Top rated 4 medical marijuana stocks recommended by analyst in 2019. See which cannabis companies you need to BUY and SELL right now.

If you’re thinking about making an investment in one or more cannabis manufacturers, you should take a look at some of the stock reports that independent analysts have published on these companies. Much of the research has resulted in sell ratings, although a few companies have more positive ratings. We’ve done the research for you, and here are the results:

GW Pharmaceuticals

First up is GW Pharmaceuticals. This British company trades on the Nasdaq under the ticker symbol GWPH. It manufactures Epidiolex, a cannabis-based medicine that treats epilepsy. Another GW medicine manufactured from hemp is Sativex, which treats multiple sclerosis.


GW Pharmaceuticals Stock Chart


ValuEngine is a stock analyst that follows GW Pharmaceuticals. Its latest stock report grades GW a strong buy. This rating is unusual, especially in the cannabis industry. ValuEngine has consistently graded the company a buy or strong buy since November 2018.

ValuEngine cites GW’s strong showing in EPS growth, 5-year return, and its low price ratios (P/E and price-to-sales). GWPH also has shown very low volatility on the stock market, which is another plus. The company’s price-to-sales ratio is lower than both its sector and industry, and its market cap is larger than both.

As for future predictions, ValuEngine ranks GW very high on its 1-year price forecast scale. One-year momentum also has GW very high on the list.

ValuEngine provides price targets for GWPH. Its 1-month forecast for the stock is $178.67. At three months, ValuEngine predicts a price of $180.55. At six months out, the analyst expects a level around $188. The 1-year target is $203. For some reason, the analyst thinks the price will drop to $199 at two years out, and then climb back up to $204 at the three-year mark. GWPH’s most recent price was $172.57.

One weakness that GWPH has right now, according to ValuEngine, is that the stock is overvalued compared to many of its peers.


Constellation Brands

Constellation Brands is mostly an alcohol company, producing the very famous Corona Extra. However, it does have a large stake in Canopy Growth Corporation, a major player in the marijuana industry. Investing in Constellation would be an opportunity to tap into a mildly diversified portfolio.


Constellation Brands Stock Chart


Constellation has a buy rating from Argus. The analyst is bullish on the stock over 1-year and 5-year periods. The current price of STZ is $166, and Argus’s price target is a very ambitious $210. This is actually $50 lower than Argus’s previous target. Constellation Brands currently pays a dividend of $2.96 per common share, which makes the stock even more attractive.

To justify its buy rating, Argus points to Constellation’s strong earnings history. Specifically, gross sales rose 9%, and adjusted EPS went up 18%. The increase in EPS was above Wall Street’s expectations.

Constellation’s impressive figures include $7.9 billion in annual revenue, a price-to-sales ratio of 3.39, a price-to-book ratio of 2.69, and a market cap of $27 billion. Its beta is 0.76, which shows lower than average volatility.

Weaknesses that Argus is concerned about include lower guidance from Constellation, which has recently published a lower EPS forecast. The original was $9.60 to $9.75. Now, it is $9.20 to $9.30. Argus is also concerned about a possible slowdown in the spirits industry.

Argus sees Constellation’s acquisitions of other companies to be a positive sign of its growth potential. Besides the large list of alcohol companies Constellation has acquired, Argus noted an upcoming drinkable cannabis product that Constellation will market along with Canopy.


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A Possible Short: Tilray

Bulls make money, bears make money, and pigs get slaughtered. That’s an old saying on Wall Street for good reason. To make money, you don’t need to buy a stock. You can take a short position instead if you think the share price is headed down.


Tilray Stock Chart


CFRA rates Tilray a sell. If the analyst’s judgment is correct, shorting TLRY on the Nasdaq would lead to profits. CFRA views Tilray’s financial health and growth prospects as negative. The stock analyst grades the company’s quality, valuation, and street sentiment as all neutral. Only its price momentum is positive, according to CFRA.

Tilray specializes in medical marijuana. The company was established only in 2018 and has sales in many countries around the world. As for the stock, so far, it’s not very impressive. There is no dividend currently. CFRA reports negative earnings in the last three quarters. This is certainly a bad sign as it shows an inability to turn a profit.

CFRA also sees problems with cash flow and EPS growth as reasons to maintain its bearish rating. The stock analyst also believes that the company’s P/E ratio, EBITDA, and price-to-cash flow are all problematic.


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Another Possible Short: Aurora Cannabis

TheStreet.com gives Aurora Cannabis (trading on the NYSE as ACB) a grade of D+, which is a sell rating. The analyst cites several weaknesses in the weed company, including low return on equity, lackluster operating cash flow, and weakening net income.


Aurora Cannabis Stock Chart


Besides the letter grade, TheStreet also gives stocks multiple star ratings across several categories. Aurora gets 1½ stars (out of 5) for growth, another grade of 1½ for efficiency, and just a half star for income. ACB does not currently pay a dividend, which explains the low grade on income.

Despite these abysmal grades, Aurora did get 4 stars out of 5 for total return. This category measures the stock price, which has been pretty good since 2016, another sign that it may be a good time for a short sale. TheStreet also notes that ACB has a history of underperforming both the pharmaceuticals industry and the S&P 500.

As for hard numbers, Aurora’s net operating cash flow has dropped by more than 1270% from the previous quarter, definitely not a good sign.


Where to Find Stock Reports

If you want to trade weed stocks based on analyst recommendations, you can usually purchase reports directly from the analysts. Some analysts may provide free trials directly on their sites. Alternatively, it’s possible to get reports at no cost from several brokerage firms. For example, we found free stock reports in our TD Ameritrade, Merrill Edge, Schwab, and Fidelity accounts.


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