While the broad market enjoyed a powerful upmove yesterday, the marijuana sector was even stronger, with the Marijuana Index surging 15%.
Key to that move was Aurora Cannabis (ACB), whose quarterly report brought in the first real wave of buying in the stock since it peaked at 100 over a year ago.
I’m not going to move back into ACB yet. A true uptrend has not yet been established in the stock, and even more important, Canadian stocks as a whole continue to lag U.S. stocks.
But yesterday’s big moves are reason enough for a quick review of all our stocks—and next week you’ll get the full monthly issue.
Short-term, my general advice is this: Try to own the leaders (as opposed to ex-leaders like HEXO, ITHUF, OGI and MMNFF). Try to buy on pullbacks, when the news is bad, and take profits at times like this, when the news is good. And try to diversify enough so that your fortunes aren’t tied to just one or two of these stocks. With a two-year bear market in the rear-view mirror, the future is bright for this sector!
Aphria (APHA) Aphria was once competing neck-and-neck with Aurora for leadership of the Canadian market. When this service started, I bought both. But now Aphria has twice Aurora’s revenues. The stock, however, has been flat for the past two months. If you don’t own it, you could buy a little. BUY.
Canopy Growth (CGC) Canopy is now second to Aphria in revenues, but still has great prospects thanks to major shareholder and alcohol giant Constellation Brands (STZ). The stock looks a little better than APHA—and it’s our largest position of the Canadians. BUY.
Cresco Labs (CRLBF) Chicago-based Cresco is one of the top five marijuana companies in the U.S., and its stock looks fine, though it’s not as strong as the strongest (see below). BUY.
Cronos Group (CRON) Back in Canada, Cronos is one of the smaller Canadian marijuana providers, and while the company is growing nicely, the stock has been weak. We sold half our position last week, so CRON is now our smallest position. HOLD.
Curaleaf Holdings (CURLF) Massachusetts-based Curaleaf released an excellent quarterly report yesterday (details in next week’s issue), claiming second place in the U.S. revenue race. The stock has been very strong, and while it may cool off in the short term, there’s no question that the future is bright. We averaged up last week and this is now the portfolio‘s largest position. BUY.
Green Thumb Industries (GTBIF) Headquartered in Chicago, Green Thumb is the U.S. leader at the moment, breaking the $100 million per quarter barrier with its quarterly report of last week. Like CURLF, the stock has been very strong, so it may cool off a bit. The portfolio averaged up last week. BUY.
GrowGeneration (GRWG) GrowGeneration released an excellent quarterly report last week (revenue grew 152% from the year before to $33 million) and the stock looks strong, though a bit overextended. We averaged up last week. BUY.
Innovative Industrial Properties (IIPR) IIPR used to be the only publicly traded REIT in the U.S. that caters to the cannabis industry. But now there’s a new one, Power REIT (PW), which used to be focused on energy and is now switching to cannabis. PW trades on the AMEX and is smaller and lower quality. IIPR has been building a nice base since March. BUY.
Tilray (TLRY) Based in British Columbia, Tilray’s chart looks a lot like IIPR’s, as well as the other quality Canadian producers. BUY.
Trulieve (TCNNF) Trulieve is not only the market leader in Florida, it’s also a contender for biggest seller of marijuana in the entire U.S.—and its stock is as strong as the other very strong U.S. market leaders, so vulnerable to a pullback. The portfolio averaged up last week. BUY.
Turning Point Brands (TPB) TPB is the slowest-growing company in the portfolio, and also the oldest, adding a bit of “conservative” weight to the group. The stock has been basing for months and can be bought here. BUY.