Analysis originally distributed on May 19, 2017 By: Michael Vodicka of Cannabis Stock Trades
First-quarter earnings season is almost over.
And the cannabis sector has been knocking it out of the park.
A lot of the stocks that we have covered over the last few months have stepped up and delivered excellent results.
Let's take a closer look.
In terms of pure growth, the best report I've seen came from Aurora Cannabis (ACBFF), one of the largest medical cannabis companies in Canada
Revenue jumped 2,500% from the same period last year to $5.2 million and was up 33% from just last quarter.
Aurora added that sales growth is accelerating - currently at $2 million per month. Click here if you want to take a look at the full report.
Fellow Canadian medical cannabis company Aphria (APHQF) also reported awesome results. Revenue grew 91% from the same period last year.
And keep in mind, Cannabis is about to become fully legal in Canada. Analysts are predicting this could be a $23 billion annual market almost immediately. Demand is going to be off the charts and I expect Aurora and Aphria to be there to capture it.
In fact, just yesterday, Aphria received regulatory approval to triple its production capacity. Clearly Aphria is looking to capitalize on the tidal wave of coming coming down the pike. Read the full story here.
I'm also seeing good earnings news in the United States.
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GrowGeneration (GRWG) sells cultivation equipment and supplies to the cannabis industry. That includes hydroponic equipment, lighting systems and organic nutrients and soil.
Growgen was founded in 2008. Today it owns eight stores in Colorado, one in California and one in Nevada.
I did a full write up on Growgen on April 5th if you want to take another look.
Growgen just reported awesome first quarter results that blew past expectations.
Revenue was up 68% from the same period last year to $2.6 million.
Looking forward, Growgen has plans to continue its national expansion.
Growgen is expanding its business in California, Nevada, Michigan, Massachusetts, Maine and the state of Washington.
In the first quarter, Growgen added markets in California and Nevada. In the second quarter it plans to expand into Washington, Michigan and New England.
All factors considered, Growgen is expecting sales to almost double to $15 million in 2017.
These Results show that the Cannabis Industry is Healthy
These impressive results area bullish signal for the cannabis sector. I don't see any other industry delivering this kind of sales growth.
This important to remember right now because the cannabis sector has been struggling through a bear market.
The MJIC North American Cannabis Index is down more than 20% from its 2017 high and still searching for support.
Chart courtesy of MarijuanaIndex.com
In the short run, some of the weakness in the cannabis sector has been frustrating for new investors. That's completely understandable. Expectations for cannabis stocks are running high.
However, this little blast of weakness is also creating an opportunity - for current and prospective cannabis investors.
It's a chance to buy shares low. And that's actually been pretty rare in the cannabis sector. These stocks have been trading at all-time highs for most of the last 12 months. It can be intimidating to buy a stock sitting on a 200% gain in six months.
If you've been waiting for a bargain in cannabis stocks, this is the opportunity you've been waiting for.
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Enjoy,
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Michael Vodicka |
Disclosure: Michael Vodicka owns shares of Aphria (APHQF).
The information contained in this post is for informational and educational purposes only. The trading ideas and stock selections represented on the Cannabis Stock Trades website are not tailored to your individual investment needs. Readers and members are advised to consult with their financial advisor before entering into any trade. Cannabis stocks carry a certain level of risk and we accept no responsibility for any potential losses. All trades, patterns, charts, systems, etc. discussed are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher.
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