Investing in lower-priced growth stocks remains an attractive option, as it allows portfolio diversification with a small amount of capital. For example, instead of buying one share of Amazon for over $4,000, you can purchase shares of several companies trading below $5. While this strategy carries significant risks, it also allows investors to generate stellar gains over time. Here, we take a look at three such growth stocks that Canadians can look to buy this month.
4Front Ventures
A U.S.-based cannabis stock flying under the radar, 4Front Ventures (CNSX:FFNT) is a small-cap company valued at $753 million. It has increased sales from US$4 million in 2018 to US$57.63 million in 2020. Analysts expect sales to rise by 271% year over year to US$213.8 million in 2021 and by 41.6% to US$303 million in 2022. The company’s adjusted earnings are also forecast to improve to US$0.16 per share in 2022 from a loss per share of US$0.08 in 2020.
In Q2 of 2021, 4Front Ventures revenue rose 85% year over year to US$34.4 million. Comparatively, adjusted EBITDA increased by 27% sequentially to US$7.5 million, indicating a margin of 22%.
4Front reiterated systemwide pro forma revenue of between US$170 million and US$180 million in fiscal 2021 with an adjusted EBITDA of between US$40 million and US$50 million. It emphasized that existing licensed projects at maturity represent a long-term revenue and EBITDA opportunity of over US$650 million and US$250 million respectively.
HIVE Blockchain
For investors bullish on the cryptocurrency space, HIVE Blockchain (TSXV:HIVE)(NASDAQ:HVBT) is a company that should be on your radar. Priced at $4.5 per share and valued at a market cap of $1.73 billion, HIVE stock is up a massive 4,620% since the start of 2020. So, a $1,000 investment in HIVE in January 2020 would be worth more than $47,000 today.
In the first quarter of fiscal 2021 ending in June, HIVE’s gross revenue from digital currency mining stood at $37.2 million, an increase of 466% year over year. It was also 11% higher on a sequential basis.
This allowed the company to report a net income of $18.6 million, up from just $1.8 million in the year-ago period. HIVE’s gross mining margin expanded to $31 million in Q2 from $2.6 million in the year-ago period. Investors should know that the stock price of crypto mining companies such as HIVE is closely related to the digital asset they mine, making the shares as volatile as their underlying assets.
Columbia Care
The final stock on my list is another cannabis company with a huge presence south of the border. Shares of Columbia Care (CNSX:CCHW) are priced at $4.34, valuing the company at a market cap of $1.58 billion. While the stock has gained over 70% in the last 18 months, it also traded 55% below all-time highs.
Analysts expect Columbia Care to increase sales by 248% to US$625 million in 2021 and by 55.4% to US$971 million in 2022. This rapid expansion in the top line will also allow the company to report adjusted earnings of US$0.3 in 2022 compared to a loss of US$0.48 in 2020.
It’s now one of the largest multi-state operators in the U.S., with 99 dispensaries and 31 cultivation facilities in the country. Columbia Care also has licenses to operate in 18 states where medical marijuana is legalized. Analysts expect shares of Columbia Care to more than triple over the next 12 months.
