Ever since a record number of states legalized marijuana in the 2016 elections, we’ve been pounding the table on the huge opportunities in the cannabis sector.
And today, we’re going to show you one of the best marijuana stocks to buy now for 177% profit.
Since 2016, 11 states and the District of Columbia have fueled the market with fully legal pot for recreational purposes. Thirty-three have made it legal with a medical prescription. In total, that’s a lot of marijuana fueling the best pot stocks to buy now.
The research firm Meticulous Research forecasts that the weed market will grow at an astonishing rate, more than 28% annually, each year between now and 2025.
If you’re counting, that means the market will be worth $75.6 billion by the time the 2020s are half over.
So savvy investors are looking grab top marijuana stocks before the industry soars.
That doesn’t mean pot stocks don’t fluctuate up and down.
Recently, the marijuana sector has witnessed tremendous volatility.
But growing pains are natural in budding industries, especially one as competitive as this one.
That’s why it’s time to focus on the future. We have our eyes set on 2020, and we’ve already picked our top pot stocks to watch.
Our proprietary Money Morning Stock VQScore™ system helps with this. It screens the universe of stocks for those with high profit potential. Then it assigns each one a rating: 4.9 is the highest, and 1 is the lowest.
Those with nil profit potential don’t make it to the screen. In fact, most pot stocks don’t make it to the VQScore system, because most of them have operated in the red up to now.
The highest scorers are not only profitable, but have rapidly rising profits.
And there’s good news: Our top marijuana stock to buy just got a perfect score. It’s the first pot stock to do this in the history of the VQScore.
In other words, it’s the equivalent of receiving a rating of “Strong Buy.”
Here’s why analysts give our best pot stock a 177% growth target for next year…
The Best Marijuana Stock to Buy Now
The marijuana stock with a perfect 4.9 VQScore is Cronos Group Inc. (NASDAQ: CRON).
Right now, at a share price of $9, CRON is trading at bargain prices – over 50% below its highs of the winter.
There’s nothing like scary news stories to topple a stock.
As many people might know, the U.S. Centers for Disease Control and Prevention (CDC) is currently keeping watch on a number of acute lung disease cases that have spread throughout 33 states. At least 450 cases have been reported.
The causes aren’t clear, but the reported cases seem to center around vaping products. As a result, marijuana stocks like CRON have been hard-hit.
But we think that CRON’s products are not likely involved, so the share price action could be misplaced.
The CDC’s investigations are centered around products produced at home from black market materials, not legal products bought over the counter. Not only that, but most of them seem to be happening in illegal marijuana states.
Some of those hospitalized have said they purchased THC e-liquids illegally to create products. They bought from unlicensed, under-the-table vendors because of pot’s illegality.
That’s why we believe that the problem for CRON itself is perception, not reality. Perceptions are hard to change, especially since the problem is ongoing.
There’s no question, though, that the lower share price has created a very good deal for investors, especially those who didn’t catch the first round of weed stock profits.
Cronos’ Strong Strategic Plan
CRON is approaching its future with a strategy. It doesn’t intend, for instance, to water down shareholder equity with a secondary shares offering. That distinguishes it from many of its weed company peers.
CRON management is targeting partnerships with large players that are synergistic with its products. Case in point: The early 2019 deal with Altria Inc. (NYSE: MO), a large maker of cigarettes. MO now owns 45% of CRON, for which it ponied up $1.8 billion cash.
The money gives CRON management more ability to look around for more strategic buys and strengthen its market share.
Altria, for its part, is a great marketing partner with the capability to expand CRON’s brand globally.
The strategy doesn’t end there, though. Oversaturation of product is a danger for weed companies, just because of the gold rush nature of the business over the last several years.
CRON, however, is targeting the cannabidiol (CBD) space, intending to be a market leader.
Oversaturation of product can lead to a squeeze on profit margins. CRON is focusing on a CBD product network, which allows margins to be higher. Its network is made up of contractors.
As a result, CRON’s own profit picture has changed from a loss in 2018 to robust profits in 2019. Last year, the company lost $14.6 million.
In the first and second quarter of 2019, it made $323 million and $187 million in profit.
For the last quarter, the company enjoyed a revenue boost of 120% year over year.
Wall Street analysts are looking for revenue to rise 283% in 2019, to more than $60 million.
The strategic focus and the great profit picture make CRON one of the best marijuana stocks to buy now.
The stock price forecast is for $25 at the end of 2020, versus the current $9 price. That’s a potential upside of 177% in just over 12 months.
Source: Money Morning