It was going to happen. Even though many of the top marijuana stocks based in Canada get coverage there, there had been little major Wall Street coverage here in the United States. That has started to change, as many analysts are not only covering the sector, but they have Buy ratings on some of the hottest companies.
Needless to say, the marijuana industry now is sort of like the beginning of the dot-com era in the mid-1990s. It is entirely possible that some of the companies in the mix now could be long-gone in five or 10 years. It is also very possible that some of the top companies could be huge home runs for aggressive investors.
Every week here at 24/7 Wall St. we cover stocks priced under $10. This week, in a special report, we cover cheap marijuana stocks that also have Buy ratings from top analysts. These five picks look like solid players in the industry.
This company has made a string of acquisitions to grow the scale of its overall business and saw industry-leading sales in the first quarter. Aurora Cannabis Inc. (NYSE: ACB) produces and distributes medical cannabis products. It is vertically integrated and horizontally diversified across various segments of the cannabis value chain, from facility engineering and design to cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale and retail distribution.
The company’s products consist of dried cannabis and cannabis oil, CanniMed vegan capsules and hemp products, as well as sells vaporizers, consumable vaporizer accessories and herb mills for using herbal cannabis products. It also operates CanvasRX, a network of cannabis counseling and outreach centers, and it provides cannabis analytical product testing services.
Jefferies has a Buy rating and recently raised the price target from C$12 to a C$14, or about US$10.36. The shares traded at $8.31 apiece in New York on Friday’s close.
This could be an off-the-radar play for investors looking for a marijuana play with lower name recognition. CannTrust Holdings Inc. (NYSE: CTST) produces and distributes pharmaceutical-grade medical cannabis products in Canada. It sells dried cannabis and oil extractions to clients based on the medication documentation provided by health care practitioners. The company has a partnership with Gold Coast University Hospital.
CannTrust also focuses on developing nanotechnology to create new products in the medical, recreational, beauty, wellness and pet markets. In addition, the company recently completed a successful secondary offering, and management noted in late April that it expects to report strong first-quarter results.
Merrill Lynch started coverage on the shares Friday with a Buy rating and an $11 price target. The shares closed at $5.72 on Friday.
This is another popular stock in the fast-expanding marijuana/cannabis segment. Hexo Corp (NYSE: HEXO) is a diversified company, selling a portfolio of cannabis and related products. The company is based in Quebec, where it is a preferred supplier to the province’s provincial cannabis purchaser. The company also has national distribution, with plans to expand internationally.