Now That the Bottom is Finally In, These Oversold Pot Stocks Could Make Attractive Investments
Some of These Cannabis Stocks Are Undervalued While Others Are Headed for the Pot Stock Cemetery
The word on weed street says the bottom is in and most experts are in agreement. After multiple failed bottoming attempts, cannabis stocks roared back to life last week with many pot stocks posting 20% – 60% weekly gains. The major rebound was supported by a huge surge in volume, the largest volume increase since April of this year when the cannabis market was topping out.
Taking a look at the chart of industry bellwether Canopy Growth (TSX: WEED) (NYSE: CGC), things are looking good from a technical standpoint which support the idea of the bottom finally being in. Fundamentally speaking, Canopy recently posted another poor earnings report which featured a massive $374.6 million second-quarter loss. Despite Canopy’s weak Q2 earnings which saw revenue decline and miss analysts’ expectations, the consensus amongst investors is that the worst is over for the number one Canadian licensed producer (LP).
Bank of American analyst Christopher Carey backed that idea after he upgraded Canopy’s stock from ‘Neutral’ to ‘Buy’ last week citing that “the worst looks over and, if momentum returns, the market may again contemplate what Canopy could become.” However, the BofA analyst maintained his $24 per share price target on the stock as Carey believes Canopy remains a “show me story.”
With Canada’s legalization 2.0 now in effect and the sale of cannabis beverages, edibles, extracts and vapes set to begin in December of this year, Canopy is now in a position to start earning a return on its large cannabis 2.0 investments. On Monday, Canopy announced it secured its Health Canada licence for its 150,000 sq ft beverage facility and has now received all the necessary cannabis 2.0 licences to move forward with the sale of cannabis drinks, vapes and edibles next month.
The BofA Canopy upgrade combined with stronger than expected earnings from top U.S. multi-state operators (MSO) like Trulieve (CSE: TRUL) (OTCQX: TCNNF), Green Thumb (CSE: GTII) (OTCQX: GTBIF) and Curaleaf (CSE: CURA) (OTCQX: CURLF) helped push pot stocks to its largest weekly gain in the second half of 2019.
Now that the odds are in our favour regarding the cannabis market being at its bottom, investors can now begin to cast their lines into the choppy waters as bottom fishing season is officially underway. One of the best baits for bottom fishing is the technical indicator called the relative strength index (RSI).
Read Here: How to Use the RSI Technical Indicator to Time Your Marijuana Stock Trades
Cannabis investors can use the RSI indicator as a tool to search for cannabis stocks that are oversold and possibly undervalued due to extreme and overdone selling pressure. One important piece of advice, just because a stock is oversold doesn’t mean its undervalued. Some of the oversold pot stocks on our list below are possibly undervalued while others are likely on their way to bankruptcy. It’s up to you to distinguish which stocks are a great value and which ones are headed for the pot stock cemetery.
Without further delay, let’s jump right into our list of the top 20 most oversold cannabis stocks.
- Current Share Price: $20.24
- YTD ROI: -71.09%
- RSI: 41.45
- Q3 Earnings
Learn more about Tilray: Website | IR Website | Investor Deck | TLRY Chart
19. Cronos Group (TSX: CRON) (NASDAQ: CRON)
- Current Share Price: $9.15
- YTD ROI: -34.5%
- RSI: 41.08
- Q3 Earnings
Learn more about Cronos Group: Website | IR Website | Investor Deck | CRON Chart
18. Aleafia Health (TSX: ALEF) (OTCQX: ALEAF)
- Current Share Price: $0.65
- YTD ROI: -55.17%
- RSI: 40.48
- Q3 Earnings
Learn more about Aleafia Health: Website | IR Website | Investor Deck | ALEF Chart
17. Cresco Labs (CSE: CL) (OTCQX: CRLBF)
- Current Share Price: $7.45
- YTD ROI: -19.46%
- RSI: 40.42
- Q3 Earnings
Learn more about Cresco Labs: Website | IR Website | Investor Deck | CL Chart
16. Ignite International Brands (CSE: BILZ) (OTCQX: BILZF)
- Current Share Price: $1.78
- YTD ROI: -40.27%
- RSI: 39.40
- Earnings
Learn more about Ignite: Website | IR Website | Investor Deck | BILZ Chart
15. The Green Organic Dutchman (TSX: TGOD) (OTCQX: TGODF)
- Current Share Price: $0.76
- YTD ROI: -68.98%
- RSI: 39.39
- Q3 Earnings
Learn more about TGOD: Website | IR Website | Investor Deck | TGOD Chart
14. Charlotte’s Web (CSE: CWEB) (OTCQX: CWBHF)
- Current Share Price: $13.01
- YTD ROI: -15.46%
- RSI: 39.36
- Q3 Earnings
Learn more about Charlotte’s Web: Website | IR Website | Investor Deck | CWEB Chart
13. Medipharm Labs (TSX: LABS) (OTCQX: MEDIF)
- Current Share Price: $3.85
- YTD ROI: +129.17%
- RSI: 38.92
- Q3 Earnings
Learn more about MediPharm: Website | IR Website | Investor Deck | LABS Chart
12. Namaste Technologies (TSXV: N) (OTCQB: NXTTF)
- Current Share Price: $0.35
- YTD ROI: -55.13%
- RSI: 38.77
- Q3 Earnings
Learn more about Namaste: Website | IR Website | Investor Deck | N Chart
- Current Share Price: $0.76
- YTD ROI: –76.25%
- RSI: 38.74
- Q3 Earnings
Learn more about MariMed: Website | IR Website | Investor Deck | MRMD Chart
10. SOL Global (CSE: SOL) (OTCPK: SOLCF)
- Current Share Price: $0.44
- YTD ROI: -80.18%
- RSI: 37.83
- Q1 Earnings
Learn more about SOL Global: Website | IR Website | Investor Deck | SOL Chart
9. Aurora Cannabis (TSX: ACB) (NYSE: ACB)
- Current Share Price: $3.36
- YTD ROI: -49.78%
- RSI: 36.82
- Q1 Earnings
Learn more about Aurora Cannabis: Website | IR Website | Investor Deck | ACB Chart
- Current Share Price: $100.43
- YTD ROI: +4.43%
- RSI: 36.24
- Q3 Earnings
Learn more about GW Pharma: Website | IR Website | Investor Deck | GWPH Chart
7. Green Growth Brands (CSE: GGB) (OTCQB: GGBXF)
- Current Share Price: $1.16
- YTD ROI: -75.32%
- RSI: 35.06
- Q1 Earnings
Learn more about Green Growth Brands: Website | IR Website | Investor Deck | GGB Chart
6. CannTrust Holdings (TSX: TRST) (NYSE: CTST)
- Current Share Price: $1.10
- YTD ROI: -83.13%
- RSI: 34.85
- Earnings
Learn more about CannTrust: Website | IR Website | Investor Deck | TRST Chart
5. Harvest One (TSXV: HVT) (OTCQX: HRVOF)
- Current Share Price: $0.21
- YTD ROI: -47.5%
- RSI: 33.69
- Q1 Earnings
Learn more about Harvest One: Website | IR Website | Investor Deck | HVT Chart
4. Emerald Health (TSXV: EMH) (OTCQX: EMHTF)
- Current Share Price: $0.44
- YTD ROI: -84.83%
- RSI: 31.02
- Q2 Earnings
Learn more about Emerald Health: Website | IR Website | Investor Deck | EMH Chart
3. TerrAscend (CSE: TER) (OTCQX: TRSSF)
- Current Share Price: $3.40
- YTD ROI: -42.57%
- RSI: 28.56
- Q3 Earnings
Learn more about TerrAscend: Website | IR Website | Investor Deck | TER Chart
2. 48North (TSXV: NRTH) (OTCPK: NCNNF)
- Current Share Price: $0.345
- YTD ROI: -44.35%
- RSI: 22.69
- Q1 Earnings
Learn more about 48North: Website | IR Website | Investor Deck | NRTH Chart
1. MedMen (CSE: MMEN) (OTCQX: MMNFF)
- Current Share Price: $0.58
- YTD ROI: -85.28%
- RSI: 19.04
- Q4 Earnings
Learn more about MedMen: Website | IR Website | Investor Deck | MMEN Chart
Also Read: Cannabis Stocks Drop Amid Concerns Over FDA’s Most Recent Round of CBD Warning Letters
Charts source: Barchart.com
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