Largest Cannabis Sector Stocks On A Roller Coaster -

Largest Cannabis Sector Stocks On A Roller Coaster

Nov 07, 2023Jeremy ParkinsonFinance0

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The 5 largest constituents in munKNEE’s Canadian Cannabis LPs Index and the 7 stocks in munKNEE’s American Cannabis MSOs Index together were DOWN 18% during the last week of October only to jump UP 13.8% last week. Talk about volatility!

Stock Performances
Below are the performances of the constituents in each index for last week, in descending order, and for the previous week along with each stock’s price-to-earnings (P/E) ratio, forward-price-to-sales ratio (PSR), and enterprise value-to-earnings before interest, taxes, depreciation and amortization (EV/EBITDA) ratio to provide a comparative valuation of each, where applicable. A definition of each ratio is at the end of the article.

Canadian Cannabis LPs Index

Canopy Growth (CGC): UP 23.5% last week; No change the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.8
EV/EBITDA ratio: Negative

Organigram Holdings (OGI): UP 16.0% last week; DOWN 6.5% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.0
EV/EBITDA ratio: Negative

Tilray Brands (TLRY): UP 11.7% last week; DOWN 7.1% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.6
EV/EBITDA ratio: 21.2 (High – sector mean is 12.4)

Aurora Cannabis (ACB): UP 11.4% last week; DOWN 2.2% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.1
EV/EBITDA ratio: 26.7 (High – sector mean is 12.4(

Cronos Group (CRON): UP 8.1% last week; DOWN 0.6% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 9.0 (High – above the sector mean of 3.5)
EV/EBITDA ratio: Negative

LP Stock Performance Summary
Index Average: UP 12.5% last week, DOWN 3.9% the previous week but still DOWN 47.3% YTD.

American Cannabis MSOs Index

Trulieve Cannabis (TCNNF): UP 24.2% last week; DOWN 23.0% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 0.8
EV/EBITDA ratio: 5.4

Green Thumb (GTBIF): UP 15.6% last week; DOWN 15.1% the previous week

Forward Price Earnings (P/E) ratio: 55.7 (High – sector median of 18.4)
Forward Price-to-Sales Ratio (PSR): 2.2
EV/EBITDA ratio: 8.4

Curaleaf Holdings (CURLF): UP 11.2% last week; DOWN 24.3% the previous week

Forward Price Earnings (P/E) ratio: 124.6 (High – sector median of 18.4)
Forward Price-to-Sales Ratio (PSR): 1.7
EV/EBITDA ratio: 11.4

Verano Holdings (VRNOF): UP 9.5% last week; DOWN 26.6% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.3
EV/EBITDA ratio: 5.6

TerrAscend Corp. (TSNDF): UP 6.6% last week; DOWN 15.6% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 1.4
EV/EBITDA ratio: 10.9

The Cannabist Company (CBSTF): UP 5.3% last week; DOWN 50.0% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 0.3
EV/EBITDA ratio: 8.4

Cresco Labs (CRLBF): UP 2.6% last week; DOWN 24.7% the previous week

Forward Price Earnings (P/E) ratio: No earnings
Forward Price-to-Sales Ratio (PSR): 0.5
EV/EBITDA ratio: 6.1

MSO Stock Performance Summary
Index Average: UP 14.1% last week and DOWN 21.4% the previous week and still DOWN 10.3% YTD.If you are interested in the cannabis category, consider:

the AdvisorShares Pure US Cannabis ETF (MSOS) which was UP 12.2% last week and DOWN 21.6% the previous week and/or

the Global X Cannabis ETF (POTX), which consists of the above 5 highlighted Canadian stocks plus another 12 cannabis or cannabis-related (i.e. auxiliary) stocks, was UP 11.8% last week and DOWN 4.4% the previous week.

Understanding Valuation Metrics
To evaluate these companies, investors often look at several key ratios:

The price-to-earnings (P/E) ratio compares a company’s share price to its earnings per share, providing a measure of relative value. A high P/E ratio could mean that a company’s stock is overvalued, or that investors are expecting high growth rates in the future. The mean forward P/E ratio for the Health Care/Pharmaceuticals sector is 18.4.

The price-to-sales ratio (PSR) indicates the price paid for a share relative to the revenue that share generates, helping assess if a stock is valued appropriately. The mean forward PSR for the EDA Software Sector is 2.5 and is considered excellent when the value falls below two (2). The mean forward PSR for the Health Care/Pharmaceuticals sector is 3.5.

The Enterprise Value-to-Earnings Before Interest, Taxes, Depreciation, and Amortization ratio (EV/EBITDA) ratio considers a company’s total value, including debt and equity, relative to its earnings before interest, taxes, depreciation, and amortization, giving investors insight into profitability across companies. A high means the company is overvalued, while a low ratio indicates it’s undervalued. The mean forward EV/EBITDA ratio for the Health Care/Pharmaceuticals sector is 12.4.

These metrics are essential for investors to understand the financial health and potential of companies within the Health Care/Pharmaceuticals sector.More By This Author:NVIDIA’s Long-Term Prospects Are Mediocre At Best – Here’s Why
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