Our top cannabis stock picks

We see these three companies as undervalued and best positioned to capture opportunities in a growing market

Kristoffer Inton 11 July, 2019 | 3:05PM

 

 

Note: This video is part of Morningstar Canada's Cannabis Week Special Report

Kristoffer Inton: Our three top picks are Canopy Growth, Aurora Cannabis and Curaleaf. We see all three of those as undervalued at this time. I think that all three give you good exposure to what we see as a lot of growth coming in the market. For Canopy, it gives investors exposure to the huge remaining growth that come in Canada as well as the exposure to the U.S. through the acquisition of Acreage Holdings. So, we see its geographic footprint as being very attractive. And then, on top of that, we seem them potentially becoming a leader in the consumer packaged cannabis space. So, with all those Canopy looks pretty good.

I think, then, Aurora is also an attractive name. Aurora right now appears to be a little more focused on its production when compared to Canopy but shares look undervalued to us. And then, in addition, their expiration for finding a strategic partner that all the other cannabis companies currently have, is an opportunity for another valuation catalyst to come.

And then, lastly, Curaleaf also looks undervalued to us. Curaleaf will give an investor a pure U.S. exposure and again, U.S. is the biggest and will be the fastest-growing cannabis market in our view. And so, any company that can give you that exposure at a good discount as we see in Curaleaf, we view as very attractive.

 

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Aurora Cannabis Inc6.74 USD-1.54
Canopy Growth Corp34.85 USD-1.80
Curaleaf Holdings Inc10.49 CAD2.94

About Author

Kristoffer Inton

Kristoffer Inton  Kristoffer Inton is an equity analyst for Morningstar, covering gold, coal and cement companies. Before joining Morningstar in 2013, he was an investment banking associate for Guggenheim Securities in New York. He holds a bachelor’s degree in finance with high honours from the University of Illinois.