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Welcome to Episode #381 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Stock Strategist and the editor of Zacks Marijuana Innovator newsletter, Ben Rains, to discuss the pot stocks. Pot stocks were the hottest thing around 5 years ago but after catching a bid during the pandemic, the stocks have now plunged to multi-year lows.
Are there any deals among the stocks? Or are they traps?
Canopy Growth is a North American cannabis and consumer packaged goods company. Its brands include Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth has a market cap of $476 million.
Shares of Canopy Growth have plunged 75% year-to-date and are down 96% over 5-years. It doesn’t have a P/E because it has negative earnings.
With a stock under $1.00, is Canopy Growth a value or a trap?
Constellation Brands is a global beer, wine and spirits company that has had an investment in Canopy Growth for several years. However, Constellation Brands has been reducing that investment.
Shares of Constellation Brands are up 1.4% year-to-date and 22% over the last 5 years. It pays a dividend, yielding 1.5%. Constellation has a forward P/E of 20.
Is Constellation Brands a value or a trap?
4. Innovative Industrial Properties, Inc. (IIPR - Free Report)
Innovative Industrial Properties manages specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. It is a REIT which owns 108 properties across 19 states. It has a market cap of $2.2 billion.
Shares of Innovative Industrial Properties are down 21% year-to-date but remain up 44.2% over the last 5 years. After the recent sell-off, shares are cheap. Innovative Industrial Properties trades with a forward P/E of 8.9.
Innovative Industrial Properties pays a big dividend, currently yielding 9%. It had increased that dividend by 6% over the prior 12 months through the end of September. In the third quarter, rent collection was 97% through Sep 30, 2023.
Is Innovative Industrial Properties a value or a trap?
Jazz Pharmaceuticals bought GW Pharmaceuticals in 2021. GW Pharma had a cannabidiol drug called Epidiolex. In the third quarter of 2023, Jazz Pharmaceuticals said Epidiolex is being positioned to achieve blockbuster drug status with multiple launches ongoing and anticipated outside of the US through 2024.
Shares of Jazz Pharmaceuticals are down 25% year-to-date and are down 10.5% over the last 5 years. It trades with a forward P/E of just 6.5. Jazz Pharmaceuticals does not pay a dividend.
Is Jazz Pharmaceuticals a value or a trap?
What Else do you Need to Know About the Pot Stocks?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of IIPR in her personal portfolio. Ben owns shares of STZ and IIPR in the Marijuana Innovator.]
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Pot Stocks: Values or Traps?
Welcome to Episode #381 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds, and ETFs and how it impacts your life.
This week, Tracey is joined by Zacks Stock Strategist and the editor of Zacks Marijuana Innovator newsletter, Ben Rains, to discuss the pot stocks. Pot stocks were the hottest thing around 5 years ago but after catching a bid during the pandemic, the stocks have now plunged to multi-year lows.
Are there any deals among the stocks? Or are they traps?
Pot Stocks: Values or Traps?
1. Canopy Growth Corp. (CGC - Free Report)
Canopy Growth is a North American cannabis and consumer packaged goods company. Its brands include Doja, 7ACRES, Tweed, and Deep Space. Canopy Growth has a market cap of $476 million.
Shares of Canopy Growth have plunged 75% year-to-date and are down 96% over 5-years. It doesn’t have a P/E because it has negative earnings.
With a stock under $1.00, is Canopy Growth a value or a trap?
2. Tilray Brands, Inc. (TLRY - Free Report)
Tilray Brands is a cannabis-lifestyle and consumer packaged goods company selling 20 brands in 20 countries. It has a market cap of $1.3 billion.
Shares of Tilray are down 33.5% year-to-date. Over the last 5 years, it has fallen 97%. Tilray also doesn’t have a P/E as it has negative earnings.
With a stock price under $2.00, is Tilray a value or a trap?
3. Constellation Brands, Inc. (STZ - Free Report)
Constellation Brands is a global beer, wine and spirits company that has had an investment in Canopy Growth for several years. However, Constellation Brands has been reducing that investment.
Shares of Constellation Brands are up 1.4% year-to-date and 22% over the last 5 years. It pays a dividend, yielding 1.5%. Constellation has a forward P/E of 20.
Is Constellation Brands a value or a trap?
4. Innovative Industrial Properties, Inc. (IIPR - Free Report)
Innovative Industrial Properties manages specialized properties leased to experienced, state-licensed operators for their regulated cannabis facilities. It is a REIT which owns 108 properties across 19 states. It has a market cap of $2.2 billion.
Shares of Innovative Industrial Properties are down 21% year-to-date but remain up 44.2% over the last 5 years. After the recent sell-off, shares are cheap. Innovative Industrial Properties trades with a forward P/E of 8.9.
Innovative Industrial Properties pays a big dividend, currently yielding 9%. It had increased that dividend by 6% over the prior 12 months through the end of September. In the third quarter, rent collection was 97% through Sep 30, 2023.
Is Innovative Industrial Properties a value or a trap?
5. Jazz Pharmaceuticals plc (JAZZ - Free Report)
Jazz Pharmaceuticals bought GW Pharmaceuticals in 2021. GW Pharma had a cannabidiol drug called Epidiolex. In the third quarter of 2023, Jazz Pharmaceuticals said Epidiolex is being positioned to achieve blockbuster drug status with multiple launches ongoing and anticipated outside of the US through 2024.
Shares of Jazz Pharmaceuticals are down 25% year-to-date and are down 10.5% over the last 5 years. It trades with a forward P/E of just 6.5. Jazz Pharmaceuticals does not pay a dividend.
Is Jazz Pharmaceuticals a value or a trap?
What Else do you Need to Know About the Pot Stocks?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns shares of IIPR in her personal portfolio. Ben owns shares of STZ and IIPR in the Marijuana Innovator.]