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Oct. 1, 2019, 9:03 a.m. EDT

Marijuana stocks are oversold — here’s how to know when to buy them

Extreme bearishness can lead to a bounce in prices, but only positive money flows can provide sustained gains

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By Nigam Arora


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Marijuana investing has a bright, long-term future.

A lot of money will be made in marijuana stocks. Many investors saw the opportunity and bought marijuana stocks aggressively near the highs earlier this year. That was precisely the time when those following segmented money flows were selling into the strength. Please see: “The ‘smart’ money is telling Canopy Growth investors to be careful.” This column was published right near the top in marijuana stocks.

As marijuana stocks fell, those less informed kept on aggressively adding to their positions. After all, to them it made sense to buy because the stocks had become cheaper than when they originally started buying them. However, those following segmented money flows could have avoided the temptation because the smart money flows were negative.

When I wrote “How to potentially become a marijuana millionaire, albeit carefully,” a lot of money had been made in marijuana stocks by following segmented money flows. Now, marijuana investors are asking a number of questions. What is the real reason behind the latest selling? Is it short-selling or real selling? When will the selling stop? When will be the time to add to existing core, small marijuana positions? Let’s examine the latest marijuana money flows with the help of a chart.

Chart

Please click here for a chart showing segmented money flows in 17 popular marijuana stocks.

Note the following:

• Smart money flows are neutral in Aphria /zigman2/quotes/207425803/composite APHA -4.00% , Canopy Growth /zigman2/quotes/200603886/composite CGC -3.12% and New Age Beverages /zigman2/quotes/200595917/composite NBEV -0.61% .

• Smart money flows are mildly negative in Aurora Cannabis /zigman2/quotes/210559470/composite ACB -0.98% and Cronos /zigman2/quotes/206842762/composite CRON -5.62% .

• Smart money flows are negative in marijuana ETF /zigman2/quotes/204332491/composite MJ -1.83% .

• Smart money flows are negative in Acreage Holdings /zigman2/quotes/205165963/delayed ACRGF +0.62% , Curaleaf /zigman2/quotes/205334348/delayed CURLF +3.30% , Liberty Health /zigman2/quotes/204270480/delayed LHSIF -5.59% , MedMen /zigman2/quotes/201940908/delayed MMNFF -2.86% and /zigman2/quotes/209129655/composite TLRY -1.83% .

• Among marijuana-related stocks, smart money flows are neutral in Corbus Pharmaceuticals /zigman2/quotes/201549545/composite CRBP +0.33% .

• Among marijuana-related stocks, smart money flows are negative in Craft Brew Alliance /zigman2/quotes/209915231/composite BREW +0.59% , GW Pharmaceuticals /zigman2/quotes/209686240/composite GWPH +1.55% , KushCo Holdings /zigman2/quotes/209165034/delayed KSHB -4.95% , Scotts Miracle-Gro /zigman2/quotes/200553749/composite SMG +1.01% and Constellation Brands /zigman2/quotes/207737284/composite STZ +0.63% .

Ask Arora: Nigam Arora answers your questions about investing in stocks, ETFs, bonds, gold and silver, oil and currencies. Have a question? Send it to Nigam Arora.

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$ 4.56
-0.19 -4.00%
Volume: 2.26M
Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$1.25 billion
Rev. per Employee
$147,410
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/zigman2/quotes/200603886/composite
US : U.S.: NYSE
$ 18.65
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Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
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/zigman2/quotes/200595917/composite
US : U.S.: Nasdaq
$ 2.45
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Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
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/zigman2/quotes/210559470/composite
US : U.S.: NYSE
$ 3.54
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
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Rev. per Employee
$94,401
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/zigman2/quotes/206842762/composite
US : U.S.: Nasdaq
$ 7.39
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P/E Ratio
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Dividend Yield
N/A
Market Cap
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$55,248
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/zigman2/quotes/204332491/composite
US : U.S.: NYSE Arca
$ 18.22
-0.34 -1.83%
Volume: 401,050
Nov. 13, 2019 12:01p
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/zigman2/quotes/205165963/delayed
US : U.S.: OTC
$ 4.85
+0.03 +0.62%
Volume: 143,665
Nov. 13, 2019 11:43a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.29 billion
Rev. per Employee
N/A
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/zigman2/quotes/205334348/delayed
US : U.S.: OTC
$ 5.10
+0.16 +3.30%
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P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.30 billion
Rev. per Employee
N/A
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/zigman2/quotes/204270480/delayed
US : U.S.: OTC
$ 0.36
-0.02 -5.59%
Volume: 324,189
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P/E Ratio
27.31
Dividend Yield
N/A
Market Cap
$128.00 million
Rev. per Employee
$71,336
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/zigman2/quotes/201940908/delayed
US : U.S.: OTC
$ 1.02
-0.03 -2.86%
Volume: 364,488
Nov. 13, 2019 11:46a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$181.69 million
Rev. per Employee
$49,729
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/zigman2/quotes/209129655/composite
US : U.S.: Nasdaq
$ 21.18
-0.39 -1.83%
Volume: 1.62M
Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$2.14 billion
Rev. per Employee
$62,689
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/zigman2/quotes/201549545/composite
US : U.S.: Nasdaq
$ 4.37
+0.01 +0.33%
Volume: 312,281
Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$285.21 million
Rev. per Employee
$62,627
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/zigman2/quotes/209915231/composite
US : U.S.: Nasdaq
$ 16.33
+0.09 +0.59%
Volume: 885,475
Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$142.68 million
Rev. per Employee
$310,054
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/zigman2/quotes/209686240/composite
US : U.S.: Nasdaq
$ 111.09
+1.69 +1.55%
Volume: 185,550
Nov. 13, 2019 12:01p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$3.48 billion
Rev. per Employee
$20,686
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/zigman2/quotes/209165034/delayed
US : U.S.: OTC
$ 1.64
-0.09 -4.95%
Volume: 548,780
Nov. 13, 2019 11:46a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$191.10 million
Rev. per Employee
$339,343
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/zigman2/quotes/200553749/composite
US : U.S.: NYSE
$ 107.26
+1.07 +1.01%
Volume: 92,401
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P/E Ratio
13.09
Dividend Yield
2.17%
Market Cap
$5.90 billion
Rev. per Employee
$532,058
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/zigman2/quotes/207737284/composite
US : U.S.: NYSE
$ 184.98
+1.15 +0.63%
Volume: 271,203
Nov. 13, 2019 12:01p
P/E Ratio
48.15
Dividend Yield
1.62%
Market Cap
$34.93 billion
Rev. per Employee
$842,260
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