growth on an industrial scale. Village Farms’ shares show a tremendous growth profile that has risen by 327% over the past twelve months, with a strong rise in recent days. Two important news have caused the boom since the end of January. First, the company repaid the $ 15 million debt it incurred during the acquisition of the cannabis cultivation company Pure Sunfarms in full – ahead of schedule. And second, Village Farms increased its investment in Asian cannabinoid company Altum by 50% to own a 10% stake in the company. The move increases the international reach of Village Farms, and the ability to increase Altum’s holdings in the future. The company was able to finance these moves because it had a successful share sale in January, placing another 10.8 million shares on the market and raising US $ 135 million in new capital. In addition to its strong capital and expansion positions, Village Farms reported good financial results. The company generated US $ 43 million in revenue for 3Q20, a year-on-year profit of 12.5%. The EPS was 1 cent per share, a reversal of the $ 0.10 loss in the previous quarter. 5-star analyst Eric Des Lauriers, who specializes in Village Farms for Craig-Hallum, writes: “Village Farms has clearly established itself as the leading cannabis producer in Canada with the largest trading share and leading profitability. Sales of Canadian cannabis in 2020 to October (latest available) increased by 128% year-on-year, and the number of pharmacies will accelerate to 2021, thus providing a headwind to VFF revenue. As for the U.S. markets, and VFF’s position in Canada’s larger neighbor, the analyst says: ‘With 5.7 million SF greenhouses in TX, the company also has a real U.S. option, which ultimately goes to the GA. election is appreciated by investors. . VFF has historically been undervalued compared to less profitable counterparts, but we expect equities to continue to work … as the outlook for US reform increases during the year. For this purpose, Des Lauriers VFF is considering a buy, and its price target of $ 25 indicates that the stock has room for ~ 26% upside down in the coming year. (To see Des Lauriers’ record, click here. Overall, there have been three recent reviews on VFF shares, and all are Buys, which gives the stock a consensus rating from the strong buy analyst and a general agreement with Wall). Street shows the strengths of the company, shares are priced at $ 19.90, and the average price target of $ 24.33 implies an increase of ~ 23% for the coming year. (See VFF stock analysis on TipRanks ) TerrAscend Corporation (TRSSF) The next cannabis stock we are looking at, TerrAscend, is another major cannabis producer in both the US, Canada and Europe, the company is involved in both the medical and recreational side of the market, both cultivating and producing cannabis and markets a range of products under numerous brands.TerrAscend’s US operations are located in California, Pennsylvania, New Jersey and Utah, and the company wants to expand as more states legalize cannabis.In a strong sign of the strength of d ie cannabis industry, TRSSF shares have risen 624% over the past twelve months. Growth was fueled by the expansion of California and Pennsylvania cultivation operations, and by the transition to the New Jersey adult entertainment market. Last month, TerrAscend closed an unmediated stock sale that put more than 18 million common shares on the market. The sale price was C $ 12.35 (US $ 9.72) and the offer earned C $ 224 million (US $ 176.3 million). The bulk of the proceeds – about 80% of the total – were invested by four major institutional investors in the US. The funds raised will be used to continue the company’s breeding operations (TRSSF plans to expand growth and manufacturing operations in New Jersey), as well as to continue mergers and acquisitions. TerrAscend’s rapid growth and strong future prospects have attracted the attention of top-rated analysts, including five-star analyst Eric Des Lauriers of Craig-Hallum (mentioned above). “TerrAscend is a leading multi-state operator (MSO) in the US cannabis market with top-level management, assets and access to transaction flows. We have been positive towards the company since the start of coverage last year and say the TRSSF team gladly exceeded our expectations, “and the rapid margins are increasing and the leverage they deserve has a solid place at the top level of MSOs,” said Des Lauriers. “The analyst summed up,”[With] US $ 280 million + raised since the election and the federal reform moving faster than expected, we think TRSSF deserves a premium from peers. “In line with his positive comments, Des Lauriers shares TRSSF shares a buy, and has a price target of $ 20 which has a ~ 31% upside potential for the next 12 months. Once again we are looking at a share with broad agreement from Wall Street analysts – Strong Buy’s consensus rating is unanimous, based on 7 recent reviews, shares sell for $ 15.30 and their recent valuation has almost raised the price to the average price target of $ 15.43 (see TRSSF Stock Analysis on TipRanks) To find great ideas for selling cannabis stocks at attractive valuations, visit TipRanks ‘best-selling stocks, a newly launched tool that unites all the insights of TipRanks’ equity Disclaimer: Opinions what is stated in this article is solely that of the analysts who appear in it.The content is intended to be used for information only.It is very important to do your own analysis before making any investment.