5 Best Marijuana Stocks to Invest In

1. Altria Group, Inc. (NYSE: MO)

Number of Hedge Fund Holders: 38

Altria Group, Inc. (NYSE: MO) is a manufacturer of cigarettes, oral tobacco products, and wine in the US. The company’s brands include Marlboro, Black & Mild, Copenhagen, Skoal, Red Seal, and Husky. It has taken a $1.8 billion stake in the cannabis business through investing in Cronos Group Inc. (NASDAQ: CRON), a major multinational Canadian cannabis company, and has added cannabis technology to its portfolio this year, including patented marijuana vaporizers. The company ranks 1st on our list of the best marijuana stocks to invest in.

According to Morgan Stanley this month, Altria Group, Inc. (NYSE: MO) is set to have only an upside after the FTC administrative trial. The firm retained its Overweight rating and $52 price target on the company. In the first quarter of 2021, Altria Group, Inc. (NYSE: MO) had an EPS of $1.07, beating estimates by $0.02, while its $4.88 billion revenue missed estimates by $108.51 million. The company has a gross profit margin of 65.28%. Additionally, the stock has a forward PE ratio of 10.39 and has gained 16.75% in the past 6 months and year to date.

By the end of the first quarter of 2021, 38 hedge funds out of the 866 tracked by Insider Monkey held stakes in Altria Group, Inc. (NYSE: MO), worth about $1.1 billion. This is compared to 37 hedge fund holders in the previous quarter, holding stakes worth roughly $1.08 billion.

Oakmark Funds, an investment management firm, mentioned Altria Group, Inc. (NYSE: MO) in their first quarter 2021 investor letter. Here’s what they said:

“We initiated a new position in Altria, which commands roughly 50% of the cigarette and smokeless tobacco market in the U.S. Both of these markets are duopolies that we believe have exhibited strong pricing power over time. While the shares trade at a low multiple of reported earnings, Altria also owns valuable stakes in other non-core businesses, including ~10% of AB InBev, 35% of Juul and 45% of Cronos. Excluding the values of these stakes and their respective earnings contribution, we were able to purchase shares of Altria for less than seven times our estimate of next year’s earnings. This compares to other consumer brands with less favorable earnings growth profiles that trade for three times Altria’s multiple. The company also has several promising reduced-risk products that may appeal to tobacco users, including On! and iQOS. We believe these products position the company well to help consumers slowly transition to a tobacco-free future. We expect management to return the vast majority of future earnings to shareholders given the company’s strong balance sheet, high free cash flow conversion and limited capital requirements.”

See also 10 Best Healthcare Dividend Stocks and 12 Best Telemedicine Stocks To Buy.

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