June 15, 2023
Top 10 Stock Canopy Growth Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Canopy Growth – Top 10 Stock in SDG 16: Peace Justice and Strong Institutions
Canopy Growth is listed as a top 10 stock on June 15, 2023 in the market index SDG 16 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 50 (high 50% performer), Obermatt assesses an overall buy recommendation for Canopy Growth on June 15, 2023.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Canopy Growth Buy
| 360 METRICS | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 80 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 66 |
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| SENTIMENT | ||||||||
| SENTIMENT | 42 |
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| 360° VIEW | ||||||||
| 360° VIEW | 50 |
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ANALYSIS: With an Obermatt 360° View of 50 (better than 50% compared with alternatives), overall professional sentiment and financial characteristics for the stock Canopy Growth are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Canopy Growth. The consolidated Value Rank has an attractive rank of 80, which means that the share price of Canopy Growth is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 80% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 66. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 42. Professional investors are more confident in 58% other stocks. The consolidated Growth Rank also has a low rank of 11, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 89 of its competitors have better growth. ...read more
RECOMMENDATION: With a 360° View of 50, Canopy Growth is better positioned than 50% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 80), and the financing structure is on the safer side (Safety Rank of 66). However, sentiment in the professional investor community is below-average (Sentiment Rank of 42), as is the growth momentum for the company (Growth Rank of 11). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Canopy Growth only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 42 (better than 42% compared with alternatives), overall professional sentiment and engagement for the stock Canopy Growth is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half the indicators below and the other half above average for Canopy Growth. Analyst Opinions are at a rank of 1 (worse than 99% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 47, which means that stock research experts are getting more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 40, which means that the current professional news and professional social networks tend to be negative when discussing this company (more negative news than for 60% of competitors). On the upside, the Professional Investors rank is 77, which means that professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. This could be due to a large company size, which could contribute to the higher share of professional investors in the company. If this is not the case, the low sentiment ranks are more challenging to explain. ...read more
RECOMMENDATION: With an Obermatt Sentiment Rank of 42 (less encouraging than 58% compared with investment alternatives), Canopy Growth has a reputation among professional investors that is below that of its competitors. Should the company be on the smaller side, the presence of professional investors could be reassuring. That would make Canopy Growth stock something like a hidden gem. Investors should make sure with further research that this is true, because all other sentiment indicators are negative which is a sign for caution. ...read more
Value Strategy: Canopy Growth Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 80 (better than 80% compared with alternatives) for 2023, Canopy Growth shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Canopy Growth. Price-to-Sales (P/S) is 74, which means that the stock price compared with what market professionals expect for future sales is lower than for 74% of comparable companies, indicating a good value concerning Canopy Growth's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 83% of alternatives (17% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 1 are lower than average (dividends are expected to be lower than 99% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 0, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 80, is a strong buy recommendation based on Canopy Growth's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Canopy Growth may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). ...read more
Growth Strategy: Canopy Growth Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 11 (better than 11% compared with alternatives), Canopy Growth shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Canopy Growth. Only Capital Growth has a good rank of 88, which means that currently professionals expect the company to grow its invested capital more than 1% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 14 which means that currently professionals expect the company to grow less than 86% of its competitors. Profit Growth with a rank of 1 and Stock Returns with a rank of 1 are also low (below 99% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a SELL recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Canopy Growth is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Canopy Growth Debt Financing Safety above-average
| SAFETY METRICS | June 15, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 48 |
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| REFINANCING | ||||||||
| REFINANCING | 78 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 42 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 66 |
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ANALYSIS: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), the company Canopy Growth has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Canopy Growth is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Canopy Growth and the other two below average. Refinancing is at 78, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 78% of its competitors. But Leverage is high with a rank of 48, meaning the company has an above-average debt-to-equity ratio. It has more debt than 52% of its competitors. Liquidity is also on the riskier side with a rank of 42, meaning the company generates less profit to service its debt than 58% of its competitors. ...read more
RECOMMENDATION: With an Obermatt Safety Rank of 66 (better than 66% compared with alternatives), Canopy Growth has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Canopy Growth are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Canopy Growth Above-Average Financial Performance
| COMBINED PERFORMANCE | June 15, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 80 |
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| GROWTH | ||||||||
| GROWTH | 11 |
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| SAFETY | ||||||||
| SAFETY | 42 |
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| COMBINED | ||||||||
| COMBINED | 50 |
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ANALYSIS: With an Obermatt Combined Rank of 50 (better than 50% compared with investment alternatives), Canopy Growth (Pharmaceuticals, Canada) shares have above-average financial characteristics compared with similar stocks. Shares of Canopy Growth are a good value (attractively priced) with a consolidated Obermatt Value Rank of 80 (better than 80% of alternatives), are safely financed (Safety Rank of 66, which means low debt burdens), but show below-average growth (Growth Rank of 11). ...read more
RECOMMENDATION: An Obermatt Combined Rank of 50, is a buy recommendation based on Canopy Growth's financial characteristics. As the company Canopy Growth's key financial metrics exhibit good value (Obermatt Value Rank of 80) but low growth (Obermatt Growth Rank of 11) while being safely financed (Obermatt Safety Rank of 66), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 80% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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