Investors Purchase High Volume of Put Options on Canopy Growth (NASDAQ:CGC)

Key Points

• Put-option activity surged: Traders purchased 11,855 Canopy Growth put options, 131% above the typical volume, signaling increased bearish or hedging interest.
• Canopy Growth shares slipped to $0.93, near their 52-week low of $0.84. The company remains unprofitable, with a negative net margin of 65.33%, despite beating quarterly EPS and revenue expectations.
• Analyst sentiment is mixed but leans cautious: Canopy Growth has an overall “Hold” rating, while recent reports downgraded the stock to “Sell.” Institutional investors own only 3.33% of the company, although several funds recently increased or initiated positions.

Canopy Growth Corporation (NASDAQ:CGC - Get Free Report) was the recipient of unusually large options trading activity on Monday. Traders purchased 11,855 put options on the stock. This is an increase of 131% compared to the typical volume of 5,127 put options.

Hedge Funds Weigh In On Canopy Growth

Hedge funds have recently made changes to their positions in the business. Royal Bank of Canada boosted its holdings in Canopy Growth by 1,115.6% in the 1st quarter. Royal Bank of Canada now owns 975,967 shares of the company's stock worth $927,000 after acquiring an additional 895,680 shares during the period. Lazard Asset Management LLC purchased a new stake in shares of Canopy Growth during the first quarter valued at approximately $1,716,000. Caitong International Asset Management Co. Ltd raised its stake in shares of Canopy Growth by 723.5% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 4,595,330 shares of the company's stock valued at $5,239,000 after purchasing an additional 4,037,281 shares during the period. Foundations Investment Advisors LLC acquired a new position in shares of Canopy Growth during the fourth quarter worth $485,000. Finally, SLT Holdings LLC acquired a new position in shares of Canopy Growth during the fourth quarter worth $484,000. Hedge funds and other institutional investors own 3.33% of the company's stock.

Canopy Growth Price Performance

Shares of Canopy Growth stock traded down $0.01 during trading on Monday, hitting $0.93. 1,041,264 shares of the company were exchanged, compared to its average volume of 8,056,292. Canopy Growth has a fifty-two week low of $0.84 and a fifty-two week high of $2.38. The company has a quick ratio of 2.39, a current ratio of 3.04 and a debt-to-equity ratio of 0.31. The firm has a 50 day moving average price of $0.96 and a 200 day moving average price of $1.01. The stock has a market capitalization of $415.60 million, a price-to-earnings ratio of -2.06 and a beta of 0.83.

Canopy Growth (NASDAQ:CGC - Get Free Report) last released its quarterly earnings results on Friday, August 7th. The company reported ($0.02) earnings per share (EPS) for the quarter, topping the consensus estimate of ($0.04) by $0.02. Canopy Growth had a negative net margin of 65.33% and a negative return on equity of 21.91%. The company had revenue of $142.62 million for the quarter, compared to analysts' expectations of $58.21 million. On average, equities analysts expect that Canopy Growth will post -0.1 earnings per share for the current fiscal year.

Wall Street Analysts Forecast Growth

A number of equities analysts have recently issued reports on the stock. Weiss Ratings downgraded shares of Canopy Growth from a "sell (d-)" rating to a "sell (e+)" rating in a report on Wednesday. Wall Street Zen lowered shares of Canopy Growth from a "hold" rating to a "sell" rating in a research report on Saturday, September 5th. Two investment analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, Canopy Growth has an average rating of "Hold".

About Canopy Growth

Canopy Growth Corporation is a cannabis company headquartered in Smiths Falls, Ontario, Canada. Founded in 2013 as Tweed Marijuana Inc, the company adopted the Canopy Growth name in 2015 and has developed a portfolio of cannabis brands serving both adult-use and medical markets.

Canopy Growth's products include dried cannabis flower, pre-rolls, cannabis oils, softgels, edibles, beverages and vaporization products. Its brand portfolio has included Tweed, 7ACRES, Doja, Deep Space and other cannabis brands, as well as Storz & Bickel vaporization products.

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