AUS
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UAE
Highlights
- The S&P/TSX Cannabis Index is down 30.25 on a year-to-date (YTD) basis
- US senators from both sides of the political divide have lately been pushing for the SAFE Banking Act to pass
- All these stocks are on the rebound
The year 2022 has not been very good for equities in general. In such copy times, with inflation high and a rise in interest rates expected, many investors tend to take away money from stocks and put them in more stable fixed-return investments.
The Canadian cannabis sector is particularly hit this year. The S&P/TSX Cannabis Index is down 30.25 on a year-to-date (YTD) basis.
That said, US senators from both sides of the political divide have lately been pushing for the SAFE Banking Act to pass. This should allow cannabis companies to access banking services.
Should it pass, the sector might see revival. So, let’s look at some TSX-listed pot stocks.
Canopy Growth Corp (TSX:WEED)
Canopy Growth’s stock closed at C$7.78 Tuesday, May 3. It has lost 29.5 per cent this year.
WEED’s 52-week low of C$6.48 came on April 28 and it is currently about 20 per cent above that.
The stock has fallen to this range on multiple occasion this year but has not gone lower. The stock has rebounded 14 per cent in a week.
The company has been experiencing loss so its price-to-earnings (P/E) ratio is in negative territory.
Also read: NGEX, CRE, AMX, NFG & AFM: 5 TSXV mining stocks to buy in May?
Tilray Inc (TSX:TLRY)
Tilray’s stock closed at C$6.65 Tuesday, just 8.66 per cent above its 52-week low of C$6.12 seen on March 15.
TLRY has gained four per cent this week and is in the green by over two per cent on a week-to-date (WTD) basis.
TLRY’s P/E ratio is 13.3, which essentially represents the dollars invested to earn one dollar. It is the only stock on this list with a positive P/E ratio.
Aurora Cannabis Inc (TSX:ACB)
ACB closed Tuesday at C$3.87 and recently saw its 52-week low of C$3.58 on April 28. It is just eight per cent higher.
ACB has recovered three per cent in a week. However, it is down 43.5 per cent YTD.
It is also experiencing loss and has a negative P/E ratio.
Also read: RY, TD, BNS, BMO & CM: 5 TSX bank stocks as equity markets turn bearish
Organigram Holdings Inc (TSX:OGI)
OGI has recovered nearly three per cent in a week and closed Tuesday at C$1.84. It is down 17 per cent in 2022.
The stock’s one-year low was on March 14 when it touched C$1.65. It is 11.5 per cent above that now.
OGI’s P/E ratio is in the red by 17.
Cronos Group Inc (TSX:CRON)
CRON closed Tuesday at C$3.94 and it has recovered six per cent in the past week.
On April 28 it sunk to C$3.65, a new 52-week low. It is currently eight per cent higher. CRON has lost 21 per cent this year.
Also read: PRO, NXR, TCN, DRM & MRG: 5 TSX property stocks to buy before its late
Bottom line
Passage of the SAFE Banking Act may bode well for Canadian marijuana stocks and perhaps revive the sector. All the above stocks are on the rebound and are available for purchase at prices close to their 52-week lows as seen in the graphic.
These are some of the biggest cannabis companies on the TSX going by market cap and even of the healthcare sector. However, it should be noted, that the sector has seen volatility.
Also read: How does current inflation compare to 1970s stagflation?
Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
