Canopy Stock Story

CGC -  USA Stock  

USD 3.77  0.17  4.72%

Considering the 60-day investment horizon Canopy Growth is expected to under-perform the market. In addition to that, the company is 4.17 times more volatile than its market benchmark. It trades about -0.04 of its total potential returns per unit of risk. The DOW is currently generating roughly -0.04 per unit of volatility. While many risk-averse investors are getting carried away by overanalyzing healthcare space, it is reasonable to go over Canopy Growth Corp. We are going to analyze if the current expected returns justify Canopy Growth's volatility.
Published over three weeks ago
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Canopy Growth Corp Current Investor Sentiment

Investor biases related to Canopy Growth's public news can be used to forecast risks associated with investment in Canopy. The trend in average sentiment can be used to explain how an investor holding Canopy can time the market purely based on public headlines and social activities around Canopy Growth Corp. Please note that most equiteis that are difficult to arbitrage are affected by market sentiment the most.
Canopy Growth's market sentiment shows the aggregated news analyzed to detect positive and negative mentions from the text and comments. The data is normalized to provide daily scores for Canopy Growth's and other traded tickers. The bigger the bubble, the more accurate is the estimated score. Higher bars for a given day show more participation in the average Canopy Growth's news discussions. The higher the estimate score, the more favorable is the investor's outlook on Canopy Growth.
Canopy Growth (NASDAQ:CGC) high volatility trend continues
Canopy Growth Corp has 1.65 B in debt with debt to equity (D/E) ratio of 0.39, which is OK given its current industry classification. The entity has a current ratio of 8.14, demonstrating that it is liquid and is capable to disburse its financial commitments when the payables are due. Debt can assist Canopy Growth until it has trouble settling it off, either with new capital or with free cash flow. So, Canopy Growth's shareholders could walk away with nothing if the company can't fulfill its legal obligations to repay debt. However, a more frequent occurrence is when companies like Canopy Growth Corp sell additional shares at bargain prices, diluting existing shareholders. Debt, in this case, can be an excellent and much better tool for Canopy to invest in growth at high rates of return. When we think about Canopy Growth's use of debt, we should always consider it together with cash and equity.
The firm shows a Beta (market volatility) of 1.9531, which signifies a somewhat significant risk relative to the market. Let's try to break down what Canopy's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Canopy Growth will likely underperform. Even though it is essential to pay attention to Canopy Growth Corp historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy towards foreseeing any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. Canopy Growth Corp exposes twenty-seven different technical indicators, which can help you to evaluate its performance. Canopy Growth Corp has an expected return of -0.24%. Please be advised to confirm Canopy Growth Corp jensen alpha, maximum drawdown, semi variance, as well as the relationship between the sortino ratio and potential upside to decide if Canopy Growth Corp performance from the past will be repeated at some point in the near future.
Volatility is a rate at which the price of Canopy Growth or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Canopy Growth may increase or decrease. In other words, similar to Canopy's beta indicator, it measures the risk of Canopy Growth and helps estimate the fluctuations that may happen in a short period of time. So if prices of Canopy Growth fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.

How important is Canopy Growth's Liquidity

Canopy Growth financial leverage refers to using borrowed capital as a funding source to finance Canopy Growth Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Canopy Growth financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Canopy Growth's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions.
It is good to see analyst projects for Canopy Growth, but it might be worth checking our own buy vs. sell analysis

Canopy Growth Volatility Drivers

Canopy Growth unsystematic risk is unique to Canopy Growth Corp and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in Canopy Growth you can also buy Vertex Energy. You can also mitigate this risk by investing in the drug manufacturers—specialty & generic sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing Canopy Growth important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in Canopy Growth income statement and balance sheet. Here are more details about Canopy volatility.
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