Is CBD Oil a Long-Term Investment?
One of the most exciting subsectors in the legal marijuana industry is the cannabidiol (CBD oil) market. Free from most of the stigma associated with traditional marijuana, CBD oil could be the next health craze that helps cannabis stock values balloon.
CBD oil penny stocks, therefore, are especially enticing.
According to recent CBD market analysis by Forbes, the market is projected to increase by 700% by the year 2020. Another study on CBD market growth, by Hemp Business Journal, estimated that the sector will reach $2.1 billion by 2020, which would be an enormous rise from the $202.0 million in 2016. (Source: “Pot Stocks Gearing Up for Strong 2018 as Cannabis CBD Frenzy Intensifies,” Cision, December 12, 2017.)
As you can see from that CBD market analysis, the future of the CBD oil sector is no joke.
For those looking to invest in CBD oil, sooner is likely better than later. You see, the industry is only going to continue to grow as producers find new applications and ways to market their products.
CBD oil penny stocks, therefore, are uniquely suited to see massive gains as the sector grows. After all, penny stocks are able to generate growth at a far higher rate than the stocks of larger companies.
Couple that increased propensity for growth with an industry that is on the rise overall and you have a powerful combination.
That’s why I believe CBD oil stocks are strong long-term investments.
Publicly Traded CBD Oil Companies List
Below is a list of four of my favorite publicly traded CBD oil companies—some that are penny stocks and others that are large, more established players.
This list is by no means comprehensive, since there are many players in the game, but these are some of my favorite CBD oil stocks that I believe could be strong long-term investments.
|Company Name||Stock Ticker|
|Aurora Cannabis Inc||OTCMKTS:ACBFF, TSE:ACB|
|OrganiGram Holdings Inc||OTCMKTS:OGRMF, CVE:OGI|
|Neptune Technologies & Bioressources Inc||NASDAQ:NEPT|
|Canopy Growth Corp||NYSE:CGC|
Two CBD Oil Penny Stocks to Watch
With CBD market analysis showing why you should be excited about the industry more broadly, let’s dive into two penny stocks that I especially believe are ready for breakouts.
The first stock is one we’ve long covered at Profit Confidential: OrganiGram Holdings Inc (OTCMKTS:OGRMF, CVE:OGI).
The company impresses me for a number of reasons, but what makes OrganiGram stock one of my favorite CBD oil penny stocks is that it has a very good price-earnings (P/E) ratio.
The P/E ratio is often used to determine if a company is overvalued or undervalued. The P/E ratio is determined by taking the current share price and measuring it relative to the earnings per share (EPS).
OrganiGram stock holds one of the stronger P/E ratios in the legal cannabis business. Furthermore, the company has had periods of strong performance in 2018, but it has yet to enjoy a massive breakout—which leads me to believe that one may be in the works.
Not to mention that, over the past three months, the stock has gained about 16%. At $3.55, this stock is an exciting prospect.
Another one of my favorite CBD oil penny stocks is Neptune Technologies & Bioressources Inc (NASDAQ:NEPT).
The stock chart below compares the performance of the four CBD oil stocks: Aurora Cannabis Inc (in red), OrganiGram Holdings Inc (in blue), Neptune Technologies & Bioressources Inc (in black), and Canopy Growth Corp (in green).
Chart courtesy of StockCharts.com
At under $3.00, NEPT stock could be one of the better ones in the cannabis industry—if you can handle its volatility.
Neptune Technologies & Bioressources is just starting to get into the cannabis business. After the release of the company’s most recent Q4 earnings report, Neptune President and CEO Jim Hamilton said the following:
During the fourth quarter, we sustained an intense pace of activity in developing the cannabis business opportunity, meeting with potential suppliers and partners while continuing to move forward with the regulatory licensing process. As of today, having committed more than 90% of our $5 million approved capital plan to work on site security, license compliance and CO2 extraction, we remain on track and on budget to complete the first Phase of our cannabis commercialization strategy in the middle of 2018.
(Source: “Neptune Announces Fourth Quarter and Year-end Results,” Cision, June 5, 2018.)
The company is also listed on the Nasdaq, giving it a competitive advantage over other marijuana oil stocks.
The only drawback is that NEPT stock is very volatile. The share price soared by as much as 50% in a short period in mid-June, following Canada’s marijuana legalization date being announced, only to see all those gains erased over the past several weeks.
The added volatility is likely a side effect of the stock being listed on a major U.S. exchange, but that is still an overall positive, since it makes NEPT stock more accessible to U.S. investors.
The CBD oil industry is filled with potential; that’s why so many companies are looking for inroads into that lucrative market.
The product fills a niche that traditional marijuana fails to do. Namely, it seems healthier by virtue of it being a natural extract, as well as it not having to be smoked.
Marijuana companies that play in this field have a lot of upside. CBD oil penny stocks could see their values climb in explosive bursts—as we’ve already witnessed in 2018.
Considering that medical marijuana is often the first step toward marijuana legalization, companies embracing CBD oil and its potentially helpful medical effects should allow them to enter certain markets faster than companies that wait for recreational marijuana to become legal.
As such, I’m very bullish about the direction of the CBD oil sector. While the pot industry as a whole has me very excited about the future, certain features of the CBD oil market make it especially alluring.
With that in mind, I believe that CBD oil stocks could be strong long-term investments with high growth potential.