CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) is a producer/cultivator in the cannabis patch that has consistently been one of our favorites in the space for the past few months. The company recently came out with a new report card, so we thought it would be a good idea to take a fresh look at TWMJF stock.
The headline here is this: the longer-term trend of monster fortress balance sheet strength mixed with huge top line growth is still 100% intact. The company is growing the top line at over 180% on a quarterly y/y basis, and the ratio of liquid cash to current liabilities is just spectacular, at 92:1. The numbers continue to make a very strong argument, and the stock continues to perform like a leader. But, let’s pause here and reacquaint ourselves with the company.
CANOPY GROWTH CORP COM NPV (OTCMKTS:TWMJF) bills itself as a company that, through its subsidiaries, produces and sells medical marijuana in Canada.
The company offers dry cannabis and oil products primarily under the Tweed and Bedrocan brands. It also sells its products through online.
According to company materials, “Tweed is the most recognized marijuana production brand in the world. It has built a large and loyal following by focusing on quality products and meaningful customer relationships. Tweed doesn’t just sell marijuana, it facilitates a conversation about a product we’ve all heard about but haven’t met intimately yet. It is approachable and friendly, yet reliable and trusted. As marijuana laws liberalize around the world, Tweed will expand its leading Canadian position around the globe.”
Also from their materials, “Bedrocan is the epitome of medical-grade cannabis. Bedrocan BV pioneered medical cannabis in Holland through decades of selection and refinement, leading to standardized, whole bud cannabis strains that patients can rely on. Bedrocan Canada supplies the same standardized strains to the Canadian market through exclusive licensing rights to the American continents, an arrangement it will also enjoy for all future genetic advancements. Due to its consistency over time, Bedrocan’s strains have been used in clinical research in seven European countries. That commitment to research didn’t stay on the east side of the Atlantic – Bedrocan Canada recently launched one of the largest clinical cannabis studies in the world, the EQUAL Study, to evaluate quality of life before and after medical cannabis use.”
The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. The company is headquartered in Smiths Falls, Canada.
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Going back to the latest financials for the company, we would point out a few things to really give some perspective.
First off, earnings, on a net basis, are growing at 190% on a y/y basis. So, this company is likely going to continue to pile up the cash. The growth appears to be from operating margins improvement. That means they are getting better at doing what they do, but it also means things will only get so much better without a qualitative event, which may mean some sort of acquisition given the cash already piled up. Another possibility would be some sort of dividend.
The chart shows 27% piled on for shareholders of the name during the trailing month. In addition, the company has registered increased average transaction volume recently, with the past month seeing exceeding 140% over what the stock has registered over the longer term. Since we last covered the name, TWMJF stock has moved 27.4% higher. In terms of pattern, the stock looks to be in a continuation move in a trend after finding key support at the 50-day SMA.
Earning a current market cap value of $2B, TWMJF has a significant war chest ($92.8M) of cash on the books, which is balanced by about $1.1M in total current liabilities. As noted, TWMJF is pulling in trailing 12-month revenues of $30.3M. In addition, the company is seeing major top line growth, with y/y quarterly revenues growing at 180%. This may be a very interesting story and we will look forward to updating it again soon. For continuing coverage on shares of TWMJF stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!