This has not been a kind year to cannabis investors. Despite favorable growth in early spring, almost all marijuana stocks have lost value since the start of the year. For some of the biggest names in the industry, the fall has been cataclysmic.
The king of the cannabis castle, Canopy Growth Corporation (TSX:WEED) (NYSE:CGC), peaked in April at $69.90 and is currently down 70% from there. After its most recent quarterly losses were twice as high as predicted, the company's stock just hit a record low.
In January, shares for Tilray Inc. (NASDAQ:TLRY)—arguably the prince of pot stocks—hit a high just over $100.00. Now you can buy TLRY shares for $20.00, and that might not even be the bottom.
But it's not all doom and gloom for marijuana stocks. A bunch of companies just reported their quarterly earnings, giving investors a chance to compare reports and realign their portfolios accordingly.
If you're holding shares in a company that's not showing profit, or a strong potential for profit, don't throw good money after bad. Take a look at some of these marijuana stocks that are actually in the green, and consider what's in store for 2020.
Marijuana Stocks to Watch: MediPharm Labs
On November 12, MediPharm Labs Corp. (TSX:LABS) (OTCQX:MEDIF) reported strong Q3 earnings. For the period ending September 30, the company made $43.4 million in revenue. That's a 38% increase from the previous quarter, which was also highly profitable.
Gross profit was $14.8 million, and adjusted EBITDA came out to $10.1 million, representing 31% quarterly growth. Net income before tax was $5.4 million.
The best thing about MediPharm's report, though, is the investment in future growth. Some marijuana stocks need to scrimp and save in order to turn a profit, but LABS is in the green even as it improves production capacity and prepares a global growth strategy.
Specifically, the company is making moves in Australia and Europe, building sales networks, and signing export agreements. Not only do these moves indicate that next quarter could be even more profitable, it also sets MediPharm up for long-term advantages in foreign markets.
Though it's trending downward this month, LABS is up 121.11% from the start of the year.
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Marijuana Stocks to Watch: Aphria
Last month, Aphria Inc (TSX:APHA) (NYSE:APHA) affirmed its place near the head of the industry with its Q1 2020 earnings report.
For the period ending August 31, Aphria made $126.1 million in revenue. That figure represents an incredible 849% increase from Q1 last year, though a 2% decline from the previous quarter.
Adjusted EBITDA was a modest $1 million, meaning Aphria turned a profit for its second consecutive quarter.
Less modest than its recent earnings is the company's 2020 forecast. Like MediPharm, Aphria is anticipating growth in its cannabis revenue driven by a greater production capacity and additional international sales. Analysts add that the company is better positioned to profit from Cannabis 2.0 than almost any competitor.
As a result, the company's guidance for revenue in 2020 is a staggering $650–700 million, with adjusted EBITDA around $88–95 million.
APHA stock is down 28.22% from the start of the year, and 58.8% from its peak price of $14.41 in February. Analysts are calling APHA the best bargain in the sector.
Marijuana Stocks to Watch: KushCo
It's easy to forget that not all cannabis companies are cultivators and retailers.
KushCo Holdings (OTCQB:KSHB) produces ancillary products and services for the cannabis and CBD industries. Since its founding in 2010, the company has sold a billion units to growers, processors, and producers across North America, South America, and Europe.
For its Q4 2019 fiscal results, Kushco reported a 135% year-over-year increase in net revenue. Its quarterly sales of $47 million actually make it the sixth-best-selling company in the sector.
On top of that, its guidance for 2020 predicts steady revenue growth to somewhere between $230 and $250 million. About 10% of that will reportedly come from the company's recently announced hemp trading business.
Though KSHB shares have lost 70% value from the beginning of 2019, its recently reported results indicate a turning point for the company. Next year might just see KSHB achieve its true potential.
2020 is just around the corner. When the new year gets here, make sure you're not still making the mistakes of 2019. Do your research and invest in the marijuana stocks that will work for you.
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Featured image: DepositPhotos © yellow2j
