In the last few months, we've seen just a few scandals - some very minor - push marijuana shares' prices down. That's natural in a new industry like this.
On Aug. 1, Aphria Inc. (NYSE: APHA) shares opened at $5.35. But after it reported earnings, APHA zoomed to an intraday high of $7.45 on Aug. 2; that's a nice 39%, one-day "pop."
The company increased its net cannabis revenue by 85%, which is a big deal. And I don't think Aphria will be alone when it comes to that kind of healthy revenue growth.
That's why I'm looking at this list of the biggest cannabis stocks right now. They're going to report next week in a big and potentially very profitable wave...
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What to Know About Earnings Reports
I'll share the list with you all in a second, but before I do that, I want you to know about some other factors worth watching.
These often don't make headlines in stories about earnings, but are sometimes "buried" in the reporting and conference calls. They're red flags; some really unscrupulous managers might take steps to conceal these problems.
LEGAL WAVE: Barriers to marijuana could be tumbling in Mexico and Thailand, but it's here in the U.S. where legalization could spark a "Green Rush" in certain stocks. Click here to learn about three of them...
Late filing can be a troubling sign; it reflects management's inability or unwillingness to track its own performance.
Revenue manipulation - these numbers are vulnerable to misrepresentation. Some companies will report revenue before it is actually earned or simply make up income that is not there. Something else to watch is sales that are tied to related parties - like a sister or subsidiary - that don't actually go through.
Inventory manipulation represents a gain or loss that may not be fully realized; either way it's not good practice to play fast and loose with the product levels. After all, for cannabis companies, inventory can be biological.
Pending class-action lawsuits can significantly impact shares, sending them soaring on a win or sinking on a loss.
With that said, here are the biggest cannabis players set to report in the next few days...
Now, these are a lot of companies to keep track of, so I want to make sure everyone knows about and gets the chance to use our proprietary cannabis stock-rating system.
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About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.