CannTrust Stock: Fast-Growing Marijuana Company Threatens to Topple Major Players
CannTrust Stock Is an Underdog You Should Be Watching Right Now
CannTrust Holdings Inc (OTCMKTS:CNTTF, TSE:TRST) surprises us again with another quarter of triple-digit revenue growth. It has now reached the vantage point where it may topple top industry player Aphria Inc (OTCMKTS:APHQF, TSE:APH) and may soon be gunning for bigger players above it. Here’s why you should be watching this rising star more closely.
This lesser-known marijuana company may not be as talked-about as its bigger counterparts, but it’s slowly carving a significant niche for itself in the industry.
CannTrust graduated to Canada’s largest stock exchange just last month. Until then, it traded on the much less prominent Canadian Securities Exchange, which may explain why it hasn’t been able to garner due press coverage.
But now that it’s making some big moves, investors of this marijuana underdog may be in for a glorious surprise.
There are quite a few reasons that drive my optimism for TRST stock but the most notable has to be its growing profitability. You see, profitable marijuana companies are extremely rare. Aphria is the only major marijuana producer that is making any money off its sales.
The rest of the top marijuana companies, including Canopy Growth Corp (OTCMKTS:TWMJF, TSE:WEED), Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB), and MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF), are all returning losses, while they aggressively expand their production facilities. Clearly, this expansion is being achieved at the expense of shareholder equity.
CannTrust, however, has struck the right balance between the pursuit of these two inherently opposing strategic goals. Not only is it expanding, but is doing so profitably.
In the most recent quarter, during which it posted a record revenue of $7.0 million (slightly short of Aphria’s), it also managed to generate about $0.09 a share in profit. Bear in mind that this is the company’s second consecutive quarter of profitability.
During this same three-month period, the company managed to complete the Phase I construction of its 430,000-square-foot facility that is being constructed to ramp up cannabis production ahead of Canada’s expected legalization of recreational pot later this year.
On top of these achievements, CannTrust managed to add another 5,000 patients to its medical marijuana family during this same period. Its total number of patients has now surpassed 40,000. (Source: “CannTrust™ Reports Record Revenue for Q4 and FY 2017,” Cision, March 29, 2018.)
Not many in the industry can boast these kinds of numbers.
This grower and seller of cannabis and derivative products, which uses hydroponics (unlike most of its peers, which produce in outdoor greenhouses or expensive indoor facilities) is emerging as one of the top choices of medical marijuana patients. And while marijuana patients have an obvious reason to demand high-quality cannabis, good-quality strains are equally valued by users of recreational pot.
This is why CannTrust, which grows its plants in water and produces 100% pesticide-free cannabis, touts an edge over many of its competitors.
Analyst Take
I’ve been bullish on this marijuana company for a while now and my stance is being reinforced with each passing quarter as CannTrust continues to surprise us with its stunning financial figures. I view TRST stock as one of the best marijuana stocks out there. At the pace this company is growing, this dark horse of marijuana stocks could deliver triple-digit returns to investors in the months to come.
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