While shares of SNDL (NASDAQ:SNDL) are down more than 45% this year, it appears that a comeback is currently in the works. Since reporting third-quarter earnings on Nov. 14, SNDL stock has risen by around 20%.
During the quarter, the Canada-based marijuana and liquor company reported record-high revenue of $230.5 million, up an impressive 1,501% year-over-year (YOY) and 3% sequentially. Liquor revenue tallied in at $152.5 million, while cannabis retail revenue was $66.2 million. In addition, revenue from cannabis operations was $11.8 million.
CEO Zach George added the following in the report:
“Our regulated products platform has shown resiliency in the face of stiff industry and macroeconomic headwinds, and our vertically integrated cannabis business is in the early stages of providing the scale and results that we believe are required for SNDL to be a strong member of a future oligopoly in Canada.”
On top of that, revenue retention in the form of gross margin increased to a record-high of $50.3 million in Q3, up 2,723% YOY. The company also has a healthy cash, marketable securities and long-term investments balance of $988 million and no outstanding debt, plus unrestricted cash of $278 million.
Now, the next hurdle for SNDL seems to be reaching profitability. The company reported a net loss of $98.8 million compared to a net income of $16.7 million a year ago. The Q3 net loss was mainly attributed to non-cash impairment charges of $86.5 million.
With that in mind, let’s take a look at the investors betting big on SNDL stock.
5 Investors Betting Big on SNDL Stock
Tracking institutional ownership is important, as these large investors provide liquidity and support for stocks. During Q3, 84 funds reported owning SNDL, a significant decline of 69 funds from the prior quarter. Meanwhile, the institutional put/call ratio sits at 0.35, down from 0.56. That’s equivalent to 6.83 million puts and 19.28 million calls, implying a bullish options stance.
With that said, let’s take a look at the top five investors of SNDL stock. Please note that this list only includes investors who filed a Q3 position update. For example, SAF Jackson owns 2.57 million shares, but that figure is only accurate as of Q3 2020.
- ETF Managers Group: 12.52 million shares. ETF Managers purchased 6.20 million shares during Q3.
- Mirae Asset Global Investments: 1.93 million shares. Mirae purchased 780,448 shares during Q3.
- Morgan Stanley (NYSE:MS): 720,755 shares. Morgan Stanley purchased 247,142 shares during Q3.
- Dimensional Fund Advisors: 439,810 shares. Dimensional sold 4,874 shares during Q3.
- State Street (NYSE:STT): 301,547 shares. State Street purchased 5,985 shares during Q3.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.