Another Analyst Says "Buy" Canopy Growth Stock

Most analysts are already bullish on the cannabis stock

Alliance Global initiated coverage on Canopy Growth Corp (NYSE:CGC) with an upbeat "buy" rating, saying the Canada-based company can become the "global leader in cannabis," and called its buyout deal with Acreage Holdings a "critical game changer." This echoes the broader bias seen among the brokerage bunch, with eight of 11 analysts maintaining a "buy" or better rating on CGC stock prior to today.

Stiff broad-market headwinds are keeping CGC shares from capitalizing on this bull note, though, last seen trading down 2.3% at $46.40. However, the weed stock is holding above its 80-day moving average, which cushioned a pullback in the first half of April, as well. Longer term, the security is up roughly 75% year-to-date.

Options traders have been anticipating even bigger gains for Canopy Growth stock. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 3.24 calls for every put over the past 10 days.

While some of this activity was likely at the hands of traditional bulls, it's also possible short sellers were initiating an options hedge against any additional upside risk. Short interest on CGC rose 5.6% in the most recent reporting period to 27.28 million shares. This represents 13.4% of the stock's available float, or 4.2 times the average daily pace of trading.