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Buy Canopy Growth Corporation Stock EXCLUSIVE


Zacks' proprietary data indicates that Canopy Growth Corporation is currently rated as a Zacks Rank 3 and we are expecting an inline return from the CGC shares relative to the market in the next few months. In addition, Canopy Growth Corporation has a VGM Score of D (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Valuation metrics show that Canopy Growth Corporation may be overvalued. Its Value Score of F indicates it would be a bad pick for value investors. The financial health and growth prospects of CGC, demonstrate its potential to underperform the market. It currently has a Growth Score of D. Recent price changes and earnings estimate revisions indicate this would be a good stock for momentum investors with a Momentum Score of A.




buy canopy growth corporation stock


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Conventional wisdom says that a PEG ratio of 1 or less is considered good (at par or undervalued to its growth rate). A value greater than 1, in general, is not as good (overvalued to its growth rate). For example, a company with a P/E ratio of 25 and a growth rate of 20% would have a PEG ratio of 1.25 (25 / 20 = 1.25). A company with a P/E ratio of 40 and a growth rate of 50% would have a PEG ratio of 0.80 (40 / 50 = 0.80). Traditionally, investors would look at the stock with the lower P/E and deem it a bargain. But when compared to its growth rate, it does't have the earnings growth to justify its P/E. In this example, the one with the P/E of 40 is the better bargain because it is selling at a discount to its growth rate. So the PEG ratio tells you what you're paying for each unit of earnings growth.


A stock with a P/E ratio of 20, for example, is said to be trading at 20 times its annual earnings. In general, a lower number or multiple is usually considered better that a higher one. Value investors will typically look for stocks with P/E ratios under 20, while growth investors and momentum investors are often willing to pay much more. Aside from using absolute numbers, however, you can also find value by comparing the P/E ratio to its relevant industry and its peers.


Cash is vital to a company in order to finance operations, invest in the business, pay expenses, etc. Since cash can't be manipulated like earnings can, it's a preferred metric for analysts. Using this item along with the 'Current Cash Flow Growth Rate' (in the Growth category above), and the 'Price to Cash Flow ratio' (several items above in this same Value category), will give you a well-rounded indication of the amount of cash they are generating, the rate of their cash flow growth, and the stock price relative to its cash flow.


While earnings are the driving metric behind stock prices, there wouldn't be any earnings to calculate if there weren't any sales to begin with. Like earnings, a higher growth rate is better than a lower growth rate. Seeing a company's projected sales growth instantly tells you what the outlook is for their products and services. As a point of reference, over the last 10 years, the median sales growth for the stocks in the S&P 500 was 14%. Of course, different industries will have different growth rates that are considered good. So be sure to compare a stock to its industry's growth rate when sizing up stocks from different groups.


Leading up to legalization, investors were excited about the potential that the cannabis market would offer. However, despite years of legalization now, many of these companies in the industry, including one of the industry leaders, Canopy Growth (TSX:WEED)(NASDAQ:CGC), have struggled to turn a profit. But as the industry continues to consolidate, and WEED stock trades mighty cheap right now, is Canopy the best growth stock to buy for 2022?


There are several high-potential Canadian stocks to buy in 2022, but in my opinion, considering the risk to reward, Brookfield Infrastructure Partners (TSX:BIP.UN)(NYSE:BIP) is the best growth stock to buy this year.


The U.S. cannabis industry is estimated to have a TAM (total addressable market) of more than $50 billion. This presents a huge opportunity for the cannabis stock. Canopy growth will potentially hold the leading market share in the U.S. upon federal approval and unlock significant value for its shareholders.


At the time of publication, Borchardt had no positions in any securities mentioned.","articleImageUrl":"//s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/cc9a7ae5-b5c9-11e8-b0bf-4b98b02d7c87.jpg","isExternalContributor":false,"publishDate":new Date(1601665724000),"primaryAuthorUrl":"/author/2814565/debra-borchardt/all.html","siteName":"Real Money","mediumThumbUrl":"//s.thestreet.com/files/tsc/v2008/photos/contrib/uploads/cc9a7ae5-b5c9-11e8-b0bf-4b98b02d7c87_300x240.jpg","leadTicker":"[\"CGC\",\"STZ\",\"ACRHF\",\"ACRDF\"]","categoryName":"RealMoney.com","publishDateFormatted":"2020-10-02T15:08:44.000Z","compactPubDate":"3:08 PM","numPages":1,"subcategoryName":"US Equity - RM ","lastPublishDate":"2020-10-02T15:08:44.000-0400","pages":"0":"number":1,"pageTitle":"Here's How to Make Sense of the Canopy Growth, Acreage Deal - RealMoney","isLastPage":true,"body":" If you thought the original Canopy Growth (CGC) and Acreage Holdings (CSE:ACRG.U) deal was confusing, hold onto your hats because the amended deal is a doozy. The two companies recently changed the terms of the original acquisition because valuations have changed dramatically and both of the original leaders are no longer there. Original Deal First, let's start with the original deal. Back in April 2019 (which feels like another lifetime) Canopy Growth said it was acquiring Acreage in a deal valued at $3.4 billion. In actuality, there was no price placed on the deal, but the figure was calculated based on share prices at the time. Once the shareholders and the Canadian Supreme Court approved the deal, Acreage Holders would immediately receive a payment of US$300 million or approximately US$2.55 per Acreage Subordinate Voting Share. While there were many moving parts to this acquisition, the biggest issue was the \"triggering event.\" The acquisition wouldn't take place until the U.S. federally legalized cannabis. This could happen a year from now or five years from now. Perhaps cannabis is only decriminalized and remains a highly scheduled drug? It's a big question mark. Plus, these companies are based in different countries with varying levels of shareholder ownership and voting rights. Add in the inclusion of Constellation Brands (STZ) , which is a major stakeholder in Canopy and it becomes more complicated. Jonathan Sherman and Jamie Litchen, partners at Cassels Brock who acted on the Acreage transaction for Canopy Growth, said at the time, \"Canopy Growth's acquisition of Acreage Holdings is the most complex M&A transaction completed in decades. In this deal, one company has conditionally acquired another to be able to operate outside of a jurisdiction whereby the product or service would be considered legal.\" Deal Excitement Cools The original deal was agreed to by Bruce Linton, who was Canopy's CEO at the time and was very interested in acquiring U.S. assets. However, shortly after Linton was fired from Canopy in July 2019. An unnamed source says that once Linton was out of the picture at Canopy, there was little appetite for the Acreage deal. This is completely understandable as Canopy had its own problems to solve, much less take on a U.S. company and its issues as well. In December 2019, Canopy appointed its new CEO David Klein, who faced a mountain of work ahead of him to navigate the company through an landscape of market right sizing. In 2020, the company has written down millions of dollars in losses and has laid off over 500 employees. It has shuttered two facilities in British Columbia and taken a loss on $132 million worth of obsolete inventory. Acreage Holdings also has taken some time to pivot in its strategy. Early in the company's history, the goal was to be the biggest cannabis company with the most states under its belt. That was all fine and good when the access to capital was easy. However, investors began to tighten the purse strings and the strategy was no longer working. Making a profit became the new rallying cry. Underperforming assets have been sold and the company has adopted what has proven to be a winning strategy in cannabis -- zero in on specific markets where there are a lot of customers and the competition is manageable. New Green Deal Once Klein had Canopy on the right path, he could turn his focus to Acreage. Rather than back out of the deal, Canopy offered a new solution to what is now a radically different cannabis business environment. CEO Kevin Murphy left his position, but remains on the board and is still a major shareholder in the company. Instead of paying the shareholders $300 million, they would now get $37.5 million (approximately $0.30 per Existing Share on an as-converted basis). The money went directly to them and not to Acreage itself. Canopy would now only buy 70% of the company at a fixed price, but the remaining 30% would be allowed to move with the market. The idea behind the floating shares was that the Canopy shareholders should be able to participate in any upside in the stock, should that happen. Canopy can decide to buy these shares if the triggering event happens or they decide to waive that condition. The original symbol for Acreage on the OTC Markets Group was ACGRF. There are now two new symbols (ACRHF) , which are the fixed shares and (ACRDF) , which are the floating shares. ACRGF: Old symbol. Delisted. No longer trading. ACRHF: Fixed shares. 70% of Acreage that Canopy is obligated to buy at 0.30xx. ACRDF: Floating shares. 30% of Acreage that Canopy has the option to buy at 30-day VWAP (volume-weighted average price) or $6.42, which is higher. For now, the new shares are listed in the pink sheets at the OTC as new paperwork is prepared and approved. They are expected to move back into the higher OTC market groups. Further complicating the two share classes is that it seems retail investors prefer the fixed shares. They are assured that Canopy will buy these shares. The floaters are only an option to buy. Retail buyers fear Canopy could change its mind and not buy the other 30%. However, analysts have been covering the floating shares for their basis of valuation. So, when an investor reads an analyst report, it is based on the floaters not the fixed shares. It also looks like the relationship is back on track. The two companies have said they are going to roll out a new beverage line in the summer of 2021. It will combine the product expertise from Canopy with the reach of Acreage in the U.S. As so many deals in cannabis have ended in acrimony, it might be a lesson for much smaller cannabis companies on how to salvage a deal where both parties still benefit. It is certainly creative thinking for the financial world. 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