In this article, we will be looking at the 5 best marijuana stocks to invest in. To see our detailed analysis of the marijuana sector, you can go directly to see the 12 Best Marijuana Stocks to Invest In.
5. Innovative Industrial Properties, Inc. (NYSE: IIPR)
Number of Hedge Fund Holders: 13
Innovative Industrial Properties, Inc. (NYSE: IIPR) is a corporation working on acquiring and managing specialized properties leased to state-licensed operators for regulated medical use of cannabis facilities. Despite not being a company producing marijuana, it is set to benefit from the steadily growing cannabis business since it is the main option for operators who want to scale production, since borrowing capital from banks is not possible because of cannabis being illegal at the federal level. The company ranks 5th on our list of the best marijuana stocks to invest in.
On June 15th, Innovative Industrial Properties, Inc. (NYSE: IIPR) declared its quarterly dividend of $1.4 per share, a 6.1% increase from the prior $1.32 dividend. It will be payable on July 15th. Innovative Industrial Properties, Inc. (NYSE: IIPR) has also acquired properties in Massachusetts, Michigan, and Pennsylvania this May. Innovative Industrial Properties, Inc. (NYSE: IIPR) has estimated that regulated cannabis sales would reach about $45.9 billion by 2025, and this expansion in the business will result in growing demand for cannabis production infrastrucute, which the company can provide readily. Hence, it is set to benefit incredibly from the growth of the cannabis business. In the first quarter of 2021, Innovative Industrial Properties, Inc. (NYSE: IIPR) had an FFO of $1.39 in line with estimates, while its revenue of $42.88 million, up 103.25% year over year, beat estimates by $1.22 million. The company has a gross profit margin of 96.31% and Innovative Industrial Properties, Inc. (NYSE: IIPR) has gained 7.62% in the past 6 months and year to date.
By the end of the first quarter of 2021, 13 hedge funds out of the 866 tracked by Insider Monkey held stakes in Innovative Industrial Properties, Inc. (NYSE: IIPR), worth about $192 million. This is compared to 23 hedge fund holders in the previous quarter, holding stakes worth roughly $317 million.
4. Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM)
Number of Hedge Fund Holders: 14
Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) is a manufacturer and distributor of controlled environment agriculture equipment and supplies in the US and Canada. The company offers plant additives that can be used to grow, farm, and cultivate cannabis as well. It ranks 4th on our list of the best marijuana stocks to invest in.
This June, Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) announced that it would be acquiring Aurora Innovations in a $161 million deal. The stock has also acquired House & Garden in May, which had lead to it surging by 4% in light of the news. In the first quarter of 2021, Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) had an EPS of $0.19, beating estimates by $0.07. The company’s revenue was $111.39 million, beating estimates by $2.62 million, and it has a gross profit margin of 19.47%. The stock has gained 1.44% in the past 6 months and year to date.
By the end of the first quarter of 2021, 14 hedge funds out of the 866 tracked by Insider Monkey held stakes in Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM), worth about $84.3 million. This is compared to 19 hedge fund holders in the previous quarter, holding stakes worth roughly $117 million.
Madison Funds, an investment management firm, mentioned Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM) in its first-quarter 2021 investor letter. Here’s what they said:
“We also initiated a position in Hydrofarm in the first quarter. Hydrofarm distributes lighting, nutrients and grow media for controlled environment agriculture, specifically for the cultivation of cannabis and related products. Hydrofarm’s customers are fragmented. There are over 1,500 hydroponic retailers in the U.S. and Canada. The runway for revenue growth is large as more and more states legalize recreational and medical use cannabis. Today about 60% of the population does not have access to recreational use cannabis which represents a massive growth opportunity.”
3. GrowGeneration Corp. (NASDAQ: GRWG)
Number of Hedge Fund Holders: 18
GrowGeneration Corp. (NASDAQ: GRWG) owns and operates retail hydroponic and organic gardening stores in the US. The company’s products include horticultural, organics, and lighting, and hydroponic items among others, and it ranks 3rd on our list of the best marijuana stocks to invest in.
This May, GrowGeneration Corp. (NASDAQ: GRWG) announced its expansion into the Californian market after it acquired the Harvest Company. The stock also gained 13% in light of three consecutive Buy upgrades in May, from Ladenburg Thalmann, Alliance Global, and Roth Capital. Ladenburg Thalmann gave GrowGeneration Corp. (NASDAQ: GRWG) a price target of $45 with a 27% upside while the other two firms gave price targets of $55 with a 55% upside. In the first quarter of 2021, GrowGeneration Corp. (NASDAQ: GRWG) had an EPS of $0.1, beating estimates by $0.03. The company’s revenue was $90.02 million was up 172.95% year over year and beat estimates by $3.66 million, and it has a gross profit margin of 26.95%. The stock has gained 22.28% in the past 6 months and year to date.
By the end of the first quarter of 2021, 18 hedge funds out of the 866 tracked by Insider Monkey held stakes in GrowGeneration Corp. (NASDAQ: GRWG), worth about $127 million. This is compared to 18 hedge fund holders in the previous quarter, holding stakes worth roughly $142 million.
2. Tilray, Inc. (NASDAQ: TLRY)
Number of Hedge Fund Holders: 21
Tilray, Inc. (NASDAQ: TLRY) is a pharmaceutical company operating in Canada and the US. The company is also involved in the cannabis market and ranks 2nd on our list of the best marijuana stocks to invest in.
Bank of America analyst Heather Balsky seems optimistic on Tilray, Inc. (NASDAQ: TLRY) and its entry into the American market, as she mentioned that the company’s move to add about $4.5 billion of war chest could indicate its preparation for the legalization of cannabis in the US. The analyst reiterated BofA’s Buy rating on the stock, alongside a price target of $21.5 per share, indicating a 20.4% upside. This June, the company also announced SweetWater Brewing’s new product collaboration with Broken Coast Cannabis Ltd., which operates under Tilray, Inc. (NASDAQ: TLRY). This marks the latter’s first cannabis brand introduction in the US. The stock has gained 99.06% in the past 6 months and year to date
By the end of the first quarter of 2021, 21 hedge funds out of the 866 tracked by Insider Monkey held stakes in Tilray, Inc. (NASDAQ: TLRY), worth about $257 million. This is compared to 17 hedge fund holders in the previous quarter, holding stakes worth roughly $47.6 million.
1. Altria Group, Inc. (NYSE: MO)
Number of Hedge Fund Holders: 38
Altria Group, Inc. (NYSE: MO) is a manufacturer of cigarettes, oral tobacco products, and wine in the US. The company’s brands include Marlboro, Black & Mild, Copenhagen, Skoal, Red Seal, and Husky. It has taken a $1.8 billion stake in the cannabis business through investing in Cronos Group Inc. (NASDAQ: CRON), a major multinational Canadian cannabis company, and has added cannabis technology to its portfolio this year, including patented marijuana vaporizers. The company ranks 1st on our list of the best marijuana stocks to invest in.
According to Morgan Stanley this month, Altria Group, Inc. (NYSE: MO) is set to have only an upside after the FTC administrative trial. The firm retained its Overweight rating and $52 price target on the company. In the first quarter of 2021, Altria Group, Inc. (NYSE: MO) had an EPS of $1.07, beating estimates by $0.02, while its $4.88 billion revenue missed estimates by $108.51 million. The company has a gross profit margin of 65.28%. Additionally, the stock has a forward PE ratio of 10.39 and has gained 16.75% in the past 6 months and year to date.
By the end of the first quarter of 2021, 38 hedge funds out of the 866 tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE: MO), worth about $1.1 billion. This is compared to 37 hedge fund holders in the previous quarter, holding stakes worth roughly $1.08 billion.
Oakmark Funds, an investment management firm, mentioned Altria Group, Inc. (NYSE: MO) in their first quarter 2021 investor letter. Here’s what they said:
“We initiated a new position in Altria, which commands roughly 50% of the cigarette and smokeless tobacco market in the U.S. Both of these markets are duopolies that we believe have exhibited strong pricing power over time. While the shares trade at a low multiple of reported earnings, Altria also owns valuable stakes in other non-core businesses, including ~10% of AB InBev, 35% of Juul and 45% of Cronos. Excluding the values of these stakes and their respective earnings contribution, we were able to purchase shares of Altria for less than seven times our estimate of next year’s earnings. This compares to other consumer brands with less favorable earnings growth profiles that trade for three times Altria’s multiple. The company also has several promising reduced-risk products that may appeal to tobacco users, including On! and iQOS. We believe these products position the company well to help consumers slowly transition to a tobacco-free future. We expect management to return the vast majority of future earnings to shareholders given the company’s strong balance sheet, high free cash flow conversion and limited capital requirements.”
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