|Bid||2.4000 x 0|
|Ask||2.4830 x 0|
|Day's Range||2.5150 - 2.6800|
|52 Week Range||2.1200 - 7.4520|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Canadian cannabis companies should be celebrating the first anniversary of legalized weed on Thursday, but the party atmosphere has been tainted by a sharp three-month selloff that has seen many companies surrender half their value or more.
Some say that history repeats itself, and while that is sometimes true, it's never a guarantee. And when it comes to the crash in Canopy Growth (NYSE:CGC) that doesn't mean buying CGC now will lead to impressive gains again in the future.Source: Shutterstock As I wrote last month in an article on Canopy Growth for InvestorPlace, a conversation regarding cannabis stocks wouldn't be complete without shares of CGC. And along with the continued shrinking fortunes of this once very green market, the industry's largest player has also been stinking up the joint.Blame that on whatever you think. But some finger pointing for CGC stock's continued slide in shareholder value could be rightfully directed at peer Hexo (NYSE:HEXO), which announced an awful revenue warning and guidance retraction a week ago. And of course fatalities tied to vaping have been regular headline news since August and much to the detriment of the cannabis market.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUnlike the infamous Dot.bomb tech crash and today's market-leading innovators -- Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) or Netflix (NASDAQ:NFLX) -- the cannabis market in 2019 can't claim to have any companies of that caliber at bargain-bin prices. And that goes for CGC stock too. At the end of the day, it's a commodity and one currently suffering from a lot of product and overall weak demand.That's not to say there isn't great potential for growth. According to investment bank Stifel & Co. legal cannabis could be worth $200 billion over the next ten years versus a market worth less than $11 billion in 2018. And movement towards that end is underway. For one, edibles are legal as of today in the Canadian market. Canopy Growth stock also just landed the U.K.'s first medical cannabis bulk import license. * The 10 Best Mutual Funds for Your 401k Positive developments like those happening in CGC right now are victories. But to be clear, there remains an incredible amount of push-back and red tape from most regulators which CGC and the cannabis industry need to get past. And in our estimation it's going to take much longer than most anxious investors already exposed to the group dare to fathom. CGC Stock Monthly ChartIf you're going to believe in the cannabis market and CGC at this point in time, the monthly chart is a good place to assess those prospects. On this longer-term perspective, Canopy's five years as a publicly-traded company are fully captured and we can see both the hype and the damage to CGC stock price.Currently and after a pair of potential double bottom patterns from approximately $23 - $26 failed to be confirmed around the 62% retracement level, shares of CGC are in a testing position of the 76% Fibonacci level. With Canopy Growth stock's stochastics oversold and nearing a bullish crossover signal, the combination is something for bullish investors to monitor. But I'd warn against jumping into shares today and buying CGC as a core longer-term holding.The fact is many technicians agree the 76% level is a less important technical support and stocks are more likely to revisit the low of the cycle after a failure of the more formidable 62% level. In this instance, the breakdown could take shares of CGC down toward $5 and 2017's bottom, which marked the low after shares enjoyed their first whiff of success. * 7 Restaurant Stocks to Leave on Your Plate Ultimately, given the failures and uneven environment off and on the price chart of CGC stock, I'd recommend investors wait for price confirmation on the monthly perspective. That could be as simple as CGC shares forming a bottoming candlestick over the next couple weeks and then (at the moment) trading above the October high of $23.75 in November. Then again, investing successfully in CGC may not prove to be nearly that easy of a task.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Best Penny Stocks to Buy * 7 Bank Stocks to Avoid Now at All Costs * The 10 Best Mutual Funds for Your 401k The post Stay Far Away From Canopy Growth Stock … For Now appeared first on InvestorPlace.
Aphria Inc.’s profits are about the paper, not the pot. The Canadian cannabis producer reported its second consecutive quarter of profitability early Tuesday, posting net income of C$16.4 million on sales of C$126.1 million. U.S.-traded shares of Aphria (APHA)(CA:APHA) closed Tuesday’s regular session with a 24% gain, but had previously fallen just over 6% in the quarter it reported Tuesday.
Hexo Corp. unveiled Wednesday its value cannabis brand Original Stash, which the Canada-based company said is priced at "black market prices." The company said adult-use consumers can buy 28 grams, or one ounce, of Original flash dried flower for C$125.70 ($95.11) including taxes, or the equivalent of C$4.49 a gram ($3.40). The first Original Stash product is OS.210, offered as a hybrid sativa dried flower blend at 12% to 18% THC, which will be available in retail stores on Oct. 17. "Our aim with Original Stash is to disrupt the illicit market, educate consumers about the value of a regulated and tested product, and drive them to purchase their cannabis legally," said Hexo Chief Executive Sebastien St-Louis. Hexo's stock has tumbled 49% over the past three months, while the ETFMG Alternative Harvest ETF has tumbled 35% and the S&P 500 has eased 0.3%.
Boom and bust cycles can easily last a few years. A classic case is the dot-com cycle, when lasted from 1998 to 2000, giving investors time to snag juicy returns.But cannabis stocks have been different. Their boom-bust cycle only lasted a year or so. And it is far from clear if marijuana stocks have bottomed.Source: Shutterstock The silver lining is that the valuations of marijuana stocks have become much more attractive, while their growth outlook appears to be intact.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Hot Stocks Staging Huge Reversals There are a variety of high-quality marijuana stocks that investors can consider buying. But let's take a look at one: Aurora Cannabis (NYSE:ACB).Granted, the chart of ACB stock is downright scary. During the past year, Aurora Cannabis stock has gone from $12 to $3.77.While the valuation of ACB stock is still far from cheap, its growth remains particularly strong. Ultimately, that should lead to higher margins and profits, which will make Aurora stock more attractive. The Pros of ACB StockAurora has operations across 25 countries on five continents. Besides a thriving consumer business, ACB also has an extensive medical operation, as it employs more than 40 highly educated researchers, and has conducted a long list of clinical trials and case studies. What's more, the company is making a big play for the CBD-based wellness category, which is likely to become a multi-billion dollar business in the US. The Cons of ACB StockIt's true that ACB stock is facing a great deal of risk. The Canadian cannabis market has been beset with difficulties, as its supply chain has been problematic and it's been hurt by the continuing strength of the black market. Additionally, Hexo's (NYSE:HEXO) negative earnings preannouncement was a sign that the cannabis sector's growth may be decelerating.Moreover, vaping may have caused a number of deaths. While the ultimate cause of the deaths is unclear, they have damaged the cannabis industry's image. The Bottom Line on Aurora Cannabis StockAll in all, these are serious problems, and it will take some time to deal with them. But then again, Wall Street has been factoring all this into ACB stock. So even a small amount of good news could easily spark a rally by Aurora stock.But it's important to keep in mind that there are some potential catalysts that can help get ACB stock back on track. One is Cannabis 2.0. This refers to the legalization of CBD edibles, topicals and beverages in Canada. According to Deloitte, those products could generate $2.7 billion of revenue.Next, ACB has a top-notch strategic advisor, the legendary Nelson Peltz. He runs an activist investment fund and has taken positions in companies like Procter & Gamble (NYSE:PG), Mondelez (NASDAQ:MDLZ), and Wendy's (NASDAQ:WEN). No doubt, he'll be able to leverage his own network to identify strategic partners and investors.Granted, despite all this, ACB stock will likely remain volatile. So it's probably best to refrain from buying too many shares of Aurora stock initially. But in the long-term, ACB does look like it has what it takes to be a winner.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Hot Stocks Staging Huge Reversals * 7 Under-The-Radar Growth Stocks That Could Benefit New Investors * 5 Excellent High-Yield Dividend Stocks to Buy The post Aurora Cannabis Stock: It's Not Time to Throw in the Towel appeared first on InvestorPlace.
Hexo Corp. shares took another bath on Monday, after Seaport Global downgraded the stock along with market leader Canopy Growth, in a note that advises investors to switch out of Canadian cannabis stocks and into U.S. multistate operators.
Aurora Cannabis (NYSE:ACB) stock continues to tumble. Shares have fallen from around $6 in early September to $3.68 at the close Oct. 11. Terrible results from its competitors have impacted ACB stock.Source: Shutterstock Hexo's (NYSE:HEXO) preliminary results could be the canary in the coalmine. The cannabisphere is waiting on December's rollout of derivative products to provide a sales boost. But what happens if this too is a bust?With this in mind, it's easy to say Aurora stock could fall further. Valuation remains high. But a speckle of good news could shoot shares higher. Let's take a closer look, and see what's the call on ACB stock today.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Recent News with ACB StockAfter the Hexo report, analysts are taking a harder look at the pot industry's future prospects. But Jeffries' Owen Bennett remains positive on the stock. Bennett sees Aurora as one of the stronger cannabis companies, likely to survive the maelstrom. * 7 Beverage Stocks to Buy Now Their strategic relationship with investor Nelson Peltz remains a key positive. The potential of them entering the U.S. market remains a catalyst to drive shares higher.Bennett's key concern is the upcoming convertible debt maturity. $230 Canadian million dollars worth of notes come due in March 2020. Given that the current share price is far below the conversion price, Aurora needs to raise more capital to retire the debt. In other words, the potential for more share dilution. While this dilution may not be material, is remains another negative for Aurora Cannabis stock.Another key question on investor's minds is "positive EBITDA." Aurora previously implied they were are on target to hit this milestone by Q4 FY19 (quarter ending June 30, 2019). But they backtracked this before releasing Q4 results. Their current preferred wording is "on track", without a defined date.Aurora management continued with this on the last conference call, dancing around a target date for positive EBITDA.Analyst consensus sees revenue rising from $438.3 million for the period ending Jun 2020 to $775.2 million for the period ending Jun 2021, but with excess inventory and falling average selling prices, is this achievable? Aurora's Upside Remains Priced InACB stock continues to sell at a high valuation. Aurora stock trades at an enterprise value/sales (EV/Sales) ratio of 21.3. This is a discount to peer Canopy Growth (NYSE:CGC), which trades at an EV/Sales of 28.1. But Aurora trades at a substantial premium to pot stocks like Aphria (NYSE:APHA). Aphria's EV/Sales is 6.5. Aurora trades in line with Hexo's current valuation (EV/Sales of 21.9).Aurora's potential growth is already priced into the share price. Even with shares trading below the $4 price level, ACB stock is no bargain. With skepticism over pot industry growth, could Aurora Cannabis stock fall further? The company next releases results in mid-November.Last quarter, the company narrowly missed revenue estimates ($75 million actual vs. $78.2 million projected). For this quarter, sales are estimated to be $79.4 million. If the company misses the mark again, there will be concrete doubts over the Aurora growth story.But what kinds of catalysts are in the pipeline? In prior analysis, I highlighted the company's European business. As seen from September's investor presentation, Aurora's big presence in Germany could pay off in the long-term. But, for now, European medical sales remain a small part of Aurora's business. European sales were just CAD$11.8 million out of CAD$281 million in total FY2019 sales.In the short-term, "Cannabis 2.0" is the biggest mover of Aurora stock. Canada is on track to allow sales of products like edibles in December. It remains to be seen if sales will meet expectations, or become another disappointment. Taking into account these potential catalysts, it appears that Aurora stock offers very little for investors. Bottom Line on ACB StockI am skeptical about Aurora's future prospects. The company stands at the cusp of opportunity. But so do scores of other publicly-traded pot stocks. The Canadian pot space got ahead of itself, ramping up production to levels that exceed demand.The roll-out of edibles and other derivative products could be a saving grace, but reality may not line up with expectations. At the current trading price, Aurora stock is far too expensive to justify a position.At the same time, Aurora is too risky a stock to short. A modicum of good news could send the depressed stock price higher. Aurora is the kind of stock you need to throw into the "too hard" pile. Look for clearer growth opportunities, and steer clear of ACB stock.As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post Sure, ACB Stock Is a Falling Knife, but It's Too Risky to Go Short appeared first on InvestorPlace.
It may sound like a familiar refrain, and it is, but cannabis equities are imperiled at the moment and Aurora Cannabis (NYSE:ACB) stock is not immune to that theme. Last week, shares of the Canadian medical marijuana grower plunged 16.36%, extending the stock's 12-month loss to over 63%.Some that tumble is attributable to Hexo (NYSE:HEXO), which slid after issuing slack revenue guidance. Hexo forecast fourth-quarter sales of $14.50 million to $16.50 million and full-year revenue to be between $46.50 million and $48.50 million. Basically, Hexo sneezed and other cannabis stocks caught colds last week.These days, there aren't places to hide in the cannabis space. It's either hold on tight or get out. There is no in between. Last Friday, Canopy Growth (NYSE:CGC) tumbled, dragging Aurora Cannabis stock and other rivals down with it after Jefferies downgraded Canopy.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Beverage Stocks to Buy Now In a note, the Jefferies analysts said "that a number of negative headlines have impacted the sector in the past six months, as well as few signs of profitability. Still, they feel greater risk and volatility is priced in for many stocks," reports Connor Smith for Barron's.The Jefferies analysts added that the next 12 months will be pivotal for the fortunes of many cannabis companies as markets continue separating the winners from the losers. The analysts bring up a point I've frequently mentioned regarding marijuana companies: the ability to execute.Sure, there are some reasons to consider holding onto Aurora Cannabis stock, despite a dubious record of execution. Investors with high risk tolerance or the extremely patient that are waiting for increased liberalization of the Canadian recreational market and other fundamental factors can hold this name."Looking beyond Canada, forecasts suggest medical and recreational markets will continue to open up worldwide, providing ample opportunity for long-term growth if these companies can ramp up their supply quickly and build compelling brands," according to Bloomberg. ACB Stock Problems RemainAt last Friday's close of $3.68, Aurora Cannabis stock is cheap in price tag only. The shares still trade at a whopping 500x forward earnings. However, the company isn't profitable, though management is trying to get there."As a result of its focus on profitability, adjusted EBITDA losses narrowed to $12 million in the quarter, down from $37 million in the third quarter," said Morningstar. "Nonetheless, full-year adjusted EBITDA losses widened by $100 million versus 2018 to $156 million for the full year, reflecting higher overhead expenses to support growth."That's fine and dandy, but some channel checks suggest Aurora's inventories are increasing, indicating management didn't properly forecast demand. Remember that when the company reported fiscal fourth-quarter results last month, it said revenue was up in its medical and Canadian consumer businesses, but it also said "production volume increased 86% sequentially to 29,034 kgs."For Aurora Cannabis stock, two of the bright spots include a 3% margin on revenue increase to 58% and, perhaps more importantly, declining production costs. In the fiscal fourth quarter, "cash cost to produce per gram sold declined 20% sequentially to $1.14 per gram in Q4 2019," according to the company. Bottom Line: Making Good South of the BorderOne of the keys for Aurora Cannabis stock, though its more of a medium- to long-term story, is the company's ability to establish some hold in the fast-growing U.S. market. This is a reoccurring across the Canadian cannabis space and one investors must be mindful of.The company has some presence in the U.S. via a marketing deal with the Ultimate Fighting Championship (UFC), but as price action in Aurora Cannabis stock suggests, investors are demanding more.Aurora Chairman Michael Singer recently said Nelson Peltz, the activist investor that has a stake in the company, has been setting up meetings between the cannabis firm and potential U.S. partners.The company "lans to aggressively pursue the United States cannabis market with an acquisition in the hemp-derived CBD space as its likely first big play," according to CNN Business.Such a move could appease investors, but for Aurora Cannabis stock to move higher on acquisition news, the company cannot overpay for its target, and management must prove adept at realizing cost synergies and effectively integrate the acquired firm when the time comes. Bottom line: execution remains a critical part of the Aurora Cannabis stock narrative.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post Aurora Cannabis Flirts With Penny Stock Status appeared first on InvestorPlace.
Hexo (NYSE:HEXO) stock is crashing. In just two days, shares dropped from $4 to $2.53 with no signs of recovery at all. It may fall even farther. The entire cannabis sector is under pressure, but the performance of HEXO has been exceptionally bad.Source: Shutterstock There are some things going on here that are very interesting. Chief Financial Officer Mike Monahan recently resigned after just four months with the company. He said that he wanted to spend more time with his family and that the position required him to often be away from home.Sometimes the departure of a senior executive can be bad for a company's stock price. In the case of HEXO stock, in the following days after the announcement the stock only drifted marginally lower.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Hexo Withdraws Its OutlookThen the bombshell hit. On Oct. 10, HEXO announced that it would be withdrawing its previously issued financial outlook for 2020. This is what caused the stock to get crushed. Why is this so bad? It's because many investors believe the optics are terrible and that there could be serious issues with the company. * 10 Groundbreaking Technologies Created by Universities The story of Monahan's departure seems somewhat questionable. It's kind of hard to believe that a senior-level executive would accept a position without understanding how much time and travel would be required. Maybe this is true, or maybe he just couldn't get along with some of the other members of management. Regardless, I wish him all the best.After this, the company withdrew its earnings outlook. This is obviously a concern to investors because the perception is that, at best, there has been some very sloppy accounting at HEXO. At worst, some investors could believe it's an indication that Monahan saw something that he thought was unethical or illegal going on. This made him decide to cut his association with the company.I am not saying that this is what happened. It is entirely possible that Monahan's story is true and that there is a legitimate reason for withdrawing the outlook. It's the optics that are the problem. These actions have scared shareholders, or prior shareholders at this point, and this is what caused them to sell their stock so aggressively.Hexo will be reporting its annual results for fiscal 2019, which ended in June, on Oct. 24. I am looking forward to the conference call. This is when the management discusses the results and other issues. There will probably be serious questioning by angry shareholders that have lost a lot of money. A Look at HEXO StockAs recently as May, HEXO stock was trading above $8 a share. The most recent close was at $2.53. This was the lowest price of the day which means that there wasn't any rebound or recovery.At the time of this writing, Mark Putrino did not have any positions in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Beverage Stocks to Buy Now * 10 Groundbreaking Technologies Created by Universities * 5 Semiconductor Stocks Worth Your Time The post HEXO Stock Has Crashed -- And It May Drop Even More appeared first on InvestorPlace.
MKM Partners analyst Bill Kirk cut his stock price target on Aurora Cannabis Inc. on Monday and said there is still some optimism in the stock “to shake and trim.
“We see a headwind for the Canadian cannabis market, ahead, based on sizable industry supply,” Seaport Global analyst Brett M. Hundley said.
The Internet boom certainly provides a pretty good metaphor for what's been happening to the cannabis space. In the early phases, the optimism was contagious (remember how adding a .com to a company name could greatly boost the stock value?). But markets can only propel the bullishness for so long. Eventually, there is a plunge, which can be brutal.Source: Jarretera / Shutterstock.com Unfortunately, when it comes cannabis stocks, we're in this stage right now.Now ultimately, I think there will be some huge winners - and yes, many operators that will simply be consolidated or go bust. This will accelerate as it gets more difficult to raise money.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo which cannabis stocks to focus on? Which ones will be the long-term winners? Well, Tilray (NASDAQ:TLRY) stock looks interesting. True, I have been negative on the company for some time. But given the much more attractive valuation, TLRY stock should get some consideration for a buy. * 10 Super Boring Stocks to Buy With Super Safe Returns The company has the advantage of having raised substantial amounts when the markets were bubbly (this was done primarily with convertible securities, which will likely not be turned into stock any time soon).Tilray also has diverse revenue sources, which span adult-use cannabis, food products and medical treatments. Oh, and it has been fairly disciplined with its spending and mergers and acquisitions deal-making: just take a look at its acquisition for Manitoba Harvest, which has been a nice catalyst for growth. Negative Sentiment Is Off the ChartsKeep in mind that - for the most part - it's hard to find many cannabis bulls anymore. Besides, when scanning through the headlines, it seems that a majority of analysts are negative.To get a sense of how extreme things are, look at what happened this week with the announcement of preliminary fourth-quarter earnings from HEXO (NYSE:HEXO). Unfortunately, it fell significantly below expectations (which, by the way, were already depressed).The company's Q4 forecast now calls for a range of 14.5 million CAD to 16.5 million CAD. As for the analysts' consensus, it was a much more robust $24.8 million. HEXO even withdrew its outlook for fiscal 2020 (it had previously forecasted revenues of 46.5 million CAD to 48.5 million CAD).On the news, the stock sunk by more than 22%. Investors also sold off many of the other top names in the sector. For example, Tilray stock dropped over 13% to $20.65, putting the year-to-date return at a miserable -71%. In fact, TLRY stock is not far off from its $17 initial public offering price (the company went public in July 2018).But there are really few signs of serious deterioration of Tilray's business. In the latest quarter, revenues soared by 371% to close to $46 million.True, the company continues to lose money. But this is expected as it needs to scale operations to keep up the growth ramp. Bottom Line on Tilray StockOf course, predicting a bottom is a dangerous business! After a major boom, the plunge can easily go to the extreme.So, with Tilray stock, it's probably best to average into a position, as the volatility will likely continue. What's more, there are a handful of other top-tier cannabis stocks, like Cronos Group (NASDAQ:CRON) and Canopy Growth (NYSE:CGC), that are worth considering as well.Again, as with the dot-com implosion that happened nearly 20 years ago, the best strategy then was to focus on the major brands like eBay (NASDAQ:EBAY) and Amazon.com (NASDAQ:AMZN). And I think the same is likely to be the case with today's cannabis stocks.Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post Has Tilray Stock Finally Hit Rock-Bottom? appeared first on InvestorPlace.
(APHA) will be the first marijuana company to report quarterly earnings since last week’s cannabis stock selloff. Its fiscal first-quarter earnings announcement is scheduled for Tuesday, after the market closes. Aphria stock (ticker: APHA) is down about 17% so far this year through Friday’s close at $4.71, while the S&P 500 index has risen 19%.
Canadian cannabis producer Hexo (NYSE:HEXO) preannounced its Q4 earnings on Thursday. It reported that its Q4 revenue would be well below its previously issued guidance.Source: Shutterstock In addition, the company withdrew its fiscal 2020 outlook. HEXO was punished, tumbling 23.6% on Thursday. The company blamed issues in the Canadian cannabis market for the miss. Hexo's Q4 Guidance Slammed Tilray StockAs a result, multiple other marijuana stocks, including Tilray (NASDAQ:TLRY) stock, were slammed as investors reacted to the bad news. By the time the bell rang on Thursday, Tilray stock had plummeted 13.5% to $20.65. It rebounded slightly on Friday, climbing 1.5% to $20.96.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * Is Shopify (SHOP) Stock the Right Buy in E-Commerce Now? Tilray made statements that indicated that the Canadian cannabis market is having huge difficulties. That triggered panic by investors who were worried that Hexo's problems are a bad sign for other cannabis producers. Specifically, TLRY reported that:"Slower than expected store rollouts, a delay in government approval for cannabis derivative products and early signs of pricing pressure are being felt nationally. The delay in retail store openings in our major markets has meant that the access to a majority of the target customers has been limited. Additionally, regulatory uncertainty across the pan-Canadian system and jurisdictional decisions to limit the availability and types of cannabis derivative products have contributed to an increased level of unpredictability."Investors hate unpredictability, so that's worrisome for many marijuana stocks, including Tilray stock. Negative pressure on cannabis sales is not good news at a time when many producers, including TLRY, are struggling to become profitable.And the possibility that the coming rollout of edibles and other cannabis-infused products --slated to be legalized by Canada in December -- could be in trouble, is the last thing that the owners of TLRY stock and other cannabis names want to hear. Other Marijuana Stocks Were Also HitOther cannabis producers suffered significant stock price declines as the market reacted to Hexo's guidance. Canopy Growth (NYSE:CGC) sank 10.6%, Aphira (NYSE:APHA) lost 14.3%, Aurora (NYSE:ACB) dropped 9.5% and Chronos (NASDAQ:CRON) slid 7.2% on Thursday. Problems in the Canadian Cannabis MarketThe statement by Hexo is a stark reminder of the many challenges facing the Canadian cannabis market. Leadership shakeups, production and distribution challenges, and slow retail store rollouts are among the problems that have plagued the sector. Also dragging down marijuana stocks are lower than expected public demand for recreational marijuana and the black eye of a major producer losing its license after being caught growing pot illegally. As a result of all these negative catalysts, the Canadian recreational cannabis market has not been the gold mine many had hoped for.In the latest challenge facing marijuana stocks, sales of vaping products that incorporate cannabis extracts are now in jeopardy due to the CDC's investigation into lung injuries and deaths that may have been caused by vaping. Such vaping products are slated to be legalized by Canada in December.Most of the reported illnesses and deaths were caused by cannabis products that contain THC. Even if vape products with cannabis extracts aren't banned, the investigation is likely to scare off many potential buyers. The Outlook of Tilray StockConsidering that just over a year ago, TLRY stock hit $214.06, is it a buy after it closed on Friday at $20.96? The shares' performance has been underwhelming in 2019, with Tilray stock down nearly 72% in 2019.Most analysts have a "hold" rating on Tilray stock, and their median 12-month price target on TLRY is $52.00. But those numbers don't yet reflect Thursday's panic. It's likely that TLRY stock will bounce back from its HEXO-induced loss as cooler heads prevail, but the long-term outlook of this cannabis stock remains hazy. As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post Tilray Stock Hammered as Investors Turn on Cannabis Producers appeared first on InvestorPlace.
Shareholders of Aurora Cannabis (NYSE:ACB) have been very disappointed and this is not surprising. ACB stock once seemed to have a tremendous amount of potential, but things have not worked out very well and it has been losing a significant amount of money.Source: ElRoi / Shutterstock.com For fiscal 2019, which ended in June, Aurora reported a loss of $290 million. This worked out to be a loss of 29 cents a share.Because of these losses, it is not surprising that ACB stock has seen a significant decline. At this time last year, shares were trading at close to $12. Since then the price has dropped by about 60% to current levels around $4.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat was before yesterday's bleak outlook from Hexo (NYSE:HEXO), which sent the entire pot stock sector lower, including Aurora Cannabis stock which lost 9.5%. Aurora's Global Growth StrategyOne of the ways that the company believes can help it to turn things around is to have an extensive focus on expanding its global operations. Last year it expanded its sales and operations to more than 20 countries. It is trying to increase its distribution channels and to develop one of the largest distribution networks in the cannabis industry. * 10 Best Cloud Growth Stocks Right Now By securing various supply agreements and partnerships in strategic locations throughout the world, the company believes that it will be well positioned to access new markets as they emerge and grow. In Aurora's most recent report, the management discussed what it believes are important developments with regards to this global growth strategy.The Italian government picked Aurora to be the sole provider of medical cannabis. The Federal Institute for Drugs and Medical Devices in Germany selected it to be one of only three companies to grow cannabis in the country.Aurora was also given approval to ship medical cannabis to a pain treatment center in Poland and in Malta the authorities approved its application to establish a cannabis operation.In addition to these developments, Aurora also secured a supply agreement with a wholesaler in the Czech Republic. It was also picked by Luxembourg's Health Ministry to supply medical cannabis. Aurora is clearly making global expansion a significant part of its strategy.Time will tell whether this strategy will be successful or not. However, some investors question whether the company has taken on more than it can effectively manage. * 10 Great Biotech Stocks to Buy in Q4 The large number of acquisitions that Aurora has recently made pursuing this strategy has given the company a very big helping of Goodwill and intangible assets in its valuation. They have probably contributed to the company's losses and to the decline in its stock price. A Look at ACB stockACB stock went into a freefall in mid-September after breaking support the $5.50 level. This level was support at the end of August. After dropping about 20% and becoming very oversold it found support around the $4 level and broke its recent downtrend. Since then it has been consolidating between support around $4 and resistance around $4.50.At the time of this writing, Mark Putrino did not have any positions in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post Is Aurora Cannabis' Growth Strategy Enough to Turn Around ACB Stock? appeared first on InvestorPlace.
Technical analysis has a bad reputation. This isn't surprising because most of the technical analysis of marijuana stocks that I see is not very good. Some is downright terrible.Even worse, some analysts are proponents of bizarre techniques like Gann Theory or Elliot Waves. These methods are like the Loch Ness Monster or UFOs. They may be fun to talk about, but they are not real.What is real is the fact that in financial markets, certain levels are more important than others. These levels have more supply and demand at them. In addition, in financial markets prices are always doing one of three things -- going up, going down or staying the same. When understood and applied correctly, technical analysis should help you identify these levels and trends. This can lead to low-risk trading ideas.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Super Boring Stocks to Buy With Super Safe Returns After becoming the most oversold that they have ever been two weeks ago, many of the larger cannabis stocks have broken their downtrends and have been consolidating or trading sideways. It is too soon to tell whether or not they will turn around, but we have not seen the capitulation volumes that come with significant bottoms. This means there is a chance that they could start to trend lower again. Marijuana Stocks With Big Technical Levels: Aphria (APHA)Aphria (NYSE:APHA) manufactures and sells medical cannabis in Canada and internationally. It currently has a market cap of about $1.3 billion.APHA stock went into a free-fall after it broke support around the $6 level. This level was the low in mid- and late August.After becoming oversold, it found some support around the $5 level. There is support at this level because it is where the low was in early August. It has now broken its downtrend and is consolidating above $5.The term oversold refers to momentum. Momentum is a measure of where the stock is now versus where it was X many days ago. If the average of this measurement gets to an extreme on the downside, it would be considered to be oversold.This action illustrates an important dynamic about markets. When they are oversold and get to important support, they tend to rebound. When they get to important support and are not oversold, they tend to break the level. Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB) is a Canadian-based company that grows and sells medical marijuana, indoor cultivation systems and hemp-related food products.ACB stock was in a freefall, but after becoming oversold it has broken its downtrend and is consolidating.It found support right at the $4 level. This illustrates how nice, round levels are important psychologically. There is really no logical reason for doing so, but investors like to place their buy and sell orders at numbers like $10 or $20.If ACB turns around and rallies, there is a good chance that it will hit resistance around the $5.50 level. This is because it was a support level in August in addition to being important psychologically. * 10 Best Cloud Growth Stocks Right Now Few investors think about this, but why would a level that was support become resistance? Consider the following. Those investors who bought the stock at the support level are losing money once it goes lower. They do not want to sell it for a loss, so they tell themselves that if it rallies back up to tbreakeven, they will sell it to get out at breakeven. The large amount of sell orders for supply of the stock at that level creates resistance. Canopy Growth Corp (CGC)Canopy Growth Corp (NYSE:CGC) produces, distributes and sells cannabis in Canada. It has a market cap of $7.9 billion.CGC stock has broken support around the $23 level. There was support at this level because it is where the recent lows were in late August and early September. It has now become a resistance level.This is an illustration of how levels that were support become resistance. Investors who bought it at the level are losing money when the support breaks and the stock goes lower. They don't want to take a loss and decide that if it rallies back to the level they will get out of it at breakeven.In addition to this, the short-sellers are making money when the stock goes lower. They believe they made the correct decision and tell themselves that if the stock rallies back, they will short more and add to their positions.Added to this are professional traders seeking to profit off of a clearly defined level, and you can see that there are three groups of investors who want to sell stock at the level. This supply of stock is what creates resistance. Cronos Group (CRON)Cronos Group (NASDAQ:CRON) produces and sells cannabis in Canada and Germany. Its current market cap is about $2.7 billion.CRON stock recently broke its downtrend line and has been consolidating. If you want to be successful, you need to understand the concept of trends.When markets are going higher, the forces of demand are in control of the market. When they are headed lower, the forces of supply are in control. When prices aren't moving or are trading sideways, the forces of supply and demand are roughly equal.The break of a trendline can illustrate that the leadership of the market is changing or at the very least equalizing. In the case here, the break of the blue downtrend line shows that the forces of demand have for the time being, become equal with the forces of supply. * 10 Great Biotech Stocks to Buy in Q4 Of course, drawing trendlines is an art and not a science. But with some practice and an understanding of just what it is that they are supposed to show, they can help you make investment decisions. Hexo (HEXO)Hexo (NYSE:HEXO) produces, markets and sells cannabis. The current market cap is about $945 million, according to Zacks.HEXO stock may be breaking support around the $3.90 level. This level was support at the end of July, the end of August, and then again over the past two weeks. It will probably become a resistance level if it breaks.This chart illustrates how market bottoms are typically more volatile than market tops. This is due to human emotions. Stocks are bought due to hope. Stocks are sold due to fear. Fear is a much more powerful emotion than hope.When markets are forming bottoms, like they did in July, August, and now, sellers are afraid that the stock will continue to drop. Because of this, they sell aggressively without caring too much about the price. This dynamic is what creates the volatility. Medicine Man Technologies (MDCL)Medicine Man Technologies (OTCMKTS:MDCL) provides cultivation consulting services to cannabis growers. The current market cap is about $130 million. MDCL failed at resistance after becoming overbought and is now trending lower.The levels around $3.90 were the top in April, and then again in May and June. This is the reason why there is resistance at this level.Overbought refers to the momentum of the stock. Momentum is where the price is today versus where it was X many days ago. When this number reaches an extreme to the upside, it is considered to be overbought.This is an important dynamic to understand about markets. When markets are overbought and get to important resistance, they tend to selloff, as is the case here. * Are These 10 High-Yielding S&P Dividend Stocks Traps or Treasures? When markets are not oversold or overbought and get to important support or resistance levels, they tend to consolidate before resuming the trend. Tilray (TLRY)Tilray (NASDAQ:TLRY) engages in the research, cultivation, processing and sale of cannabis. Its current market capitalization is $2.8 billion.TLRY stock broke support around the $25 level. There was support at this level because it is where the recent low was in early September. It has become a resistance level. The recent downtrend has been broken and the stock is trading sideways.Longer-term, if the TLRY continues to drop there will probably be some meaningful support around the $22 level. This is because this is where the stock hit the market last summer when it went public.This is because various stake holders, such as investment bankers who brought the company public, early investors, and the management do not want it to break that level. This may cause them to become buyers which would create support. Cannabis Sector Momentum Last week, cannabis stocks and other equities became the most oversold that they have ever been. This means that the stocks are trading at levels that are significantly below their recent averages. Typically, when stocks are this oversold they then to rally.However, there is an interesting dynamic occurring here. Usually when stocks or sectors are this oversold, they are capitulating.Capitulation mean that the sellers want to aggressively sell their stock. They do not care about the price. They just want to get out of the position because they are are tired of watching the price drop. These dynamics usually cause large amounts of volume to trade while the stock makes a large move lower. * Don't Give Up on These 4 Cannabis Stocks In the situation here, despite being historically oversold, there has not been a significant increase in the average trading volume. This could be an indication that the sector is not yet ready to turn around and it will continue to trend lower after the current consolidation that is occurring. CannTrust (CTST)If you follow cannabis stocks, you are probably familiar with the CannTrust (NYSE:CTST) story. If you aren't, you should be, because I think we will soon be hearing about similar situations at other cannabis companies.CannTrust once had a market cap of more than $1 billion and was considered an industry leader. Then it got caught growing cannabis in unlicensed grow rooms after a disgruntled ex-employee tipped of the authorities. And as is typically the case nowadays, the management of the company discussed their illegal activities in detailed emails that the have been seized.This led to the CEO being fired, the president resigning and the stock crashing.Now it turns out that CannTrust was also using illegal seeds to grow in legal grow rooms. This resulted in illegal cannabis being sold in the legal markets -- though a CannTrust spokesperson disputed the latter part.It should come as no surprise that Health Canada has suspended its license. The company will also have to buy back and probably destroy the cannabis that it has sold, among other steps. I am not so sure that CannTrust, now better known as "Can't Trust," will be around for much longer.As of this writing, Mark Putrino did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Super Boring Stocks to Buy With Super Safe Returns * 10 Winning Stocks to Buy and Stick With for the Long Haul * Don't Give Up on These 4 Cannabis Stocks The post 9 Critical Things to Watch in Marijuana Stocks appeared first on InvestorPlace.
Canadian marijuana stocks were getting slammed Thursday morning, few more so than Hexo Corp., which had lost nearly a quarter of its value by late afternoon.
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
[Editor's note: This story will be updated each week with new stocks and analysis. Please check back often for Mark's latest take on marijuana stocks.]Technical analysis has a bad reputation. This is unfortunate, but probably well deserved. Most of the research that I see, especially technical analysis of marijuana stocks, isn't very good. Much of it is downright terrible. And even after extensive research, the academic community still doesn't seem to have a definitive take on the practice.Most analysts look at charts and mindlessly try to identify patterns without actually understanding what they are supposed to mean. Even worse, some analysts are proponents of bizarre techniques like Elliot Waves or Gann Theory. In my opinion, these methods are like UFOs and Bigfoot. Sure…they may be fun to talk about but they are not real. Professional institutional traders do not use them.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat is real is the fact that in financial markets there are certain levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, in financial markets prices are always doing one of three things. They are either going up, going down, or staying the same. If understood and applied correctly technical analysis should allow you to identify these important levels and trends. This knowledge will benefit your investment style, regardless of what it is. * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains The action in many of the cannabis equities has been very weak. Many of the stocks in this sector are testing or have broken important support levels. Aphria Inc (APHA)Aphria Inc (NYSE:APHA) produces and sells medical cannabis in Canada and international markets.APHA stock broke support around the $6 level. This level was also support during the middle and then again at the end of August. If it continues to head lower there may be some support around the $5.20 level because it was where the low was in early August.The $6 level will probably now become a resistance level. This is because the investors who bought it when it was a support level are looking at losses now that the stock is lower. They tell themselves that if it rallies back to the level, they will sell their stock so that they can get out at breakeven.Those who sold it short at the support level are making money now that it is lower. They tell themselves that if it rallies back, they will short more and add to their positions. Both of these groups of investors will place their sell orders at the $6 level and this supply of stock creates resistance. Canopy Growth (CGC)Canopy Growth (NYSE:CGC) produces, distributes, and sells cannabis in Canada. It has a market cap of $8.7 billion.CGC stock has broken the $26.60 level which was the lower side of its recent range. It will probably become a short-term resistance level.If the stock continues to head lower there is a good chance that it will find support around the $23 level. This is because it is where the recent lows were in late August and early September.Levels that were support in the past tend to become support again because those who wanted to buy the stock at the level and didn't vow to themselves that if it drops back to the level, they won't miss it. This time they will buy it. * 7 High-Yield Dividend Stocks Set for Growth Those who shorted it at the level are looking at a loss when it rallies and goes higher. They tell themselves that if it comes back to the level then they will cover and close out the position at breakeven. This demand for the stock is what creates support at the level. Cronos Group Inc (CRON)Cronos Group Inc (NASDAQ:CRON) produces and sells cannabis in Canada and Germany. Its current market cap is about $3.5 billion.CRON stock just broke support around the $10.75 level and has dropped by over 10%. The $10.75 level was the bottom of the range over the past month, and it will probably become a resistance level. This move puts CRON back into a continuation of a longer-term downtrend that began in late March when it was trading around $24 a share. Since then the price has dropped by over 50%.This stock may drop much further. I don't see any clear support levels anywhere near current levels.Cronos continues to be hurt by its lack of leadership. The current CEO is only temporary and the Board of Directors has not yet selected a new person to run the company. KushCo Holdings, Inc (KSHB)KushCo Holdings, Inc (OTCMKTS:KSHB) produces and distributes packaging supplies. After the recent decline of the stock its market cap is $205 million.KSHB stock continues its freefall. It could be getting close to a capitulation which may mean that it could have a reversal and rally. Capitulation means that the sellers do not care about the price that they will receive for their shares. They just want their brokers to sell them. They want out at all costs so they can end the misery of watching the stock go lower everyday. * 7 Worst Stocks in the S&P 500 in 2019 This type of selling typically leads to large volatility and a large amount of volume trading. That is starting to happen here. The volume over the past few days has been very large and the stock is gapping down. Aurora Cannabis Inc (ACB)Aurora Cannabis Inc (NYSE:ACB) is a Canadian based company that grows are sells medical marijuana, indoor cultivation systems, and hemp related food products.After a weak earnings report and some analyst downgrades ACB stock has been in a freefall over the past three weeks. On the day of its biggest drop, it found support around the $5.50 level. There was support there because it is where the low was in early September. Now the stock has broken support around the $5 level. There was support at this level because it is where the lows were at the end of last year. It is also an important level psychologically. People like to buy stocks at nice round levels. It will now probably become a resistance level. * 5 Stocks to Buy That Could Double in 2020 ACB is oversold so there is a good chance that it has a relief rally soon. The last three times that it was this oversold a rally followed. The term oversold refers to momentum. Momentum is a measure of where the stock is today verses where it was X may days ago. When this number becomes an extreme difference from the mean to the downside it is considered oversold. Tilray, Inc (TLRY)Tilray, Inc (NASDAQ:TLRY) engages in the research, cultivation, processing and sale of cannabis. Its current market capitalization is $2.6 billion.TLRY stock has broken the bottom of its recent range and has been heading lower. Short-term, there may be some support around the $25.20 level because this is where the recent low was in early September. Longer-term, if the stock continues to drop there will probably be some meaningful support around the $22 level. This is because this is where the stock hit the market last summer when it wen public.The cannabis industry is entering a consolidation period where I believe we will see a large amount bankruptcies, mergers and acquisitions. This company may be a takeover target because it recently acquired a huge block of shares that it will try to sell over the next two years. A strategic partnership is probably the most realistic way of doing this. CannTrust Holdings, Inc (CTST)CannTrust Holdings, Inc (NASDAQ:CTST) produces and distributes medical and recreational cannabis in Canada. At least it used to. The survival of this company is doubtful. If you follow the cannabis industry, you are probably familiar with the CannTrust story. CannTrust, now better know as Can't Trust, got caught growing cannabis in unlicensed grow rooms after a disgruntled employee tipped of the authorities.As is typically the case nowadays the management of the company discussed their illicit activities and detailed emails that the have been seized.Then it turned out that CannTrust was using illegal seeds to grow in legal grow rooms which resulted in illegal cannabis being sold in the legal markets. * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains It should come as no surprise that this week Health Canada has suspended in license. Now the company will have to bear the costs of acquiring and probably ultimately having to destroy the cannabis that it has sold. I am not so sure that this company will be around for much longer.At the time of this writing Mark Putrino did not have any positions in the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cloud Stocks to Invest in the Future * 7 Next-Gen Growth Stocks to Buy for Long-Term Gains * 7 Cheap Stocks That Ought to Consider a Sale The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.