The trade war and the cannabis revolution are working in tandem to create a unique profit opportunity for our top pot stock.
This is an investment that can earn you 50% over the next six months. But it will likely be just the beginning for a leader in an industry projected to grow 1,473% in just five years.
We’re talking about the cannabis drink market. It was worth $89 million in 2018, and consultancy firm Zenith Global says it’s going to be worth $1.4 billion by 2024.
So this beverage giant, which has been investing heavily in the cannabis industry, was already an unequivocal “Buy” before the global trade mess put it at a discount.
Have you ever gone to the store and seen the item you already planned to purchase sitting in the bargain bin with its price slashed? Feels like Christmas, right?
Here’s why this stock has so much profit potential right now.
Tariff Threats Are Just a Speed Bump
Just when the trade war with China seemed to settle down, out of the blue comes a new 5% tariff threat against Mexico.
Additionally, if tariffs went into effect, they would increase by 5% per month until reaching 25%.
Because two-thirds of its revenue happens to come from Mexican-produced beverages, our favorite cannabis beverage stock was spanked for a 5.8% loss May 31. That capped a 14.4% five-day loss and a 17.0% loss since April 29.
But you realize the stock is on sale when you consider the likelihood of these tariffs not materializing.
STAKE YOUR CLAIM: Three pot stocks in particular could be poised for rare, wild gains of up to 1,000%. Click here to learn how you could see a $2 million “pot payday”…
Of course, that is up to U.S. President Donald Trump and his negotiating counterparts in Mexico – the two sides are scheduled to discuss the matter this week.
But taking a page right from Trump’s 1987 book, “Trump: The Art of the Deal,” such tactics are par for the course. He wrote, “I never get too attached to one deal or one approach… I keep a lot of balls in the air, because most deals fall out, no matter how promising they seem at first.”
We can take that to mean that if the tariffs do not do the job he intends – which has to do with curtailing illegal immigration, not trade, as they are with China – then he will likely not commit to this tactic.
In any event, our view on all of these tariff wars is that sooner or later they will all resolve. And when they do, stocks of promising companies that were punished by the market should come roaring back to life.
Our favorite cannabis stock is one of these.
It scores a perfect 4.75 on our proprietary Money Morning Stock VQScore™ system. That means it’s poised for breakout, based on a formula that boils all of a stock’s profit potential down to one number.
If we haven’t already given it away, this company just invested $4 billion in a major cannabis player.
With so many catalysts converging on pot stocks, there will be no better time than now to look into it…
The Top Pot Stock at a Discount
Constellation Brands Inc. (NYSE: STZ) is now set for superior growth.
You probably know many of its products, from beers such as Modelo and Corona to spirits such as Svedka Vodka and High West Whiskey. But like several other smart companies in the so-called “sin” industries, it saw the handwriting on the wall. Cannabis is stealing its market share, so rather than fight cannabis companies, Constellation is buying into them.
Last summer, it raised its stake in Canopy Growth Corp. (NYSE: CGC), one of the fastest-growing pot stocks out there, to 37% with its $4 billion investment. Together, they plan to create cannabis-infused drinks as soon as the drug is legalized at the federal level.
Constellation is a rare blue-chip stock that’s also poised to gain from the cannabis wave. The company has managed to raise earnings per share (EPS) consistently every year since 2013, before it even started investing in pot – EPS saw a 29% jump in 2018.
The company also has a $41 billion market cap. Its size gives it a firm foothold in new territory, stability unknown to smaller companies trying to break into the cannabis industry.
The stock sells for $184.72.
According to FactSet, 16 out of 19 analysts rate STZ a “Buy” or “Overweight,” with price targets as high as $288.
That’s potential growth of more than 55% over the next six months alone.
These 3 Stocks Are the Key to 2019’s Greatest Profits
The 2018 midterm election was a turning point for the cannabis industry.
We expect nothing short of historic profits by the end of the year.
But not all pot stocks will hand you life-changing wins. In fact, often the companies making headlines are least likely to see the biggest gains.
These three stocks, on the other hand, are flying under the radar… for now. Each of them could see exponential stock price acceleration at any moment, and if you get in before that happens, you could turn a token stake into a lifetime of wealth.
I don’t know of any other sector providing anywhere near this level of growth now.
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.To get full access to all Money Morning content, click here.
Disclaimer: © 2019 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.