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The Best Cannabis Stock for Investment- CRON Stock

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The much renowned Cowen & Co. analyst Vivien Azer comments on the Aurora Cannabis (NYSE: ACB) stockby appreciating it which positively gave a boom from an analytical perspective for the investors.

Azer comes with a strong background in the cannabis industry with #64 rank out of 5,220 analysts on TipRanks which backs up her credibility and knowledge in the subject.

Cronos Group (NASDAQ: CRON) and CRON stock are also amongst her highly prized stocks as she firmly believes in the excellent job that the aforementioned are doing in the global medical cannabis research.

While she has made an appealingly noted point about Aurora leading in the cannabis producing industry, including Canopy Growth (NYSE: CGC) and Aphira (NYSE: APHA), her revelations about Cronos’ asset-light model has gathered much attention lately.

Back in December, she acclaimed the significant investment from Altria (NYSE:MO) in Cronos’ and stated “While the potential uses of cannabinoids are vast, Cronos believes the key to successfully bringing cannabinoid-based products to market is in creating reliable, consistent and scalable production of a full spectrum of the roughly 100 cannabinoids, not just THC and CBD.” She further added, “Together, Cronos can leverage Altria’s operational capabilities and expertise in order to create value-added form factors while focusing on ingredient composition without reliance on massive cultivation (farming) infrastructure.”

 

Cronos and Altria- The powerful Cannabis Market Players

Cronos’ functions in the cannabis industry with the aim of cultivating better and efficient cannabis products for the consumers. On the other hand, Altria is an American corporation, one of the largest producers and marketers of tobacco, cigarettes and other products that fall under its hood.

Altria practically owns none of the tobacco it sources, it rather intensifies on its manufacturing the cigarettes in mass quantities and effectively delivering it to the customers. This sums up to why Altria’s 45% stake in Cronos was a steal at $1.8billion.

While Cronos’ had barely a revenue generation of $1.5 billion till December, 2018 – the cannabis company had CAD $3.8 million in its last quarter –Altria paid a hefty $14 billion for 35% of Juul.

In a nutshell, Cronos’ has proffered a platform for Altria to reach out the consumer market extensively with a much definite and exponentially growing future goals any company could possibly hope for.

Altria’s involvement in the cannabis industry is a pivotal move which would influence the CRON stock holders as well.

A safe prediction- better alternative for investors

The Cronos Group Stock is currently trading above CAD $30, according to the analytical data provided by Azer, she has set a 12-month target price of CAD $29, meaning that there could be 3 possible outcomes of the Cronos Group stock.

The first case, being the most favourable would be where the Cronos stock’s value falls and Azer becomes a buyer. The second is CRON stock goes sideways for the next 12 months which means it’s up 119% year to date through March 6. The third and last would be if Azer’s predictions go wrong about the valuation of the CRON stocks and it continues to move higher. This uncertainty could hamper an investor’s stock assumptions, thereby leading to a fall in investments.

Contemplating about the cannabis stock market industry in 2018, it is found that the best deal would be putting 50% of any dollar amount in Constellation Brands (NYSE: STZ), 25% in Canopy Growth, and the remaining 25% into the Horizons Marijuana Life Sciences Index ETF (OTCMKTS:HMLSF), which has Cronos, Canopy, and Aurora as the top 3 holdings.

For example, you invested a $10,000 investment in July, 2018, it would be worth $10,590 through March 7, 2019 with a 5.9% gain.  While this might not be the best deal on stock investments, it still assures investors of a potential future market.

The valuation mismatch between Constellation Brands and Canopy growth should dissipate over the next 12 months enabling a clear and concise vision for investors.

Best Cannabis Stock for Investment

The most favourable cannabis stocks for investment are Hexo, Cronos and Canopy Growth. Analysing the stock market industry, the ideal investment in cannabis companies would be 15%, Constellation Brands and Altria at 20% each and the remaining in Horizons ETF.

Ivan writes about Cannabis at The Cannabis Radar. He has a degree in Nutrition Sciences from University of Oklahoma Health Sciences Centre. He likes to spend his spare time reading to his daughter or spending time with his wife.

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