…To take advantage…[of] another potential upswing in the market, we have selected five cannabis companies, which analysts believe are undervalued. The Canadian marijuana stocks on our list today currently have 100% upside on average according to analysts, indicating that these stocks could post strong returns in the near-term.
The original article has been edited here for length (…) and clarity ([ ]) by munKNEE.com – A Site For Sore Eyes & Inquisitive Minds – to provide a fast & easy read.
1. ICC Labs Inc. (TSXV:ICC)
ICC Labs is a producer of recreational and medical cannabis operating in Uruguay and Colombia. The Company operates ~90,000 sq. ft. of indoor production and 66 acres of outdoor hemp production, at higher CBD to THC ratios than Canadian producers. The Company sells dried cannabis and cannabinoid oil products. ICC plans to dramatically expand production, adding an additional ~400,000kg/year of dried cannabis production and 250 acres of hemp production.
- Market Cap: $202.0 Million
- Average Price Target: $3.26
- Number of Analysts: 3
- Price Upside: 132.9%
2. Harvest One Cannabis Inc. (TSXV:HVT)
Harvest One Cannabis is a producer of medical marijuana licensed under the ACMPR. The Company’s production subsidiary currently produces 1,000 kg/y at its BC facility, and plans add a further 10,000 kg/y at two new facilities in BC and Saskatchewan. Satipharm, its distribution subsidiary, produces cannabis-based microgel capsules, primarily for distribution in Europe.
- Market Cap: $167.2 Million
- Average Price Target: $2.50
- Number of Analysts: 2
- Price Upside: 123.2%
3. WeedMD Inc. (TSXV:WMD)
WeedMD is a Canada-based producer of medical marijuana. The Company expects to produce ~21,000 kg/y at its two facilities by April, with future expansion plans at current sites could potentially increase production to 33,000 kg/y. WeedMD also plans to diversify, beginning the sale of cannabis oils and cannabinoid-infused beverages.
- Market Cap: $194.5 Million
- Average Price Target: $4.27
- Number of Analysts: 3
- Price Upside: 121.4%
4. Invictus MD Strategies Corp. (TSXV:GENE)
Invictus MD Strategies is a Canada-based licensed producer of marijuana. The Company currently produces 600kg out of its Acreage Pharms facility. The Company has funded production facilities capable of producing 15,000 kg/year, to be operational by the end of 2018. Invictus plans to reach 50,000 kg/year by 2022.
- Market Cap: $149.9 Million
- Average Price Target: $3.05
- Number of Analysts: 2
- Price Upside: 63.1%
5. Emblem Corp. (TSXV:EMC)
Emblem is a licensed producer of medical marijuana under the ACMPR. The Company currently produces 5,000 kg/y of dried cannabis and plans to add a further 17,000 kg/year by Q1 2019. Emblem also plans to launch its cannabinoid oil product in Q3 2018. Emblem aims to build relationships with retail partners in Canada and abroad.
- Market Cap: $153.8 Million Canadian
- Average Price Target: $2.30
- Number of Analysts: 5
- Price Upside: 62.0%
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
Related Articles From the munKNEE Vault:
As recreational legalization of marijuana in Canada approaches this summer, these companies have plans to meet the upcoming demand. If marijuana continues its rally, the Canadian marijuana stocks on our list could see strong returns in both the short and long term.
The top spot in the Canadian cannabis industry belongs to Canopy Growth Corp. but some competitors, such as Aurora Cannabis Inc., have the scope, scale, and differentiation to take on the market leader. Of these two which stock is more attractive?
Today we will be comparing the current and future prospects of Aurora Cannabis and Aphria Inc. – the only two companies with the scope, scale, and differentiation to take on Canopy Growth.
Due to the early stages of the cannabis industry and its growth prospects, investors have not expected cannabis companies to generate positive earnings. Instead they have valued the stocks primarily on hope for a lucrative future. That being said, however, we have identified 4 Canadian cannabis stocks that are expected to generate positive earnings in the next 12 months. If they live up to their earnings expectations, it could begin a time when investors look for companies with sustainable growth prospects, as opposed to those that are expected to have the highest short-term revenue growth.
Like technology, the battery metals and cannabis sectors have upside attached to secular trends that are changing our world. As a result, all of these sectors are poised to continue expanding at rapid rates.
Being able to sell products at a high margin is a good sign of efficiency. Doing so leaves more cash to dedicate to other expenses and service debt obligations. Identifying undervalued companies with strong gross margins in the young marijuana industry is important, given the upcoming Canadian legalization of marijuana for recreational purposes in 2018. Today we have identified 4 Canadian marijuana stocks that have underperformed their peers despite healthy gross margins.
Investing in marijuana-related stocks is a high-risk, high-reward game due to all the uncertainties surrounding the legalization of the drug. Companies that do succeed, however, have potential to bring large capital gains. That being said we have identified five Canadian marijuana stocks with the biggest upside potential, according to consensus analyst price targets.
Identifying companies with high gross margins in the young marijuana industry is important because operating costs are likely to decrease as the industry matures, leaving these companies with high earnings potential. Today we have identified five Canadian marijuana stocks with gross margins well above their industry peers.
The search is now on for the next junior marijuana stock that is ripe for acquisition. Will it be one of the 5 we’ve identified based upon their high revenue growth profiles?