The marijuana industry is burning hot due to easing regulations
on the once highly guarded drug, marijuana, for recreational and
medical usage. In fact, Canadaâs legalization of recreational
cannabis among adults has spread strong optimism into the space.
Additionally, a number of states in the United States joined the
race of marijuana legalization. Congress, the White House and U.S.
regulators have also softened their stance on the drugâs
legalization.
Against this backdrop, ETFMG Alternative Harvest ETF
MJ â the first and only pure ETF targeting the
cannabis/marijuana industry â has gained 41.2% so far this year.
Now, investors are keen to watch whether legalization is living up
to the hype in the quarterly results of the cannabis stocks. Four
of the largest cannabis producers in Canada â Aurora Cannabis ACB,
Canopy Growth CGC, Cronos Group CRON and Tilray TLRY â are expected
to report results over the coming weeks. These stocks are the top
four holdings in the fundâs basket with a combined 39.4% share
(read: Marijuana ETF Joins Billion Dollar Club).
Letâs dig deeper into the earnings picture of these companies,
which will drive the performance of the marijuana ETF in the coming
days:
Earnings Preview for These Stocks
Aurora Cannabis is expected to report results on Feb 11. Last
month, the company provided revenue guidance in the range of
$50-$55 million for the soon-to-be-reported second-quarter fiscal
2019, reflecting more than 327% growth from the year-ago quarter
and in excess of 68% from the previous quarter (read: Buy the Dip
in Marijuana Stocks & ETF?).
Canopy Growth carries a Zacks Rank #3 and has an Earnings ESP of
-11.63%, indicating lower chance of beating estimates this quarter.
According to the our methodology, a Zacks Rank #1 (Strong Buy), 2
(Buy) or 3, when combined with a positive Earnings ESP increases
our chances of predicting an earnings beat, while Zacks Rank #4 or
5 (Sell rated) stocks are best avoided. You can uncover the best
stocks to buy or sell before theyâre reported with our Earnings ESP
Filter.
The earnings surprise of CGC track over the past four quarters is
disappointing, with average negative surprise being 321.5%. Canopy
Growth saw negative earnings estimate revision of seven cents over
the past 30 days for the quarter to be reported. The stock has a
VGM Score of F. Canopy Growth will report earnings on Feb 14.
Cronos Group has a Zacks Rank #5 and an Earnings ESP of 0.00%. The
stock saw no earnings estimate revision for to-be-reported quarter
over the past 30 days. It delivered an average positive earnings
surprise of 25% for the past four quarters. It has a VGM Score of
F. Cronos Group is scheduled to report earnings on Feb 22 (read: 5
Top Performing Stocks of Marijuana ETF).
Tilray is expected to report results on Feb 22. It has a Zacks Rank
#5 and an Earnings ESP of -45.46%. The stock delivered a negative
earnings surprise of 23.02% in the last four quarters. However, it
has witnessed positive earnings estimate revision of a couple of
cents over the past 30 days for the to-be-reported quarter. Tilray
has a VGM Score of F.
Want key ETF info delivered straight to your
inbox?
Zacksâ free Fund Newsletter will brief you on top news and
analysis, as well as top-performing ETFs, each week. Get it free
>>
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days. Click
to get this free report
Cronos Group Inc. (CRON) : Free Stock Analysis Report
Canopy Growth Corporation (CGC) : Free Stock Analysis Report
Tilray, Inc. (TLRY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days. Click
to get this free report