MJ ETF Analysis: Data Driven Analysis of Top Stocks Using ETF Ownership and Changes in Holdings
Updated: Jul 13, 2022
This analysis of MJ ETF ownership of cannabis stocks is a factor contributing to the stocks ranked as best cannabis stocks in the Best Cannabis Stocks Analysis.
The ETFMG Alternative Harvest ETF (Ticker MJ) is one of the two largest Cannabis ETFs globally, measured in terms of Assets Under Management (AUM). Further information on the fund, and the fund’s daily holdings data, can be found on the ETFMG-MJ website.
The following tables shows the analysis incorporating all the stocks currently in the ETF and uses the holdings data from January 1, 2022 for comparisons. This first table lists them in order of highest to lowest Portfolio Weighting percentage.
It can be seen that the large market capital Canadian Licensed Producers are the stocks with the highest weightings percentage. However, many of these companies were excluded from the Best Cannabis Stocks Analysis because they did not meet the criteria of quarterly revenue around or higher than US$ 50 million.
As explained in the Best Cannabis Stocks Analysis, this analysis was designed to identify which stocks would benefit the most when funds flow into a sector (i.e. sector rotation), not just into individual stocks but also into ETFs. The metric identified as most relevant to sector rotation is the % of the company’s market cap held by the ETF. The ones with higher ownership % by the ETF will benefit disproportionately higher when funds flow into the sector. The analysis in this page was used to determine ETF ownership % of company market cap presented in the Cannabis ETF Analysis: Cannabis Stocks with highest % of Market Cap Owned by MSOS, MJ and YOLO ETFs page.
The other important metric is changes in number of shares held by the ETF over the last few months/quarters. This is a passive ETF and changes are based on the methodology they use. Stocks where the share count increased are those that are favored by the fund’s methodology as they rebalance their holdings.
The top five and next five ranked by each criteria listed above have been highlighted in green. For the analysis in this blog, the focus has been on cannabis stocks that specifically derive bulk of revenues from one or more of the following: retail, production and/or technology. The ancillary business companies have been excluded from the analysis, and highlighted in grey. Some of them are good companies, and if they interest you, go ahead and do due diligence on them. But I’ve simplified the scope of this blog to focus on the more “pure” play cannabis companies listed publicly. The tobacco companies have also been excluded and highlighted in grey.
This second table lists the stocks in order of changes in number of shares held by the ETF over the last few months/quarters, starting January 1, 2022.
This metric is impacted by the number of shares held on January 1, 2022 and hence based on a point in time. But they do show the trend in ownership by the ETF. The table clearly highlights that WM Technologies is being accumulated this year and is favored by the fund managers of this ETF. While this data point has not been used to award points in the Best Cannabis Stocks Analysis, it is a useful data point to see the trends in accumulation. If the trends continue, the % of market capital owned by the ETF should also increase.
The following TradingView chart (click chart if interested) gives additional data and charts on this ETF:
This analysis and the tables included will be updated on a regular basis and the relative rankings are expected to change based on company market caps and changes in the ETF’s holdings. The ANALYSIS category of this blog has the other analyses incorporated into the Best Cannabis Stocks analysis. I also recommend reviewing the MSOS ETF Analysis: Data Driven Analysis of Top Stocks Using ETF Ownership and Changes in Holdings page.
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Disclosure: I (username Adastra) am an investor not a trader. I am bullish on the Cannabis sector as a long-term investment (2025 and beyond), provided stocks/ETFs are carefully picked based on data-driven due diligence. Of the 15 stocks covered in the Best Cannabis Stocks analysis, I own only High Tide, which I am holding as a long-term investment. But my analysis indicates (without any guarantees) that there is a potential for impressive gains in investing in the stocks best ranked in the analysis, including WM Technology, Trulieve, Curaleaf and any other stocks that will have a dedicated page. I reserve the right to buy or sell at any time any of the stocks mentioned in this blog. I do not short stocks and never will short any stock in a company that makes the world a better place. I do not have insider knowledge of any company covered in this blog. All data used for analysis is from public sources. I have received (as of last update date of this page) ZERO funding for this blog from any of the companies featured in this blog.