Best Pot Stocks to Watch for a Bounce

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Pot stocks have endured their worst year yet. Virtually all the cannabis stocks have lost a considerable share of their market value since the start of the year. This is despite some states across the US legalizing marijuana and providing favorable regulations.

However, pot stocks could be set for recovery as the sector is gaining attention from the federal level. Legalizing cannabis at the federal level could lead to a massive boost for the industry and companies operating within it.

For more hot stock watchlists, be sure to visit the Dork’s best cheap stock rankings, including ‘The Best Stocks Under $1’, ‘The Best Stocks Under $5‘, and more.

Latest Cannabis News

The House Judiciary Committee is set to look at the Marijuana Opportunity Reinvestment and Expungement Act (MORE Act) on Wednesday, November 20. The committee chairman, Jerrold Nadler, pointed out a press conference that the current marijuana laws harm individuals and communities of color.

Some states have legalized marijuana, and Nadler believes it is time the criminal prohibitions against marijuana are eliminated at the federal level. This is excellent news for the cannabis industry, leading to some pot stocks recording gains on Tuesday.

The legalization of cannabis at the federal level could be a significant catalyst for pot stocks to perform excellently over the coming months and years as the industry grows bigger.

Three Best Pot Stocks Likely to Bounce

Here are the top three pot stocks likely to recover their value soon.

pot stocks
Aurora is one of the leading producers of Canadian cannabis, but it recently announced that it had to scale back some of its expansions plans. Above: Aurora personnel on a tour at a company cannabis facility.

Aurora Cannabis Inc. (ACB)

Aurora has been one of the worst-performing pot stocks so far this year. It has lost over 55% of its value since the start of 2019, plunging from $5.2 per share to trade at $2.34 at Wednesday’s pre-market session.

Aurora released a poor fiscal 2020 first-quarter results last week, with revenue down by 24% from the previous quarter. They also recorded a 33% drop in sales in Canada during the quarter.

However, the company might bounce back. Aurora is making some moves that could change its affairs over the coming months. The firm has a large segment of convertible debentures that were set to mature soon, but it managed to avoid making a large payment by convincing over 93% of bondholders to convert into Aurora shares. By pushing bondholders towards conversion, Aurora avoided the financial pressure that making a large bond payment would create.

An overview of its yearly figures shows that Aurora’s revenue is still growing at a decent clip, despite its poor performance this year. Aurora is a buzz name stock, so it could lead the rebound if the sector gets going soon.

Cronos Group Inc. (CRON)

Cronos is another leading cannabis stock that has underperformed so far this year. The stock is down by 40% since the start of 2019. However, it could be set to recover after rising by 9.12% during Tuesday’s trading session.

Cronos reported its Q3 earnings on November 12, recording a net revenue of $12.7 million. This represents a 238% growth from the same quarter of 2018. Altria recently added 4 million Cronos shares to its portfolio, representing a big win for the cannabis company.

With an expanding market both in Canada and the US, Cronos’s stock could bounce back if the company records similar growth in revenue over the coming quarters.

CannTrust Holdings Inc. (CTST)

CannTrust Holdings is another cannabis stock that could bounce back after plunging by 84% year-to-date. The stock climbed 2.3% in pre-market trading Wednesday’s, after rising by 5.4% on Tuesday.

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CannTrust slashed 40% of its workforce as part of a downsizing effort to cope with weakening demand. Above: Workers tend to cannabis plants in a CannTrust greenhouse.

CannTrust looks like a value at this price level. Analysts rate CannTrust’s stock as a ‘BUY.’ The firm made some moves to cut costs recently, like reducing its workforce by 40%. After the cannabis sector went nuclear over the summer, CannTrust had to slash its costs to survive. However, CannTrust and other pot stocks might soon turn things around.

More Pot Stocks Alerts

Pot stocks made a lot of money for traders in 2018, however it’s been a different story this year. U.S. legalization is still far off, but it’s a positive when regulators relax their stance towards the industry.

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Hassan Maishera is a cryptocurrency expert and a Stock Dork freelance contibutor.

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