|Bid||8.97 x 1300|
|Ask||9.03 x 4000|
|Day's Range||8.90 - 9.43|
|52 Week Range||4.05 - 12.52|
|Beta (3Y Monthly)||2.27|
|PE Ratio (TTM)||41.81|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
It's been a couple of weeks now since Canadian marijuana producer Aurora Cannabis (ACB) announced its appointment of Nelson Peltz, CEO and Founding Partner of investment management firm Trian Fund Management, L.P., to be its new "Strategic Advisor." When that news broke, it sent Aurora Cannabis shares up 14% in a day.Cowen's Vivien Azer thinks that was the right reaction, reiterating an Outperform rating on ACB stock with a C$14.00, which implies about 15% upside from current levels. (To watch Azer's track record, click here)Viewing the news of Nelson Peltz's appointment in light of revelations gleaned from recent investor meetings with Aurora Chief Corporate Officer Cam Battley, Azer opines that it sees both parties benefiting from this partnership. From Aurora's perspective, of course, it's hiring an advisor with deep knowledge of the consumer packaged goods (CPG) industry, and numerous contacts with decision-makers, formed over decades of deal-making -- but this association is good for Peltz as well.The reason: Azer explains that Aurora has a lot of potential to grow and profit as the (legal) marijuana industry matures. And as it does so, Peltz stands to make a pretty penny off of the 20 million stock options that Aurora is awarding him as incentive to give good advice.Why does Azer think this? Consider:The final quarter of last calendar year (Aurora's Q2 2019) saw the company produce 7,800 kilograms of cannabis, "the highest level of kilograms produced among" Canadian licensed producers of the drug. Aurora's production even exceeded that of Canadian rival Canopy Growth (CGC), albeit the latter commands a market capitalization 68% higher than Aurora's $9.1 billion market cap. Furthermore, Aurora reached this higher level of production "despite having a significantly smaller amount of licensed square footage" in which to grow weed.At a minimum, this suggests that Aurora is a more efficient producer than its rival. It probably helps, explains Azer, that Aurora focuses on growing its cannabis indoors. As the analyst explains, "using indoor grows will become a competitive advantage as it will allow the company to minimize crop losses compared to greenhouse or outdoor grows."Such production efficiencies could also help Aurora to become a more profitable pot producer. Currently, Azer estimates that it costs Aurora C$1.92 to grow a gram of salable marijuana. But as production increases and efficiencies save on costs, the analyst sees this cost-per-gram falling to under C$1.Lower costs will lead to even higher profit margins for Aurora, says Azer -- indeed, "industry-leading gross margins." And when you consider that Aurora already reaps 61% gross margins on its product (versus 48% margins for Cronos, for example, or 29% margins for Canopy), this is saying a lot.Assuming Aurora succeeds in growing quarterly production to 12,000 kg in Q3, and 25,000 in Q4, the company is on track to produce 500,000 kg -- that's 500 metric tons \-- of weed annually by mid-2020. Azer expects this to translate into as much as C$742 million in sales that year, and if Aurora maintains this growth trajectory, nearly double that by 2022 -- C$1.3 billion, and $413 million in EBITDA to boot.That's reason enough for Azer to get excited -- and good reason for Nelson Peltz to do his level best to help Aurora meet its goals.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on ACB: * Can One Man Make a Difference for Aurora Cannabis (ACB) Stock? * Breaking Down the Aurora Cannabis (ACB) Investment Portfolio: Choom Holdings * Aurora Cannabis (ACB) Breaks Into the German Market More recent articles from Smarter Analyst: * Will New Streaming Service Propel Apple (AAPL) Stock to New Heights? * This Cannabis Stock Just Got a Huge Vote of Confidence * Apple's (AAPL) Streaming Video Buzz: Should You Buy the Hype? * Micron (MU) Stock Looks Poised for a Turnaround
HENDERSON, NV / ACCESSWIRE / March 22, 2019 / Many high-profile companies in the cannabis market have posted incredible gains since start of 2019 and this trend looks to continue. The race to profit from ...
Cannabidiol (CBD) is emerging as a red-hot category of the marijuana industry. CBD includes compounds in the cannabis sativa plant that do not produce a high. In fact, over the years, CBDs have been shown to have powerful therapeutic effects.Now it looks like the U.S. market could open up in a big way for this type of cannabis and several CBD stocks are gaining traction. The reason: In December, Congress passed the 2018 Farm Bill, which declared that CBD would no longer be treated as an illegal substance.So how big could this opportunity be? Well, according to research from the Brightfield Group, the market in the U.S. could hit $22 billion by 2022.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 10 Best ETFs to Buy in the Second Quarter No doubt, this could move the needle for marijuana stocks -- and here's a look at seven that stand out: Cronos Group (CRON)Cronos Group (NYSE:CRON) operates a vertically integrated cannabis platform, with a presence across five continents. In terms of the CBD opportunity, the company recently struck a strategic partnership with Gingko Bioworks, which has raised $430 million. The company's founder, Tom Knight, is known as the "father of synthetic biology" and his innovations -- such as with software to print DNA -- should allow for the creation of cannabinoids at a massive scale. This is critical because it can be difficult to produce pure forms that are cost-effective and precise.CRON also has the advantage of substantial financial resources to commercialize its cannabinoids. Last December, Altria (NYSE:MO) invested $1.8 billion into the company for a 45% stake. The deal is certainly a validation of CRON but it will also allow for much broader distribution and improved product development.Of course, a company like MO does engage in substantial due diligence before making an investment. In the latest earnings call, CEO Howard Willard said: "We believe the growth opportunities are significant and will extend across the globe as cannabis markets open. Selecting the right partner in this category was critical and we've done just that. Cronos strong management team has built unique capabilities to compete globally across the medicinal, recreational and nutraceutical categories." Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB), a Canadian based cannabis producer, has been building up its CBD business. Part of this has been with its investments in industrial hemp production, such as with the Radient facility in Edmonton. It is expected to get as much as 10,000 kilos per day.Next, ACB has been focused on revving up its product offerings. According to the latest earnings call, Chief Corporate Officer Cam Battley, the company is poised "to launch a broad line of CBD based wellness product in the near future."What's more, ACB has been aggressive with its dealmaking. For example, it has increased its equity position in Hempco and purchased Agropro, which is Europe's largest hemp producer. * 10 Stocks on the Rise Heading Into the Second Quarter Something else to keep in mind: Legendary billionaire investor Nelson Peltz has joined the company as an advisor. This is certainly a major vote of confidence. He not only has deep access to investment capital but a strong network of potential partners, especially in the consumer goods industry. Some of his investments include stakes in PepsiCo (NASDAQ:PEP), Procter & Gamble (NYSE:PG) and Mondelez (NASDAQ:MDLZ). Charlotte's Web (CWBHF)The inspiration for the founding of Charlotte's Web (OTCMKTS:CWBHF) was a CNN documentary -- in 2013 -- about Charlotte Figi, whose health was significantly improved because of a hemp extract.Fast forward to today: The company is the No. 1 brand for the hemp-derived CBD market in the U.S. It definitely helps that it has distribution across more than 3,000 retail locations.And yes, growth has been strong. In the latest quarter, revenues jumped by 57% to $17.7 million and adjusted EBITDA came to $5.4 million, up 31%.To better capitalize on the CBD opportunity, CWBHF recently issued $71.5 million in stock. This will be for cultivation and production to meet surging demand. Here's what the company's CEO, Hess Moallem, had to say: "In general, broader consumer awareness of the benefits of cannabinoids, namely cannabidiol (CBD), and whole plant hemp extract is driving increased uptake in both our retail channels and within our e-commerce platform."In other words, it seems like a pretty good bet that the growth will continue for some time. Zynerba Pharmaceuticals (ZYNE)Zynerba Pharmaceuticals (NASDAQ:ZYNE) is a clinical-stage biotech company that develops cannabinoid therapies for a variety of rare diseases. They include: * Fragile X Syndrome (FXS): This is a developmental disability that has been known to cause autism spectrum disorder. FXS impacts 71,000 people in the U.S. and there are no drug indications for it. * Developmental and Epileptic Encephalopathies (DEE): This is an epilepsy syndrome that involves severe cognitive impairment. About 45,000 children and adolescents have this in the U.S. * Autism Spectrum Disorder (ASD): This includes autism and Asperger's syndrome. ASD affects less than 1 million pediatric and adolescent patients. * 7 Retail Stocks That Will Continue to Rebound in 2019 ZYNE's main candidate is Zygel, which is a CBD formulation gel for transdermal delivery. As for the FXS treatment, there is expected to be a pivotal data release in the second half of this year. And if the trial is positive, then the company will file a New Drug Application (NDA) for Zygel in the first half of 2020. Canopy Growth (CGC)Since 2016, Canopy Growth (NYSE:CGC) has been building its CBD business, with a focus on consumer packaged goods. The company has since created a vertically integrated platform for that includes a set of technologies that have pending patents. What's more, the hemp division is expected to yield 7,000 kilos of hemp-derived CBD on an annual basis. Granted, this cannot be used in the U.S. market. Yet CGC is likely to be a solid partner. For example, the company recently struck a deal with Martha Stewart's Sequential Brands Group, so as to develop CBD remedies for pets.It helps that CGC has substantial resources, which came from a mega $4 billion investment from Constellation Brands (NYSE:STZ). STZ has a strong global footprint -- with operations in the U.S., Mexico, New Zealand, Italy and Canada -- as well as a set of well-known consumer brands, such as Corona Extra, Corona Light, Modelo Especial, Modelo Negra and Pacifico. All in all, there is quite a bit of synergy for CGC.In the meantime, the company is growing at a staggering pace. In the latest quarter, revenues soared by 282% to $83 million. GW Pharmaceuticals (GWPH)The origins of GW Pharmaceuticals (NASDAQ:GWPH) go back to 1998. It was then that Dr. Geoffrey Guy and Dr. Brian Whittle co-founded the company to focus on developing therapies using cannabinoid formulations to target areas like epilepsy, glioma and schizophrenia.As of today, the lead product is a liquid formulation of a CBD, called Epidiolex, which received FDA approval in 2018 (the expectation is that there will be an approval in Europe in the second quarter). The drug targets the rare conditions of Lennox-Gastaut syndrome (LGS) or Dravet syndrome, which are variations of epilepsy. Furthermore, there are other indications for Epidiolex, such as Tuberous Sclerosis Complex and Rett Syndrome. * 7 ETFs for a Millennial Portfolio But of course, the company has other treatments. Note that GWPH is looking to get approval in the U.S. for Sativex, which is an oromucosal spray for multiple sclerosis. It is currently available in 25 countries. Horizons Marijuana Life Sciences ETF (HMLSF)If you do not want to buy individual CBD stocks, then you can consider an exchange-traded fund, such as the Horizons Marijuana Life Sciences ETF (OTCMKTS:HMLSF). With this, you'll get exposure to companies like Canopy Growth, Aurora, GW Pharamceuticals, HEXO and Tilray (NASDAQ:TLRY).In all, there are 59 stocks in the portfolio and the net assets are about $1 billion (in Canadian currency). The expense ratio is also 0.75%.Tom Taulli is the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. 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 * 7 Retail Stocks That Will Continue to Rebound in 2019 * 5 Stocks To Buy for the Happiest Employees * 7 ETFs for a Millennial Portfolio Compare Brokers The post 7 Marijuana Stocks to Play the CBD Trend appeared first on InvestorPlace.
The ongoing wave of cannabis legalization is good for pot companies, but the trend could be a downer for alcohol stocks, warns DataTrek.
Cannabis stocks are climbing this year and Aurora Cannabis (NYSE:ACB) is among the leaders of that pack. Shares of ACB stock have nearly doubled year-to-date and are in the midst of a breathtaking March rally of more than 33%.Source: Shutterstock Returns like those, particularly in the short time frames, might give investors reasonable pause about Aurora Cannabis stock, or any other stock for that matter. Indeed, the risk/reward proposition on ACB stock looks a lot different today than it did at the start or 2019. In terms of upside potential, Aurora Cannabis stock would need to rally another 28% to reclaim its 52-week high.That is not an impossible climb for ACB stock, but the near- to medium-term issue is finding upside catalysts because plenty of good news is already baked into this marijuana stock. For example, ACB surged earlier this month on news activist investor Nelson Peltz is joining the company as an advisor. That sent ACB stock to a double-digit intraday gain and the shares are up more than 11% since then.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What Analysts Say About ACB StockSell-side analysts are not correct about any stock 100% of the time. Investors that acknowledge that can help mitigate disappointments. That said, some analysts are bullish on ACB stock. * 10 Stocks on the Rise Heading Into the Second Quarter Earlier this month, Cowen's Vivien Azer -- one of the most respected analysts tracking marijuana equities -- initiated coverage of Aurora Cannabis with an Outperform rating and a price target that works out to the equivalent of about $10.50 in U.S. dollars."While establishing 20% market share has been an early success story in Canadian adult use cannabis, the company is uniquely positioned to drive leadership in both share and profitability," Azer wrote in a note, according to Barron's.The analyst "believes that Aurora will deliver positive earnings before interest, taxes, depreciation and amortization by its fiscal fourth quarter in June, making it one of the first of its peers to reach this milestone," reports Barron's.Some analysts also view valuations on ACB stock as favorable relative to other marijuana names. Consider this about the valuations assigned to some weed equities: Aurora Cannabis stock trades at a forward P/E ratio of 101 and a price-to-book ratio of 3, according to Morningstar data, and that's considered a value relative to its peer group. Peltz PowerAs was noted above, news of the activist investor Peltz getting involved with Aurora Cannabis is priced into the shares, but that does not diminish the importance of this news going forward. One of the biggest drags on Aurora Cannabis stock has been the company's inability to form partnerships with more mainstream companies as some of its rivals have.Think Constellation Brands (NYSE:STZ) taking a multi-billion stake in Canopy Growth (NYSE:CGC) or Altria (NYSE:MO) forming a partnership with Cronos Group (NASDAQ:CRON). Last year, it was rumored that Coca-Cola Co. (NYSE:KO), the world's largest soft drink company, held talks with Aurora to develop cannabidiol-infused beverages, but a deal did not materialize.Peltz has long tradition of working with management teams -- particularly at large consumer staples companies -- to streamline operations and bolster efficiencies to enhance profitability.Aurora Chairman Michael Singer mentioned the beverage, cosmetics, health and wellness and pharmaceutical industries as potential growth areas for his companies and Peltz could help the upstart cannabis company make inroads into those arenas. * 5 Stocks To Buy for the Happiest Employees The Bottom Line on ACB StockAurora Cannabis definitely shows promise in the marijuana space, and Nelson Peltz only adds to the pot stocks' legitimacy. For now, however, all of the good news looks priced into ACB stock -- even if a valuation of 100x forward earnings is a steal in the cannabis area.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Specialty Retail ETFs to Buy the Industry's Disruption * 5 Stocks To Buy for the Happiest Employees * 3 Out-of-Favor Consumer Stocks to Buy Compare Brokers The post There's Smoke, But Is There Still Fire for ACB Stock? appeared first on InvestorPlace.
[Editor's note: This story was previously published in February 2018. It has since been updated and republished.]Often, when analysts or bloggers talk up the potential of marijuana stocks, the focus is on the consumer side of the industry. But some of the best stocks in the pot sector may be medical marijuana stocks.Indeed, it's on the medical side where growth likely is to be largest in the near term. Canada did legalize recreational marijuana in October, but investors promptly sold the news in response. U.S. legalization is likely to be a long slog. Attitudes are mixed in Europe -- but even in legalized markets anywhere, black market (and untaxed) operators will be able to take share.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, approval of medical marijuana (in the U.S. and elsewhere) seems to be moving at a faster pace. In such a highly regulated market, black market and even smaller producers likely will be shut out. Quality and consistency will be key. Here, scale will matter. And those companies that win early have the best chance of becoming market leaders -- and providing big gains for investors. * 10 Stocks on the Rise Heading Into the Second Quarter As always -- and particularly in this space -- investors need to mind the risks and size positions accordingly. But for investors who see medical marijuana stocks as the next big thing, these three are the best stocks for investors enamored with weed.Source: Shutterstock Charlotte's Web (CWBHF)Charlotte's Web (OTCMKTS:CWBHF) has become one of the leading players in CBD oil (cannabidiol). And though Charlotte's Web products are made from hemp -- at least for now -- instead of marijuana, the stock still looks like one of the best plays in the sector.InvestorPlace's Matt McCall named CWBHF (the stock also trades on the Canadian Securities Exchange, ticker CWEB) as his pick of the best stocks for 2019. And the case makes some sense. CBD oil sales are soaring and Charlotte's Web is a market leader. As McCall pointed out, the federal farm bill in the U.S. provided a catalyst by legalizing hemp.With so many customers yet to try CBD oil -- and so many existing users attached -- market growth should be huge. And while CWBHF isn't cheap from a valuation standpoint, its position as a market leader should allow it to grow into its valuation.Source: Shutterstock Cronos (CRON)Of late, marijuana producer Cronos Group (NASDAQ:CRON) has made the headlines for its consumer business. Most recently, tobacco giant Altria (NYSE:MO) invested some $1.8 billion in the company. The combination of Altria's advertising and distribution reach and Cronos' production capabilities would seem best fit for the consumer side of the business.But investors can't ignore that Cronos is a medical marijuana stock as well. In fact, it's that business that drives the majority of revenue at the moment. And it also has given the company a beachhead in multiple markets around the world, from its home market of Canada to Germany, Israel and Poland. * 5 Cloud Stocks to Help Your Portfolio Fly I wrote after the Altria deal that investors should stay patient with CRON stock. And in this market, that might still be wise advice. But with the stock seemingly having stabilized at around $20 it looks as if this stock is for real.Source: Shutterstock CannTrust (CTST)CannTrust (NYSE:CTST) has been one of the biggest victims of the post-legalization selloff. The stock lost more than half its value and touched a 52-week low in the process last year. Since it's December fall, it has more than doubles and remains on the uptrend.Unlike many peers, the company is profitable. And its established leadership in the Canadian medical marijuana industry should drive consistent growth and allow CannTrust to stay profitable. There is some retail exposure here as well, but unlike peers, CannTrust seems to have room to drive upside on the medical side alone.CannTrust also was able to get a listing on the New York Stock Exchange this year. Admittedly, uplisting hasn't helped pot stocks in and of itself (most notably Aurora Cannabis (NYSE:ACB) took a lot longer to take off than was expected), but it certainly didn't hurt.From a profitability standpoint, at least, CNNTF seems like one of the best stocks in the pot sector. And with valuation near the lows, at least some of the risks here likely are priced in.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 of the Best Stocks to Buy for a Dovish Federal Reserve * 5 Best Fidelity ETFs for Retirement Savers * 7 Blue-Chip Stocks That Could Lead the Market Higher Compare Brokers The post 3 Medical Marijuana Stocks to Buy appeared first on InvestorPlace.
CALGARY , March 21, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, is pleased to announce that, subject to the approval of the Alcohol and Gaming Commission of Ontario (the "AGCO"), it has been selected to assist with establishing and operating a retail cannabis store by a third winner of one of only 25 opportunities to apply for an operator's licence (the "Third Winner") as a result of the AGCO's Expression of Interest Application Lottery conducted on January 11, 2019 (the "Lottery"). Subsequent to previously announcing that High Tide had been selected to assist two other Lottery winners, the Third Winner acknowledged its need for support and chose High Tide to help open a retail cannabis store at a proposed location in Toronto, Ontario .
Aurora Cannabis Inc. (ACB) closed at $9.80 in the latest trading session, marking a -1.61% move from the prior day.
Shares of Aurora Cannabis (NYSE:ACB) have been soaring lately, up 25% in just a few trading sessions. Because of this giant move, investors are wondering if now's the time to get in on ACB stock or if a 25% rally means they missed their chance.Source: Shutterstock What's the verdict?I wouldn't say there's no upside left, but the risk-reward profile has certainly muddied. Unfortunately, investors who are suffering a case of FOMO -- a "fear of missing out" -- have no reason to be. There was ample time to buy this name, even after the big rally.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLet's look at the charts to see why. Trading ACB Stock Click to Enlarge There are so many choices in the investing world that I do not like to be a "told you so" person. Meaning that even studious followers of the stock market can't act on everything they see and read. In the case of ACB stock, though, perhaps investors can extract a lesson. * 7 Video Game Stocks on Steep Discount Notice how the stock gapped higher by about $1 per share last week, closing near $9 after previously closing near $8. Many would argue that this ~12.5% gain was simply too much of a rally and they'd have to move on to something else. I needed to see how ACB stock would trade over the next few days, too, as I don't want to chase a double-digit move.The next day ACB stock put in an "inside day." That's where a stock's daily range trades within the range of the prior day. Notice on the chart above how the second candle following the big gap-up candle is within its range? After a big rally like this, that's a great consolidation pattern that bulls want to see. It shows that longs aren't winning to sell and shorts don't have enough "oomph" to drive it down.The next day, ACB stock began what looked like another inside day, before rocketing higher. In other words, this price action allowed investors to hop on before an 11% move higher.So what now?Shares of Aurora Cannabis stock are stretching into overbought territory. However, that does not mean it cannot continue higher. I wouldn't mind seeing how ACB stock does over the next few sessions and if we get a slight pullback before moving higher again.Keep in mind, ACB stock has breached $12 more than once in the past 12 months. Perhaps it's on its way of doing it a third time. Valuing Aurora Cannabis StockSo what got Aurora Cannabis stock rallying so strongly anyway? The company brought activist investor Nelson Peltz on board to advise on partnerships and global expansion.They didn't pick a bad advisor, either. Peltz has a long list of contacts and the hedge fund manager is a master in the consumer packaged goods space. Whether this leads to a partnership with a well-known blue-chip company or not remains to be seen. But adding him in this role certainly doesn't hurt Aurora's chances.That said, we're still very much in the "land grab" phase of the cannabis market. While growth is impressive -- as ACB stock grew sales 339% year-over-year last quarter -- the valuations do not support these names. For instance, while revenues more than quadrupled last quarter, sales came up just short of $39 million. With a $10 billion valuation, that growth better continue for some time in order for it to be justified.But if there wasn't an opportunity here, we wouldn't have Constellation Brands (NYSE:STZ) taking a multi-billion stake in Canopy Growth (NYSE:CGC) or Altria (NYSE:MO) doing the same thing with Cronos Group (NASDAQ:CRON). There's money to be made and an opportunity to be had with states and countries legalizing marijuana, both for medical and recreational use.That said, it's not a short-term or risk-free endeavor for investors.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Invincible Stocks Leading The Bull Market Higher * 5 Dow Jones Stocks Coming to Life * 7 of the Best High-Yield Funds for 2019 and Beyond Compare Brokers The post Did You Miss Your Chance to Buy Aurora Cannabis Stock? appeared first on InvestorPlace.
The cannabis industry is unique from other sectors in the market, meaning that getting financially involved tends to look a little different. Leafbuyer Technologies Inc (OTC:LBUY), Aurora Cannabis Inc (NYSE: ACB, TSX: ACB), Shineco Inc (NASDAQ:TYHT), and New Age Beverages Corp (NBEV) represent 4 marijuana stocks leading Wednesday's bull charge. Nowadays, consumers depend on online resources to research the products they are interested in buying and, prior to Leafbuyer's platform, there hadn't been a reliable source for information on cannabis and related products.
So far, 2019 has been good to Cronos Group (NASDAQ:CRON). Its share price has more than doubled this year. And the CRON stock gains make some sense.Indeed, as I wrote in December, the $1.8 billion investment in CRON stock by Altria (NYSE:MO) seems to be a game-changer. Among cannabis stocks, only Canopy Growth (NYSE:CGC), with $4 billion in hand from its deal with Constellation Brands (NYSE:STZ), looked to be in a stronger financial position. And yet, amid a market sell-off, investors largely shrugged at Cronos Group stock.That's changed in 2019, obviously, and perhaps it's changed a little too much. I still believe CRON stock needs to settle down. And I'm not alone. Wall Street has turned notably bearish on the shares in recent weeks. Ahead of Cronos Group earnings next week, those analysts might have a point.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cautious Turn on CRON StockAs MarketWatch pointed out last week, the Street on the whole actually sees downside ahead for CRON shares. Some 11 analysts on average have a target price of $20.30, or 6.6% below current levels.And recent coverage hasn't been all that positive. Per MarketWatch, BMO Capital Markets downgraded CRON to underperform. Analyst Tamy Chen pointed out that CRON trades at 80x EBITDA estimates -- two times the multiple sported by Aurora Cannabis (NYSE:ACB) and higher than Canopy Growth.Chen isn't alone. GMP Securities cut Cronos to hold earlier this month. Cowen (NASDAQ:COWN) initiated at neutral. Jefferies Financial Group (NYSE:JEF) began its coverage of Cronos Group stock with an underperform in late February (though CRON stock rose anyway). * Top 7 Service Sector Stocks That Will Pay You to Own Them To be sure, the Street isn't as always right. And even bearish analysts -- including the team at Jefferies -- have pointed to a massive opportunity in both recreational and medicinal cannabis.But for investors looking for the best cannabis play, it's worth noting that the analysts aren't just focused on valuation. BMO has pointed out that Cronos is trailing other Canadian producers in building out capacity. According to Yahoo! Finance, Jefferies cited concerns about when, exactly, Cronos would spend the funds from Altria -- and how much support the tobacco giant would give the pot producer in the early going.While it's easy to dismiss analyst concerns -- and, again, it's far from guaranteed that the Street is correct -- the factors driving the downgrades should be given some consideration. This isn't a case of analysts simply hollering about near-term valuation metrics, or arguing that cannabis stocks represent some sort of bubble.The common thread in recent coverage isn't that Cronos Group is failing or that it has no opportunity. Rather, the worry is that the company isn't moving fast enough in an industry where being a first mover increasingly looks like a key advantage. Earnings and Cronos Group StockIt's not just analysts who are making that point. InvestorPlace contributor Luke Lango made the case last month that Canopy Growth, not Cronos, was the best play in cannabis. One reason: CGC stock is actually cheaper on a per-kilogram basis.That can change if Cronos ramps production and puts its Altria funds to work. So far, however, that hasn't quite been the case. In fact, the company earlier this month swapped its shares of privately held Whistler Medical Marijuana for shares in Aurora Cannabis. That deal highlights the difference between the two companies. * 15 Stocks That May Be Hurt by This Year's Big IPOs Aurora's strategy clearly is to take as many shots at as many opportunities as possible in the shortest amount of time. With that strategy, it's possible that Aurora is taking on too many projects. But in a fluid market (from both a competitive and regulatory perspective), and one with multiple products (recreational, medical, CBD, edibles, etc.), Aurora is trying to gain exposure to as many markets as possible.Cronos doesn't have to take the same path as Aurora. But with the stock near the highs -- and triple late November levels -- it's going to need to show something with earnings next week. That may be discussion of what exactly it plans to do with its $1.8 billion in newly received cash. It may be clarity on Altria's role. (Note that Altria's senior director of corporate strategy is joining Cronos as chief financial officer, perhaps a step in the right direction.) It may be talk of additional M&A, after a huge win on the Whistler deal. (Cronos appears to have invested CAD$4 million [$3 million] in the company - and received C$175 million in Aurora stock.)Whatever it is, with the highest valuation in the cannabis stock, the status quo isn't enough. Cronos needs to post an impressive earnings report next week -- and not just in the numbers. Rather, the company needs to convince investors that it can take advantage of its cash, and put that cash to work to drive growth. It won't be easy - and at these prices, expectations are going to be high.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Financial Stocks to Invest In Today * 7 Single-Digit P/E Stocks With Massive Upside * 5 Chip Stocks on the Rise Compare Brokers The post Who's Made The Right Call On Cronos Group Stock? Altria or Analysts? appeared first on InvestorPlace.
The fact that Tilray posted a GAAP net loss of $0.33 per share versus expectations for a loss approximately half that size appears to be neither here nor there at the moment. In the case of Tilray, the company paid $317 million to bring in Manitoba Harvest.
We often hear jokes about the lofty valuations of cannabis stocks. They have huge market capitalizations with only a tiny fraction of them in actual revenues. Tilray (NASDAQ:TLRY) is perhaps the poster child for that joke since its short squeeze that occurred last September. Then Tilray stock skyrocketed to $300 per share in a day, but only to perhaps mark the absolute top forever.Source: Shutterstock First, let me assure you that I am not a perma-bull on pot stocks. Yes, I only trade them from the long side, but I use the technicals to guide my decisions. A few weeks ago, I shared a long entry opportunity in Tilray stock and it paid quickly.This morning, the stock is spiking and there could be another setup looming.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLast night, TLRY reported earnings and investors are happy with what they saw because TLRY stock is spiking on the headline. But in classic TLRY fashion, the knee jerk reaction last night was violent as the stock fell $5, then rallied at $4. This morning, it is still holding in the green up 3%.The results were mixed as management beat the sales expectations but also reported some extra expenses. For now, this is something Wall Street should ignore for as long as TLRY is a growth stock.If this were a mature company, then investors can demand tighter profit controls, but this is a situation where the cannabis companies are plowing into completely new territory so they deserve a lot of leeway, more so than usual in fact. * The 10 Best Stocks to Buy for the Bull Market's Anniversary The cannabis industry is still in its infancy on Wall Street. Even the so-called experts rely more on hunches and guessing to forecast the fundamentals. So perhaps until there is enough history to establish tangible expectations, I greatly rely on the technicals to guide me. Charts don't lie and they outline the trends and important levels.However, relying on charts doesn't mean I completely dismiss the importance of the company metrics. Perhaps the most important one that TLRY reported last night was that it sold 2,053 kilos, which is three times that of last year. This combined with a 110% increase in revenues for the same period, which tells me that the company is executing well on its growth plans.TLRY's Chief Executive Officer Brendan Kennedy explained away the margin pressures by highlighting the expansion of its facilities. The company added seven new facilities, so the ramp-up time will keep profitability at odds until the revenues catch up to the expenses. Overspending is the necessary evil that growth companies have to endure.Meanwhile, they maintain a relatively healthy balance sheet with $500 million in cash. This will ensure that they are able to pursue their next focus areas in the U.S. and Europe. This is not only by targeting the recreational legalization trends, but this also includes making the CBD and medical applications. Bottom Line on Tilray StockIn short, the company is succeeding in its mission, so Tilray stock should have more upside potential in the long run. Those who want to bet on its success for years to come need not worry about the minutia of action here. Moreover, they are not going at it alone. Management struck a partnership with Anheuser-Busch InBev (NYSE:BUD), which validates TLRY's efforts in my opinion. If it's good enough for a massive company like BUD, then it's good enough for the general investor.Meanwhile, for those who prefer to trade the stock short term instead, the technicals can definitely provide a road map.Year-to-date, TLRY stock came into the earnings event only up 2.4% compared to the S&P 500's 12% for the same period. Clearly, the stock is stuck below $80 per share since December. Even worse is how TLRY compares to Canopy Growth (NYSE:CGC), Cronos (NASDAQ:CRON) and Aurora Cannabis (NYSE:ACB), which are up 70%, 108% and 100%, respectively, for the same period. * 7 Financial Stocks to Invest In Today The overnight bounce in Tilray stock brought it into potential resistance. The area around $76 to $78 per share has been pivotal for months. This usually creates resistance as both bulls and bears want to win the battle there. In January, the TLRY bulls were able to over come it, but only for a few days. Unlike the stock market in general, TLRY has failed to recover the ledges from which they crashed into the Christmas correction.Specifically, $77.50 is my area of interest. If they close TLRY above it and successfully retest it for footing, I'd consider it an opportunity to trade the upside potential to recover the January highs. But even then, there are areas of resistance here and at $82 per share. So I would need to see a clear breach of the first line of resistance before I chase it long.As for support, the bears could get more of an upper hand if they can break through $70 per share. Oddly enough, Tilray stock retested its December lows just a few days ago. This is happening while the S&P 500 is still on a tear. The wound is still fresh. Below it, there is a trap door to the mid-fifties. This is not a forecast, but merely one of the available scenarios at hand.It is best to wait for the break out from the zones noted before chasing either the upside or the downside potentials.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Financial Stocks to Invest In Today * 7 Single-Digit P/E Stocks With Massive Upside * 5 Chip Stocks on the Rise Compare Brokers The post Why Tilray Stock Is Still Worth a Look Despite Earnings Flop appeared first on InvestorPlace.
Over the past few years, few companies have been as active in the cannabis space with respect to merger and acquisition activity as Aurora Cannabis (ACB) has been. A review of their strategic acquisitions and partnership is key to assessing value both at the current share price and in the future. Based on their most their most recent Q2 filings as of December 31, 2018 their investment related assets are as follows:Marketable Securities: $116.7M Investments in associates and joint ventures: $ $131.9M Derivatives & convertible debentures: $69.4M Short-term investments: $1.2MIn addition to the above, approximately $3 billion of goodwill has been recorded.One of the more interesting holdings of ACB investment portfolio and how it will impact the execution of its retail strategy is Choom Holdings (CHOOF). There has been some notable activity in Choom’s retail location rollout as of late which warrants a review of ACB’s investment and how it impacts the company in the future. In June 2018, ACB completed two transaction relating to CHOO. They initially acquired approximately 8% of Choom for $0.71 per share. They followed up this investment shortly after and acquired $20M worth of convertible debentures at $1.25 per share of in a private placement (maturing in four years). This also included an option to purchase 40% of the company at $2.75 per share which expire on November 2, 2020. As at March 15, 2019, the share price of CHOO close at $0.69 per share meaning their initial investment is essentially unchanged and their warrants are still fairly deep out of the money.From a strategic perspective, Choom’s 17 initial retail licenses throughout Alberta and their ability to grow in western Canada, appeared to be the initial focus of the transactions from ACB’s standpoint. Choom has been busy of late and it seems that they are executing their growth strategy to the liking of ACB’s initial vision. ACB CEO Terry Booth specifically noted “Choom has demonstrated a strong commitment to rapidly executing its strategic growth plans by developing a sophisticated retail channel across Western Canada while diversifying their operations through further expansion into Ontario.” Last month Choom entered into a LOI with an Ontario Cannabis retail store applicant which would provide a strategic diversification away from their primarily Western Canada presence. In a more complementary transaction to their core geographic business, on February 27, 2019, Choom entered into an agreement to acquire Clarity Cannabis which operates in Alberta. This purchase adds an additional 30 locations to the ACB/Choom portfolio.At this point in time, this investment seems to have complemented ACB’s investment portfolio well at a relatively smaller price then some of its other investment/partnership transactions. Choom has expanded their national footprint and their share price has recovered back to near the original investment of $0.71 per share. The real unknown is if the convertible debentures will provide a satisfactory return to ACB. If Choom continues to execute and the market rewards its share price, the opportunity for ACB to control own 40% of the company long-term could be very rewarding in its quest to scale buildouts and achieve organic growth.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. More recent articles from Smarter Analyst: * Will New Streaming Service Propel Apple (AAPL) Stock to New Heights? * Analyst Commends Cannabis Stock Aurora (ACB) for Peltz Pick * This Cannabis Stock Just Got a Huge Vote of Confidence * Apple's (AAPL) Streaming Video Buzz: Should You Buy the Hype?
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