|Bid||0.00 x 21500|
|Ask||0.00 x 42300|
|Day's Range||8.57 - 8.77|
|52 Week Range||4.05 - 12.52|
|Beta (3Y Monthly)||2.62|
|PE Ratio (TTM)||39.86|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
In early April I wrote about going long Canopy Growth (NYSE:CGC) stock. That trade paid off quickly but after peaking at $52.50 per share CGC stock gave it back and has reverted to support. While this sounds disappointing it is where the opportunity lies today.Source: Shutterstock It is time to reload almost exactly the same CGC trade as before. I consider this a blend of tactical trade with the potential to making it a long-term investment. It all depends on the investor time frame. The difference will be how to manage the trade if price goes against it. But in either case the start is the same. But First, Canopy Growth FundamentalsThe whole cannabis stock sector is speculative at best. Companies like Canopy Growth are trying to establish a legitimate business on Wall Street for the first time ever. This is not an easy feat and they are facing hurdles.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe regulatory obstacles are also opportunities which eventually will be incremental upside. There is no doubt that the bullish thesis for pot stocks is strong. * 5 Great Tech ETFs That Aren't the XLK Bottom line, the popularity of pot is what drives the fanatical interest in these stocks.This is not a fad. The interest is too strong to fizzle. Also there is too much action from mega-cap companies who are seeking to join the party if not already there. CGC was ground zero for this when it took $4.5 billion from Constellation Brands (NYSE:STZ). More investments followed like the one into Cronos (NASDAQ:CRON) from Altria (NYSE:MO).Also the cannabis story is not local. This is a global phenomena but the markets here in North America are probably the sexiest to investors. Simply stated, the story is too good to dismiss so soon.CGC stock is not for the faint of heart. They are called momentum stocks because they move fast in both directions. Case in point, yesterday it rose 4% on no specific news. So this makes it difficult to find the perfect trading points. So it is best to learn the levels that matter and use those as entry and exit lines. Trading CGC StockOnce CGC fell back into the $43 zone it slowed its deceleration because that is a support zone. These are not hard lines in the sand but rather rubber bands. I can buy it here and expect a bounce towards the last place it failed.If will face resistance at $49 per share so I should lock profits once it reaches it. But this varies based on individual trading preferences and time frames. If it's a tactical trade then I'd set my stop loss below $41.75 or $39.75 per share. Because if those fail, the bears could try to retest $33 per share. This is not a forecast but a scenario that could unfold.The CGC stock fundamentals are the best of the bunch on paper. This is not to say that they are good. But they did receive the pile of cash from STZ and they are putting it to good use. Their strong balance sheets allows them to execute on plan comfortably. But they still need to grow their delivery capacity.This is what Wall Street believes, and whether reality or not, perception is all that counts this early in the process.Critics of cannabis do make valid arguments. But for every point of contention they offer, there are several other facets of the cannabis that offset that one negative. The applications for cannabis includes not just recreational use, but also medical, CBD, potables, edibles, etc.So according to Wall Street we will smoke it, eat it, drink and rub it on our ailments. So to be a bear on cannabis now is like fighting a multi-headed beast. They can shoot down one aspect of the bullish thesis but there are several more that can still bite the sellers.Nevertheless, it is important to temper the enthusiasm. Canopy Growth fundamentals from the traditional point of view are scary. And it is not alone as the whole sector carries very rich valuation with minimal opposing income. CGC has a market cap of $15 billion and only has a small fraction of it in sales.So yes, they are expensive but the story is not in today's dollar but rather several years out. The legalization trend is just starting. As more states follow the early movers, the North America consumption markets will grow exponentially.Canopy is set to be able to cater to the incremental demand. They are literally forging the trail for the others to follow. Recently we saw them execute an inventive way of acquiring resources without breaking any laws. This is a team that is not afraid to make bold moves and take calculated risks. * 7 Safe Stocks to Buy for Anxious Investors If cannabis stocks are a viable thesis long term, then Canopy Growth is a winner. So far, CGC and ACB are up more than 65% year to date -- four times the performance of the S&P 500.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 * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Safe Stocks to Buy for Anxious Investors * 4 Tech Stocks Looking Vulnerable * Should You Buy, Sell, Or Hold These 7 Hot IPO Stocks? Compare Brokers The post It's Time to Load Up on CGC Stock Again appeared first on InvestorPlace.
A slight earnings whiff is no match for budding trends off and on the price chart in Aurora Cannabis (NYSE:ACB). But bullish investors should wait for a bit more green to appear on the weekly view of ACB stock before buying. Let me explain.Source: Shutterstock It's not difficult to grow uneasy when one of the marijuana stocks misses Street forecasts and issues a wider-than-expected loss. But in the case of ACB stock, it also fails to appreciate the big picture -- one which looks very promising for Aurora investors.Bottom line, a near-term a loss of 16 cents versus views calling for red ink of 5 cents looks bad superficially. But, it would be a mistake to discount the cannabis market's secular growth potential and the positive impact on Aurora's earnings over time. In fact, it could be a huge mistake to write off ACB stock based simply on earnings, if history is any indicator.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMany of today's leaders in their respective markets such as Netflix (NASDAQ:NFLX) or Amazon (NASDAQ:AMZN) took massive losses during their early growth phases. That let them position strategically for the long-term. Further, with a good chunk of Aurora's quarterly loss tied to convertible debt, which we might assume has been issued for the goal of growth and capturing market share, optimistically, the pay-off will be worth it.In the meantime, there are also other bullish factors already in play for Aurora Cannabis stock. * 7 Safe Stocks to Buy for Anxious Investors For one, ACB's stronger-than-expected third-quarter sales growth during a rather weak operating environment for Canadian cannabis outfits was nothing short of a solid win. As InvestorPlace's Luke Lango also notes, ACB stock's relative discount in valuation make Aurora ripe for investment similar to Canopy Growth (NYSE:CGC) or Cronos (NASDAQ:CRON) and bodes well for higher prices.And if the price chart in ACB stock has any say in those matters, those days of waiting may be numbered. ACB Stock Weekly Chart After moving more or less in lockstep with the broader market from last fall's high through its corrective bottom, shares of ACB stock have negatively diverged. But the relative weakness could work to bullish investors' advantage in the very near future.The divergent price action over the past couple months has produced a period of technical consolidation centered on Aurora's 50% retracement level. The overall constructive behavior is easy enough to appreciate. Also, with the pattern effectively neutralizing some modest, but frothy, optimism earlier in 2019, a reassertion of ACB stock's uptrend is anticipated.The suggested strategy to buy Aurora Cannabis is to wait for last week's engulfing pattern to signal that a low is in place. This means investors should only buy shares above $9.05 as the weekly candlestick's high is breached.For money management I'd recommend peeling off some ACB stock position risk at the prior highs near $12.50. I'd also use the May pattern low as an initial stop-loss. The combination allows for nice profit potential in relation to risk, while keeping one's exposure contained to acceptable levels.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 * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Safe Stocks to Buy for Anxious Investors * 4 Tech Stocks Looking Vulnerable * Should You Buy, Sell, Or Hold These 7 Hot IPO Stocks? Compare Brokers The post Aurora Cannabis: Hereas How to Buy ACB Stock appeared first on InvestorPlace.
Here's how the most popular pot stock in the world tallied over 65 million Canadian dollars in net third-quarter sales.
Aurora Cannabis Inc. shares rose Tuesday, after the Canadian company said it has entered a multiyear, multimillion-dollar agreement with mixed martial arts organization UFC to research the effect of hemp-derived CBD products on athlete recovery and wellness.
Aurora Cannabis Inc. (NYSE:ACB) had an extremely productive fiscal third quarter. Metrics looked very positive across the board: solid revenue growth; active registered patients up; cash cost to produce per gram down; production volume increased materially.Source: Shutterstock Everything is heading in the right direction.ACB has even announced that famed activist investor, Nelson Peltz, joined the company as a strategic adviser. Although activists typically made headlines by giving company management a hard time, he is with Aurora in a collaborative capacity to help with their global expansion and partnership opportunities. This is a big win for ACB stock as Peltz's network and business perspective will prove very useful, especially on the expansion front.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Confidence in OutlookACB delivered solid Q3 revenue growth that averaged 20% in all key markets. Canadian consumer was up 37%, Canadian medical was up 8%, and international medical was up 40%. Aurora has expertly scaled production managed it sales channels. * 6 Chinese Stocks That Could Pop On a Trade Deal It may not be the dizzying revenue growth of Tilray (NASDAQ:TLRY), which increased 195% year-over-year, but ACB had solid and sustainable stats that can be replicated for many quarters out.On the cost side, since ACB has been very focused on getting its facilities to run at full capacity, they have been able to lower cash costs per gram. In the most recent quarter, Aurora cut costs to $1.42, 26% lower that the prior quarter, and an improvement year-over-over of 7% as well.Now with the Aurora Sky growing facility operating at full capacity, those costs should keep trending down. Management expects that the average cash cost to produce per gram at its Sky Class facilities will be below $1. This will help get them to their EBITDA positive goal. What This Means for ACB Stock What this all means is that ACB stock is on track to delivery positive EBITDA in Q4 2019. This, of course, is if all goes as planned. The company continues to execute in all channels and improve pricing and volumes in parallel. If this happens, there could be a bit move upward in the stock.And for a space that has seen soaring valuations, ACB actually turns out to be favorably valued for investors looking to buy. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Using the market cap per kilograms sold as a valuation metric, ACB stock also looks much cheaper than other cannabis companies. Based on quarterly metrics, ACB is valued at $969,000 per kilo sold. Marijuana stocks like Canopy Growth (NYSE:CGC) and Tilray are both selling for around $1.5 million per kilo sold.So, from this valuation perspective, at current levels Aurora looks much more attractive than its peers. What's Ahead for ACB StockIn addition to being on track to deliver positive EBITDA in Q4, Aurora is also on track to increase sales meaningfully with production facilities targeting over 25,000 kg of cannabis available for sale. With production ramping, this allows management the flexibility to craft its new product line. Vapes and edibles will be ready to launch in Canada by calendar year-end.Across the pond in Europe, once Aurora's receive production facilities receive EU GMP certification, supply to international markets will get a big boost. The company's Bradford facility recently underwent an audit in an effort to get that EU certification.With Aurora Cannabis Inc. executing at a rapid pace and with the results to show for its efforts, ACB is a compelling buy as one of the best cannabis stocks.As of this writing, Luce Emerson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Aurora Cannabis Stock Is Attractively Valued After A Huge Q3 appeared first on InvestorPlace.
Marijuana stocks rallied as Aurora Cannabis inked a research deal on athlete wellness with the UFC. Pot REIT Innovative Industrial Properties also bought 2 properties.
is stepping into the octagon with mixed martial arts federation Ultimate Fighting Championship to partner on a "multi-year, multi-million dollar, global partnership" that will look to better understand the relationship between CBD products and athlete wellness and recovery. The research will be conducted at the UFC's Performance Institute in Las Vegas, where more than 400 athletes over the past two years have been studied. "Since the day we opened the Performance Institute, our primary goal was to offer UFC athletes the best possible training, nutrition, and recovery services," said UFC President Dana White.
At least in the current, early stages of the legal marijuana sector, Canopy Growth (NYSE:CGC) is the clear leader. Canopy Growth stock has by far the highest market capitalization among marijuana stocks, and Canopy has the largest peak production capabilities.As a result, the CGC stock price is somewhat of a weather vane for investor sentiment towards the cannabis sector more broadly.That's good news, and bad news, for CGC stock. On the plus side, CGC is simple. The company's reach is broad and continues to grow. However the industry's growth plays out, Canopy Growth is going to play a significant role in it and generate significant profits. If the marijuana sector exceeds investors' expectations, the CGC stock price likely will do the same.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe flip side is that it's unlikely that Canopy Growth stock will be the best marijuana stock over time. Smaller niche plays might have more room for growth and are more likely to become M&A targets. Canopy's wide reach guarantees at least a few wins, but some of its myriad initiatives will fail to bear fruit (or, more accurately in this case, flowers). * 7 Stocks to Buy for Over 20% Upside Potential Overall, the outlook of CGC stock is pretty simple. If an investor believes in cannabis, CGC stock remains the simplest play, as I've argued in the past. But with the CGC stock price still not too far from its highs, it's worth remembering that an awful lot of belief, and potential success, looks priced into Canopy Growth stock. Canopy Growth Expands Its ReachThe $4 billion-plus investment Canopy Growth received from Constellation Brands (NYSE:STZ,NYSE:STZ.B) gave the company an unparalleled war chest. Only Cronos Group (NASDAQ:CRON), which received $1.8 billion from tobacco giant Altria (NYSE:MO), comes close.Canopy is putting that cash to work. It negotiated a complicated deal with Acreage Holdings (OTCMKTS:ACRGF) to enter the U.S. market, including a $300 million upfront payment. (An activist Acreage shareholder could scuttle that purchase, however.) CGC is adding production capability. Canopy brought a German cannabinoid compounder into the fold earlier this month. Its smaller deals include a buyout of a U.S. hemp manufacturer and a stake in a '"cannabis beauty brand."Those acquisitions add to the company's already-strong portfolio. Canopy Growth sells marijuana under six different brands. Its existing production capabilities appear to exceed 500,000 kilograms annually. Canopy produces oil and softgels in addition to dried flower. The Constellation partnership should give the company an edge in cannabis-infused beverages and edibles.Canopy already has a reach that far exceeds that of any other cannabis company. Aurora Cannabis (NYSE:ACB) is probably its closest rival in terms of breadth of geographic and market exposure. But even Aurora doesn't reach Canopy's levels, and ACB doesn't have an extra few billion dollars on its balance sheet that it can use to take advantage of more opportunities along the way. CGC or an ETF?At this point in the market's evolution, one key argument for Canopy Growth stock is that it can function like an ETF. The point of an ETF is to capitalize on a trend without making the effort or taking the risk that investing in single stocks requires. There are, by one count, over 400 marijuana stocks at the moment. As is usually the case with a "hot" trend, many of those stocks will decline or go bust. (Think, for instance, of the dot-com bubble, or more recently, cryptocurrency/blockchain plays.)In fact, I'd rather own CGC stock than the largest marijuana ETF, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ). Two marijuana pharmaceutical plays, GW Pharmaceuticals (NASDAQ:GWPH) and Corbus Pharmaceuticals (NASDAQ:CRBP), together make up more than 12% of Canopy's assets. And, again, Canopy's reach means it should have at least some success, no matter how the marijuana industry develops.If oversupply makes production less profitable, CGC's distribution and retail operations should benefit. If consumption moves towards edibles and away from flowers, it should be well-positioned for that shift. That's not the case for many smaller plays, including those that make up the MJ ETF. The Risks Facing CGC StockThere's one obvious catch for Canopy Growth stock, however. Even if Canopy can capture marijuana growth in myriad ways, that growth needs to support the current CGC stock price. And I've become increasingly cautious about that recently.At its December lows, CGC was available for less than the price that Constellation paid. (Constellation handed over roughly $35 per share, depending on how warrants Constellation received as part of the deal are valued). But now that CGC stock price has reached the mid-40s, that's no longer the case. As the Acreage activist noted, CGC trades at a stunning 178 times its estimated 2020 EBITDA.That multiple isn't out of line for the sector, but that's precisely the point. Current valuations in the industry, including that of Canopy Growth stock, suggest that massive industry growth is all but a foregone conclusion. And I'm skeptical about whether it will play out quite that way.For instance, recreational sales in Canada already are starting to flatten out., so the explosive rallies of marijuana stocks are going to end. Marijuana prices have plunged in the few regulated U.S. markets. And legalization, given the size of the existing black market (and the relative ease of using it for most consumers), won't necessarily lead to higher sales.Those trends suggest that the initial optimism toward marijuana, and the enormous valuations assigned to marijuana stocks, may have gone a bit too far. That, in turn ,suggests that the CGC stock price may have done the same. For marijuana bulls, there's no simpler play than CGC stock. But for CGC stock to rise further, those bulls must be right.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Canopy Growth Stock Has to Overcome an Important Obstacle appeared first on InvestorPlace.
Aurora Cannabis Inc. (NYSE: ACB ) and Ultimate Fighting Championship (UFC) announced an exclusive, multi-year, multi-million dollar partnership. The deal aims to advance clinical research surrounding hemp-derived ...
Shares of Aurora Cannabis Inc. rallied 1.5% in premarket trade Tuesday, after the Canada-based cannabis company announced a "multi-year, multi-million dollar" exclusive partnership with UFC to advance research on the relationship between of hemp-derived cannabidiol (CBD) products and athlete wellness and recovery. The research will be conducted at the mixed martial arts organization's performance institute in Las Vegas, with clinical studies to focus on pain management, inflammation, injury/exercise recovery and mental well being. "This global partnership places focus squarely on the health and well-being of UFC's talented and highly trained athletes," said Aurora Chief Executive Terry Booth. "The Aurora-UFC research partnership creates a global platform to launch targeted educational and awareness campaigns, while creating numerous opportunities to accelerate our global CBD business." Aurora's stock has soared 71.2% year to date through Monday, while the ETFMG Alternative Harvest ETF has climbed 33.3% and the S&P 500 has gained 13.3%.
Multi-Year Global Partnership will Advance Science on Athlete Health and Wellness NYSE: ACB TSX:ACB EDMONTON , May 21, 2019 /PRNewswire/ - Aurora Cannabis Inc. ("Aurora" or the "Company") ...
CALGARY , May 21, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (HITIF) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that Canna Cabana was selected by random algorithmic draw as the Successful Retailer for the community of Niverville during Manitoba's Cannabis Retail Opportunities Draw (the "Draw") held on May 15 , 2019. The opportunity will permit Canna Cabana to be licensed by the Liquor, Gaming and Cannabis Authority of Manitoba to operate a bricks-and-mortar retail store in Niverville as well as e-commerce sales serving the entire province. As the parent company of Canna Cabana, High Tide has confirmed its interest in the Niverville license.
Shares of Tilray (NASDAQ:TLRY) dropped in mid-May after the Canadian cannabis company reported first quarter numbers that didn't quite live up to expectations. Revenues topped estimates, but profits missed estimates. Despite the profit miss, all the growth trends moved in the right direction. Revenues rose big sequentially. So did cannabis sales volumes. Gross margins improved, too. Broadly, the numbers looked good, but Tilray stock still had people disappointed.Source: Shutterstock The big story for the past year is that Tilray has simply been priced for much more than just good. For context, TLRY has always been richly valued relative to peers for no reason outside of market hype. This is the pot stock that went extra parabolic during the mid-2018 cannabis craze. At one point in time, Tilray touched $300. It has since consistently retreated. Now, shares trade hands under $50. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Naturally, the question following earnings is whether or not TLRY stock has finally bottomed. Ostensibly, the answer appears to be yes. The numbers missed expectations, but were pretty good. The stock dropped. But, not by much. The valuation now makes sense relative to peers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, the numbers, the price action, and the valuation all imply that Tilray stock could indeed bottom here just below $50.But, will it? I'm not sure. As such, I think this is a wait-and-see situation. TLRY has been a falling knife for some time. Reversing the course of this falling knife will take some time, too. There's no rush to buy in just yet. Tilray's Numbers Were Pretty GoodDespite the headline profit miss, Tilray's first quarter numbers were actually pretty good, and broadly much better than most observers anticipated.Both revenues and kilograms of cannabis sold rose nearly 50% quarter-over-quarter. Relative to peers Cronos (NASDAQ:CRON) and Aurora (NYSE:ACB) (both of which have reported early 2019 numbers) that near 50% sequential revenue and volume growth rate is very impressive. The growth rates at Cronos were below 20%. Over at Aurora, they were between ~20% and ~40%.To be sure, Tilray is growing from a small base, but the takeaway nonetheless remains clear. Tilray gained share in the cannabis market in early 2019. On top of that market share expansion, gross margins also improved sequentially, so Tilray importantly gained share without sacrificing margins.Overall, then, Tilray's first quarter numbers actually underscore that this company is making material progress in the potentially enormous cannabis space. From that perspective, these numbers could help Tilray bottom here. Tilray Stock Could Bottom Here, but Will It?I've shied away from Tilray stock over the past several months for one reason: valuation. Quite simply, after this stock popped all the way to $300 on hype alone, it needed to do a lot of compressing before it became even somewhat reasonably valued. On top of that, Tilray reported number in late 2018 which implied that it was growing more slowly than peers, only adding to the stock's valuation concerns.But, as stated earlier, Tilray is now growing more quickly than many of its peers. Further, the valuation is now more reasonable, as each kilogram of cannabis produced at Tilray last quarter is being valued at roughly $1.5 million, which is in-line with the valuation for Canopy (NYSE:CGC).As such, there's reason to believe that TLRY stock could bottom here. The numbers are reversing course, and the stock is finally trading at arguably reasonable valuation levels.But, while there's reason to a believe a bottom is in, I'm not convinced. CGC and TLRY now feature similar valuations. But, Canopy has a $4 billion investment on its balance sheet from Constellation Brands (NYSE:STZ). Tilray has no such investment. They have a few partnerships, but no big money investment.Thus, one should ask: does TLRY deserve a CGC-like valuation? I don't think so. But, let's see what the market says. Bottom Line on Tilray StockIt has been a long fall from $300 for TLRY stock. Certain indicators suggest that this fall could be over. But, I'm not convinced. As such, I think this is a wait-and-see situation with Tilray.As of this writing, Luke Lango was long CGC and ACB. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Even at These Prices, Tilray Stock Still Has Too Much Success Priced In appeared first on InvestorPlace.
Based on its peers' results, Canopy Growth could be in for a pretty good quarter.
Aurora Canncbabis (NYSE:ACB) stock traded higher in mid-May after the Canadian cannabis giant reported third-quarter numbers that, while short of expectations, broadly confirmed that ACB is benefiting from favorable underlying trends. Investors cheered the favorable results, and ACB stock traded slightly higher in response to the report.Context is important in this case. Many expected Aurora's third-quarter numbers to be pretty bad. There was an overwhelming amount of data which suggested that the Canadian cannabis market had flat-lined in the early parts of 2019. Consequently, expectations were low heading into the print. * 7 High-Yield REITs to Buy (Even When the Market Tanks) But Aurora didn't report bad third-quarter numbers. Instead, Aurora reported pretty good third -quarter results. Across the board, everything from revenues to volumes to margins improved sequentially, implying that while the Canadian cannabis market may have flat-lined in early 2019, Aurora did not.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's bullish for ACB stock. For a long time, Aurora stock has been the most undervalued big name Canadian pot stock. Two things have held it back. Specifically, concerns that its current leadership position in the Canadian cannabis market is slipping and the fact that the company doesn't have a big-time investment from a consumer-staples giant.The first of those concerns was addressed by the company's strong third-quarter numbers. The second concern should be addressed later this year. As a result, now seems like a good time to get bullish on ACB stock, since the relative valuation discount of Aurora Cannabis stock won't last forever. Aurora Reported Strong NumbersFrom head to toe, Aurora's third-quarter earnings report was pretty good. Despite the headline misses, every single metric rapidly moved in the right direction for Aurora. This confirms that Aurora is not only a leader in the Canadian cannabis market, but also that it's widening its lead.Its total revenues rose 21% sequentially, as its revenue from consumers surged 37% quarter-over-quarter and its medical revenue increased 8%. Meanwhile, the number of kilograms of cannabis that it produced rose nearly 100% quarter-over-quarter, while the number of kilograms it sold rose over 40%. Production cost per gram of cannabis dropped more than 25% quarter-over-quarter, and its gross margins rose four points sequentially.Across the board, Aurora's operations improved from late 2018 to early 2019. In the wake of murmurs that the Canadian cannabis market was flat during that stretch and the muted growth numbers Cronos (NASDAQ:CRON) reported not too long ago, it's clear that Aurora is accelerating its leadership position in the Canadian cannabis market.This acceleration of leadership, coupled with the large investment that the company should receive soon, pave the path for ACB stock to head way higher in 2019. Aurora Stock Can Rise MeaningfullyThe relative undervaluation of ACB stock, which won't last too long, creates a compelling opportunity for investors in 2019.The market currently values each kilogram of cannabis that Tilray (NASDAQ:TLRY) and Canopy (NYSE:CGC) sold last quarter at about $1.5 million. The market simultaneously values each kilogram of cannabis that Cronos sold last quarter at more than $4.5 million. But when it comes to Aurora, the market thinks each kilogram of cannabis sold last quarter is worth less than $1 million.The disparity has nothing to do with growth. Aurora's revenues, production capacity, and sales volumes are growing as quickly as anyone else's in the industry. It has nothing to do with size, either, as Aurora is the second-biggest player in the market behind Canopy. Nor does it have anything to do with profitability, as Aurora has one of the highest gross margins in the sector.Instead, it has everything to do with two things. First, investors question the longevity and sustainability of Aurora's current leadership position. Second, investors question how Aurora can compete with companies that have received billion-dollar investments from consumer-staples giants.The first concern was addressed by ACB's strong third-quarter numbers. The second concern will be addressed later this year. Aurora didn't receive a large investment like Canopy or Cronos, yet But, considering this company continues to expand its production footprint and leadership position, and that ACB stock trades at a huge discount to its peers, it's only a matter of time before some big consumer-staples giant steps in and pours in a few billion dollars.Once that happens, there will be no reason for ACB stock to trade at a lower valuation than other major marijuana stocks. The discrepancy will go away, and as it does, Aurora Cannabis stock will fly higher. The Bottom Line on ACB StockAurora's third-quarter numbers were actually much better than most expected, and imply that Aurora is extending its leadership position in the Canadian cannabis market. The longer its position in the market improves, the higher the odds that the company will receive a huge investment from a consumer-staples giant. The higher those odds go, the higher ACB stock will go.As of this writing, Luke Lango was long ACB and CGC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Why Strong Q3 Numbers Make Aurora Stock Worth Buying appeared first on InvestorPlace.
Canadian pot stock Aurora Cannabis (ACB) reported its fiscal third-quarter earnings last week, showing weaker than expected sales, and a greater than expected EBITDA loss for the quarter. Aurora booked $65.1 million in sales during the quarter, and incurred an "adjusted EBITDA" loss of $36.6 million. The company did not even bother reporting the size of its net loss for the quarter as calculated under GAAP -- so you know it had to be pretty bad.The good news is that, once analysts got through opining on the quarter, investors were ready to chalk it up as a win. (And Aurora Cannabis closed trading Thursday up 2.4%).Seaport Global's report is instructive. Calling Aurora's quarter a "slight sales miss (actually, Aurora missed Seaport's sales estimate of $71.3 million by nearly 9%), Seaport analyst Brett Hundley urged investors to focus more on Aurora's progress in bringing down production costs, and the potential for the company to sell higher-margin products so as to become able to earn better profits in the future. Hundley reiterated a Neutral rating on ACB stock without suggesting a price target. (To watch Hundley's track record, click here)Aurora doubled its production of cannabis from Q2 to Q3, gaining scale of production, and predicted it will produce as much as 25,000 kilograms of marijuana in Q4, currently underway. As production ramps up and production efficiencies kick in, this should help to grow gross margin (which came in at 55% in Q3 -- four points below consensus).Also helping to grow the gross will be new, higher-margin marijuana products. "Vapes" (cannabis oil that can be heated and inhaled in an e-cigarette-like vaporizer) and "gummies" (i.e. edible marijuana) are two products Hundley especially has his eyes on, noting that such "cannabis derivative products are expected to be available for sale in Canada" by October 2019. Not only does Aurora view these products as higher margin than plain marijuana "flower" (for smoking). The company also believes there's a bigger market opportunity here than in cannabis-infused beverages, for example -- which the analyst notes currently comprises "~2% or less of market share" in the U.S.Not that Aurora is ignoring the smokables market, though -- it's just looking to extract extra margins there when possible. In particular, Hundley likes the company's acquisition of "organic cannabis" producer Whistler, and its stake in The Green Organic Dutchman.Notwithstanding Hundley's optimism that all of the above will help perk up Aurora Cannabis's profit margins going forward, for the time being, the analyst left his estimates for future sales and earning unchanged. As of today, Hundley is still projecting Aurora will end 2019 with sales of $268.3 million, roughly triple that to $833.9 million in 2020, then grow it another 50% to $1.25 billion in 2021. Earnings-wise ... well, there still doesn't seem to be much hope we'll see GAAP profits anywhere in the near future. That being said, the analyst is still hoping to see Aurora turn "adjusted EBITDA" profitable next year (after losing $199 million in negative adjusted EBITDA this year).That still doesn't give investors much to hang a valuation on, unless you're satisfied using price-to-sales ratios. With an unprofitable company like Aurora Cannabis, it seems you may have to be satisfied with that for some time to come.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on ACB: * BMO Cautious on Aurora Stock as Profitability Remains a Challenge * Aurora Stock Is at the Mercy of Investors * Aurora Cannabis (ACB) Stock Is Still a Buy, Says Analyst More recent articles from Smarter Analyst: * A Look at Qualcomm (QCOM)-FTC Outcome and Its Impact on Apple (AAPL) * It's Time to Cut Estimates for Tesla (TSLA); Stock Remains a Long-Term Opportunity * Will Qualcomm (QCOM) Stock Price Get Back to $60-65? Not So Sure * Putting General Electric Management Under the Microscope Is Bad News for GE Stock
As the presidential race continues to heat up, Democratic contender and former Vice President Joe Biden has come out in support of decriminalizing cannabis — but not of full legalization. “Nobody should be in jail for smoking marijuana,” he said. A myriad of cannabis-related bills were submitted in the House of Representatives, most of them aimed at protecting certain groups using medical marijuana, from military veterans to students.
As recreational marijuana moves beyond buds and countries besides Canada mull legalization, cannabis companies have a lot of potential roads to travel as they seek to grow.