|Bid||8.18 x 0|
|Ask||8.19 x 0|
|Day's Range||7.87 - 8.26|
|52 Week Range||4.76 - 20.96|
|Beta (3Y Monthly)||3.70|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||14.94|
[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.]Unfortunately technical analysis has a bad reputation. However, it is probably well deserved. Most of the technical analysis of marijuana stocks that I see is dubious at best and downright terrible at worst. Many analysts mindlessly try to identify patterns without really understanding what they are supposed to mean. Some analysts are even proponents of bizarre techniques like Gann Theory and Elliot Waves. My belief is that these methods are better suited for a Twilight Zone episode than for making money in real markets.In financial markets, there are certain price levels that are more important than others with regards to the amount of supply and demand that exists at them. In addition, stock prices are always doing one of three things. They are either going up, going down or staying the same. You can see this by looking at almost any chart. If you understand technical analysis and apply it correctly, you can identify these important levels and trends.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 8 Dividend Stocks to Buy for a Recession Knowing where these levels are will help you profit. For example, suppose you want to buy a stock if it gets down to $5 a share and then sell it if it rallies to $10. If there is support around the $5.50 level, the stock could fall to $5.50 and then rally to $10. Because you didn't know where the support was, you would have missed out on a significant profit for 50 cents. Marijuana Stocks With Levels to Watch: Aphria (APHA)Aphria (NYSE:APHA) manufactures and sells medical cannabis in Canada and internationally. It currently has a market cap of about $1.5 billion.APHA stock has looked rough recently, down more than 7% in the past week. This is probably sympathy pain due to Aurora Cannabis (NYSE:ACB) being downgraded at Stifel from "hold" to "sell."If it continues to head lower, there will probably be some support around the $6 level. This is where the two most recent lows were on Aug. 15 and Aug. 27.If it gets oversold it may have a tradable rally off of the level. The key is to not try to catch the bottom. Bottoms are typically more volatile than tops. This is because tops are created by hope while bottoms are created by fear.A better strategy could be to wait until the downtrend is broken before buying it. In other words, buy it after it starts to rally. You won't get the low trade, but the risk-reward ratio is better than trying to guess where the exact bottom is. Hexo (HEXO)Hexo (NYSE:HEXO) produces, markets and sells cannabis. The current market cap is about $985 million.When a stock is rallying, the forces of demand are in control. When a stock is selling off, the forces of supply are in control. A reversal pattern shows a change of this leadership.From Aug. 28 through Sept. 6, buyers controlled the market. The stock rallied every day. Then the action on Sept. 9 formed a reversal pattern. It has dropped by about 10% since then.The up days are blue and the down days are red on the chart. On Sept. 9, the stock opened at the day's high. The buyers were in control that morning. * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars Then the stock sold off over the course of the day and closed at the lows. This action means that the forces of demand have run out of steam and the forces of supply have taken over. These dynamics are what forms a reversal pattern on the chart. Cronos (CRON)Cronos (NASDAQ:CRON) grows and sells marijuana. Its current market cap is $3.8 billion.CRON stock continues to trend sideways above support around the $10.75 level. It has been trading in the same range for about one month. If the support at the $10.75 level breaks, it will probably become a resistance level.How does this happen? Why would a level that was support become resistance? Consider the following.The investors who bought a stock at a support level are feeling good when it bounces and they are making money. But then when the level breaks and the stock goes lower, they are now looking at a loss. They tell themselves that if the stock rallies back up to that level, they will sell it so that they can get out of it without losing any money. They place their sell orders at the level, and this supply of stock is what creates resistance. The Green Organic Dutchman (TGODF)The Green Organic Dutchman (OTCMKTS:TGODF) engages in the provision of medical cannabis solutions. It currently has a market cap of around $500 million.Aurora Cannabis was a large holder of TGODF stock. It recently announced that it sold its position of 28.8 million shares to a consortium of Canadian Banks. This caused TGODF to drop by about 10%.There is a chance that the consortium, or at least members of it, have been selling the shares they acquired in the block transaction. This could be what is forcing the stock lower. If this is the case, then when this selling comes to an end, there is a good chance that we will see a meaningful rebound. * 7 Momentum Stocks to Buy On the Dip TGODF is also oversold. The last time that it was this oversold, in July, a large rally followed. The term "oversold" refers to momentum. It is a measurement of where the stock is today versus where it was X many days ago. When this number reaches an extreme to the downside it is considered to be oversold. Aurora Cannabis (ACB)Aurora is a Canadian-based company that grows and sells medical cannabis products. It currently has a market capitalization of about $5.4 billion.ACB stock has been crushed over the past week. It has dropped from $6.50 to $5.30. Last week the company reported a loss for the fourth-quarter that was larger than expected and revenue that was short of estimates. Because of this, Stifel Nicholas downgraded the stock from "hold" to "sell."When the stock dropped, it found support around $5.50. This was expected because it is where the recent lows were. The next morning, the level broke and the stock traded lower. The $5.50 level may become a resistance level now.If it continues to trade lower, it may find support around the $5 level. This is because this level was where the lows were in December. It is also an important level psychologically. If ACB is oversold when it reaches that level, there is a good chance that it will be a low-risk buying opportunity. Medicine Man Technologies (MDCL)Medicine Man Technologies (OTCMKTS:MDCL) provides cultivation consulting services to cannabis growers. The current market cap is about $133 million.MDCL stock seems to be failing at resistance after becoming overbought.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.Like oversold, overbought refers to the momentum of the stock. When this number reaches an extreme to the upside, it is considered to be overbought. * 7 Tech Stocks You Should Avoid Now This is an important dynamic to understand about markets. When they are oversold and get to support, they tend to rebound. When markets are overbought and get to resistance they tend to sell off, as is the case here. Kushco Holdings (KSHB)Kushco Holdings (OTCMKTS:KSHB) sells packaging products and solutions. It currently has a market cap of about $270 million.On Sept. 11, the company reconfirmed its guidance and discussed what it believes are positive developments. Apparently shareholders were not impressed. The stock has been in a free-fall since then.I do not know when (or if) the selloff will come to an end. A clue that may signal that this is about to happen could be extremely large volume. This would be a sign of capitulation and would be a short-term bullish dynamic for the stock.Capitulation means that the sellers are sick of the misery the stock is causing and they just want to get out. They tell their brokers to sell it and they don't even care about the price. They want it to go away. This usually results in very-large-volume trading. This could be a short-term bullish dynamic.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 * 8 Dividend Stocks to Buy for a Recession * 10 Companies Making Their CEOs Rich * The 7 Best S&P 500 Stocks of 2019 So Far The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
Anyone who's been halfway paying attention to the action in cannabis stocks knows it hasn't been an easy ride. From the most well-known names to the most obscure, it's been a volatile and difficult ride. Aphria (NYSE:APHA) is no exception, with Aphria stock down big from its highs.Source: Shutterstock Shares have fallen roughly 40% from the February highs and almost 60% from its 52-week highs. To say that it's been a rough ride is putting it lightly and these two performance marks emphasizes as much.Earlier this week, we highlighted a silver lining in Aurora Cannabis (NYSE:ACB). After the company reported earnings, shares took a tumble. But so far at least, the stock has avoided a lower low. That's the positive take despite the revenue miss and bearish reaction in the stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, APHA stock has its own silver lining: the stock is actually trending higher. Aphria Stock Is Stronger Than It SeemsComing into August, Aphria stock had been dragging hard. Shares were down almost 50% in just a few months and sentiment couldn't have been worse. Then better-than-expected earnings propelled shares higher, as the stock ran from a low of $5.02 to roughly $7.50 just a day later.The one-day ~50% rally set the tone for APHA, even though shares are now lower at this point. I think the stock is down from its post-earnings high as investors try to work through various resistance points and as they fight the bearish stigma attached to the industry right now. * 7 Tech Stocks You Should Avoid Now There's no reason to mince words about it: Cannabis stocks are out of favor right now. That's not likely to persist forever, which is why it's important to look for stocks showing relative strength. While Aphria stock is not showing strength relative to the market, it is showing strength relative to its peers.Identifying stocks with relative strength is because they're the ones that tend to outperform when the group comes back in favor.Even though shares have been under pressure lately, Aphria stock is still up 16.2% so far in 2019. That's better than Canopy Growth (NYSE:CGC), Aurora Cannabis and Cronos Group (NASDAQ:CRON). CRON, ACB and CGC are all positive on the year too, but lag APHA.The performance is also better than Tilray (NASDAQ:TLRY) and New Age Beverages (NASDAQ:NBEV), which are both down in 2019.Of the group, Aphria stock is the top performer over the last six, three and one month. For the last timeframe, APHA stock is up almost 11%. So this is certainly worth paying attention to. The Exact Breakout Point As you can see on the chart above, we have an ascending triangle formation developing in Aphria stock. That's where uptrend support (blue line) continues to squeeze a stock higher against a static level of resistance. It's a bullish trade development, as investors look for a breakout.In this case, recent resistance has been near $7.20. But that's not the big breakout point, in my view. Instead, I'm looking at the $7.60 level. This level has been notable resistance since the April breakdown. If Aphria stock can clear it, it will also mean that APHA has reclaimed its 200-day moving average.In this case, clearing $7.60 could trigger a big-time breakout. The first upside target is 61.8% retracement at $8.68. Above that and I'm looking for a gap-fill up to $9.85.There is risk, though.If uptrend support fails, it puts the ascending triangle formation at risk of failing. Below it and the 50-day moving average is the first downside target. Below that puts the $5.80 level on watch and below that, the $5 mark is possible. The Bottom Line on APHA StockThe bottom line here is simple: Aphria stock is the most well-behaved stock in the cannabis space showing the most relative strength among its peers. Its stock has a very clear setup on the charts, while its most recent earnings report was good enough to ignite the recent rally.A glance at the balance sheet reveals $422 million in cash and short-term equivalents. That's notable, given the stock's $1.67 billion market cap.Further, current assets of $577 million is more than five times its current liabilities of $102.5 million. Total assets also significantly outweigh total liabilities, total $1.8 billion vs. $524 million. * 7 Momentum Stocks to Buy On the Dip In other words, Aphria is more than capable of covering its short-term obligations as it focuses on growing its business. If there's a speculative cannabis stock worth monitoring right now, it's Aphria in my opinion.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Aphria Stock Is the Most Well-Behaved Pot Stock on the Market appeared first on InvestorPlace.
The markets were flat today as the Fed started its two-day meeting. Cannabis ETFs reported mixed performance, and cannabis stocks traded mostly in the red.
As the cannabidiol (CBD) market takes off, investors look increasingly for the stocks to buy that are driving this market. The industry received a massive boost from the 2018 Farm Bill, which legalized hemp across the United States. This frees hemp companies from Schedule I restrictions, allowing them relative freedom to operate within and outside of the United States.Other more mainstream marijuana players have entered the CBD market. Canopy Growth (NYSE:CGC) grows the product and rumors abound that Aurora Cannabis (NYSE:ACB) will soon follow. However, both stocks have fallen in recent months due to compressing multiples and falling prices in dried cannabis. * 7 Momentum Stocks to Buy On the Dip Some CBD stocks have not seen dramatic stock price increases. The following stocks to buy appear well-positioned to profit CBD-focused investors:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aphria (APHA)Source: Shutterstock Aphria (NYSE:APHA) has become the world's third-largest cannabis producer. With prices of dried cannabis in decline, CBD has become one distinct outlet for adding value. It already offers an extensive line of products. In the U.S., it has worked to build partnerships to bring CBD products to market as it awaits legal status for its marijuana-based CBD.In addition to the high capacity, APHA stock also offers a low valuation. It maintains a forward price-to-earnings (PE) ratio of around 23.7. It also trades at just over 9.5 times sales, which comes in well-below many larger peers. Moreover, Wall Street believes it will turn profitable this year. Analysts forecast four Canadian cents (three cents) per share in earnings this year and 32 Canadian cents (24 cents) per share in 2020.APHA stock has also avoided the severe decline to hit larger Canadian names in the cannabis industry. Despite giving up most gains from earlier in the year, the price of APHA has remained steady since about May. Moreover, it has logged a 20% gain since the beginning of the year. This stability should position APHA stock to recover once sentiment turns. Charlotte's Web Holdings (CWBHF)Source: Shutterstock Charlotte's Web Holdings (OTCMKTS:CWBHF) has not yet become a household name. However, that may quickly change for the Boulder, Colorado-based producer and distributor of hemp-based CBD products. With companies such as Kroger (NYSE:KR) and CVS (NYSE:CVS) stocking their products, the public should increasingly recognize Charlotte's Web as more than just a children's book.The stock suffered in August as it reported an earnings and revenue miss. Still, amid the ups and downs, the stock has risen by nearly 65% since the beginning of the year. Investors may also pick it up at a discount as it has fallen by over 23% since just before the company missed estimates.Despite the miss, revenue grew by 45.3% year-over-year. Although profits fell from the four cents per share in the same quarter last year, operating expenses nearly doubled to fund expansion. * 7 Tech Stocks You Should Avoid Now Moreover, the forward PE ratio stands at just 24, a bargain considering the price-to-sales (PS) ratio of many unprofitable cannabis stocks exceeds that figure. Furthermore, Wall Street forecasts profit growth of 58.3% this year and 263.2% the following year. Given the low valuation and massive growth coming, investors should put CWBHF stock on their stocks to buy list before it becomes better known. Curaleaf Holdings (CURLF)Source: Shutterstock Like Charlotte's Web, Curaleaf Holdings (OTCMKTS:CURLF) is another stock on the verge of becoming better known. Based in Wakefield, Massachusetts, Curaleaf produces cannabis and hemp-based CBD products for wellness.Though much of its business faces Schedule I-based restrictions, it has managed to establish operations in 12 states. Still, with hemp-based CBD, they have the segue needed to go nationwide no matter what happens with marijuana laws.Moreover, the market seems intent on pushing CURLF stock higher. Despite a recent earnings and revenue miss, Curaleaf stock rose on a 231.2% increase in revenue year-over-year. Furthermore, despite volatility in the equity, CURLF stock has risen by almost 60% year-to-date. It has also begun to recover from a downturn in the stock that saw its value fall by about 43% between early May and mid-July.Admittedly, multiples offer a mixed picture. A PS ratio of 25.3 makes this one of the more expensive CBD stocks to buy. Also, it will need loosened Schedule I restrictions to achieve its potential. However, with it trading below its book value, investors should consider CURLF stock before it becomes more recognized. CV Sciences (CVSI)Source: Shutterstock CV Sciences (OTCMKTS:CVSI) is the leading CBD oil maker in the U.S. It sells CBD-based products under its PlusCBD brand. The San Diego-based company also runs a specialty pharmaceuticals division that produces CBD products to treat specific medical conditions.The company continues to position itself for expansion as it has begun construction on a 45,500 sq. ft. facility in the San Diego area. This will allow the company to increase production by an estimated 500%.CVSI stock earned a profit last year of nine cents per share. Despite rising revenue, it will swing to an estimated loss of four cents per share this year as the company invests in expansion. However, this should not take CVSI off of any stocks to buy list. Wall Street predicts a profit of 13 cents per share next year. * 7 Discount Retail Stocks to Buy for a Recession CV Sciences stock has lost about 25% of its value since the beginning of the year. Still, CVSI should become one of the stocks to buy hinges on its valuation. Despite the massive growth, CV Sciences trades at about 24.2 forward earnings and less than 5.2 times company sales. With revenue and sales set to spike, this makes CVSI stock look like a buying opportunity, not one investors should unload. GW Pharmaceuticals (GWPH)Source: Shutterstock GW Pharmaceuticals (NASDAQ:GWPH) has built its future on prescription-based CBD products. It manufactures Epidyolex, the first CBD-based drug approved by the Food and Drug Administration (FDA). By taking this step, it made itself a leader in prescription-based CBD products. Now that its other drug, Sativex, is now on the market in several countries, its prospects should only improve.At a forward PE ratio of almost 111 and trading at more than 31 times sales, GWPH may not look like it belongs on any stocks to buy list. However, Wall Street expects the company to turn profitable next year. It also forecasts 93.4% earnings growth in fiscal 2019 and 295.2% the following year.I recommended a buy on GWPH stock at $155 per share. Admittedly, that prediction may have come early. However, with the prospects for GW Pharma to lead this niche, I stand by the overall forecast.Moreover, it has seen fewer negative effects from the selloff in cannabis stocks than larger peers. Although it has fallen by more than 27% from its 52-week high, it has still risen by about 43% year-to-date. Given the strong sales of its CBD products, expect to see revenue and profit increases in the company's pipeline. HEXO Corporation (HEXO)Source: Shutterstock HEXO (NYSE:HEXO) presents a unique opportunity in many areas of the cannabis industry, including CBD-based products. With its 30% market share in its home province of Quebec, it maintains a base from which it can move into markets in both Canada and the U.S. Moreover, with its alliance with Molson Coors (NYSE:TAP), it presents a unique opportunity in the CBD and cannabis-based beverage market.HEXO stock trades at just over $4.20 per share as of the time of this writing. It has lost about half of its value since peaking at $8.40 per share in late April. This makes HEXO somewhat risky as it has followed larger Canadian peers on a downward trend.Our own Laura Hoy likes HEXO stock but warns against holding a position going into earnings. I agree with this sentiment. However, the decline has taken its forward price-to-earnings ratio to about 47. While that may seem high amid flat growth for 2019, analysts are looking for 170.6% earnings growth for fiscal 2020. * 10 Battered Tech Stocks to Buy Now Although HEXO stock remains one of the riskier stocks to buy, its position in Quebec and its alliance with Molson Coors should give the company market niches with which it can lead in CBD and perhaps cannabis in general. Planet 13 Holdings (PLNHF)Source: Shutterstock Planet 13 Holdings (OTCMKTS:PLNHF) has made a name for itself in its home market of Las Vegas through retailing. Its Cannabis Entertainment Complex, otherwise known as the "Superstore," attracted a record number of visitors in August.But aside from its gaining fame as a retailer, it also happens to produce CBD. In May, Planet 13 announced the introduction of its Planet M CBD brand. They made this available at its Superstore, the Fashion Show Mall, with plans to expand to other retail outlets. They also made Planet M available online.This strategy appears effective. Analysts believe that this is one of the stocks to buy in large part because it will probably turn a profit this year. Earnings should grow quickly from there. Analysts predict an increase of 118.2% this year and a staggering 450% in fiscal 2020. Despite the massive growth, it trades at only 17.5 times forward earnings and just over 16.1 times sales.PLNHF stock has stagnated since May, trading in a range between $1.80 and $2.20 per share. However, it has not suffered the decline seen in most other cannabis stocks. It has also risen by around 107% since the beginning of the year.As the Superstore increasingly becomes a destination for cannabis shoppers, it should not only bolster sales of CBD products, but it should also boost the growth of PLNHF stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) recently reported earnings and sales came up short. As such, Aurora Cannabis stock sold off. It's been a painful run for cannabis stocks over the past few months as they desperately lack a catalyst to send their share prices higher.Source: Shutterstock Earnings clearly won't be it for Aurora Cannabis stock at this point. However, there is one silver lining to the recent decline: no new lows.That's right. Sometimes good news can be found in bearish developments. Should ACB stock log a higher low, then it may be on the road to recovery. Let's explore:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Revenue MissOn September 11, Aurora Cannabis reported revenue of 98.84 million CAD. That missed analysts' expectations by more than 4.5 million CAD. While that many not seem like a big deal, investors have to take the miss in context. * 7 Tech Stocks You Should Avoid Now It's the company's second straight revenue miss and its fifth miss out of the last six quarters. Further, Aurora Cannabis doesn't have the type of valuation that supports its stock price when it misses on top-line sales. That goes for most if not all of the cannabis industry, including Canopy Growth (NYSE:CGC), Aphria (NYSE:APHA), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) and others.In other words, these companies have incredibly high valuations that are all banking on equally incredible growth. And while sales quintupled year-over-year in the most recent quarter for ACB, it came up short of expectations.It doesn't help that margins have been under pressure as well.It's not that Aurora Cannabis has a poor balance sheet or that the cannabis market is hitting a dead end. It's that sentiment is not bullish, and momentum is bearish for cannabis stock right now. ACB and others need some positive catalysts, and missing headline expectations isn't one of them. Trading Aurora Cannabis StockAhead of earnings, Aurora Cannabis stock had rallied through the 50-day moving average. However, it ran right into downtrend resistance (blue line). Had the results been strong, investors may have been in store for a strong finish to the week. Click to EnlargeNow, shares are down about 8.5% from Wednesday's close. With the fall, the ACB stock price is back below the 20-day and 50-day moving averages. When these two moving averages went from support to resistance is outlined very clearly on the chart via purple arrows.That was a prelude to failing support that ushered in a wave of selling. Luckily for InvestorPlace readers, they saw this break months ago and have been able to sidestep some of the pain.The post-earnings decline also solidified downtrend resistance. As we discussed at the top of the article though, the silver lining is that ACB stock has not made new 2019 lows -- at least, not yet.From here, bulls need to make sure Aurora Cannabis stock stays above $5.40. If this level gives way, a test of downtrend support becomes possible, as does a test of the $5 mark. Instead, if ACB stock can hold up and avoid a new low, it can start to work higher despite a lower-than-expected revenue result. Rallying on weaker-than-expected results can be viewed as a bullish development, as it may suggest all the bad news is priced in.The simple way to evaluate Aurora Cannabis stock from here? Note the $5.40 benchmark. Below it is bad, above it is constructive. Bottom Line on ACB StockLet's not mince words here: Aurora Cannabis is very much a speculative "prove-it" stock. That is, it's not a blue-chip name like Microsoft (NASDAQ:MSFT) or Apple (NASDAQ:AAPL). Nor is it a dependable staple going through a hard time like Boeing (NYSE:BA).While Aurora Cannabis is one of the notable names in a high-growth emerging industry, it's still a speculative name that needs to prove to investors that it can turn that revenue growth into cash flow and continue to expand with discipline. From CFO Glen Ibbott:We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive production costs lower and improve gross margins. Aurora's diversified product portfolio remains in demand with patients and consumers alike.Aurora has seen a significant increase in assets, climbing from $1.43 billion at year-end 2018 to $4.2 billion in its most recent quarter. In the same time frame, total liabilities have increased from $253 million to approximately $850 million. While liability growth outpaces asset growth, its assets far outweigh liabilities.ACB has staying power, at least in the short term. But what it and the recent of the cannabis space really need is a catalyst and better sentiment.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post Is Aurora Cannabis Stock a Buy Despite a Revenue Miss?Â appeared first on InvestorPlace.
The markets are hanging out in the red today, spurned on by fears about a spike in oil prices. Drone strikes against oil facilities in Saudi Arabia sent the oil market scrambling -- both Brent and WTI crude prices are up well over 10% today.Source: Shutterstock The timeline for getting the damage repaired is likely to be counted in weeks, not days. And in the meantime, oil stocks are on everyone's mind. The United States Oil Fund (NYSEARCA:USO) pushed to gains of over 13% on the day. It would be better news if it didn't come with headlines of international unrest.But as many readers focused their attention on the oil stocks, here are a few of the other articles InvestorPlace readers found particularly interesting today:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aphria Stock Needs Better FriendsThere's a tendency in the markets for some stocks to occasionally fall in sympathy with one of their close peers. And James Brumley thinks that's exactly what's happening with Aphria (NYSE:APHA) stock.Aphria flexed on earnings, and notable to many investors was the fact that APHA actually turned a profit. That's something plenty of its marijuana stock brethren are still working toward. You'd think that would launch APHA stock to the head of the pack, but its rally mostly faded with the rest. * 10 Recession-Resistant Services Stocks to Buy Brumley does point out that the amount of Goodwill on the books may be a problem, but overall says, "Right or wrong, Aphria stock is guilty by association. When most other names in the business are losing ground due to valuation concerns, the selling can be rather indiscriminate." Understanding How Hexo Stock Values Its InventoryAs we wait for Hexo (NYSE:HEXO) to report earnings, Mark Putrino wants to make sure you understand one of the most interesting and potentially misunderstood parts of a marijuana stock's valuation -- how it values its inventory.As Putrino explains, "Four variables are considered to determine the valuation. These are the average selling price, the yield per plant, the stage of growth and the amount of wastage."The average selling price and stage of growth are pretty straightforward, but wastage and yield are estimated, and if you want to invest in Hexo stock, it's important to understand how they make those estimates.(For what it's worth, he also mentions that Hexo is "very forthcoming" with the calculation and the numbers it uses.) Vital Levels to Watch for Nio StockA couple of InvestorPlace writers took a look at Nio (NYSE:NIO) today, both considering it for a short-term trade.Nio stock is on a bit of a roll lately, and Bret Kenwell says that with a potential bottom in for the Chinese auto market, Nio could be ready for more gains. As he put it, "The technicals are starting to behave better for Nio stock; now it needs the fundamentals to improve as well."Nicolas Chahine, meanwhile, thinks if the stock can push past resistance, there are more gains to be found. "The NIO stock price is now headed into resistance because of a price cluster near $3.50 per share," he wrote. "If I'm not yet long the stock, I would wait until the bulls are able to push prices above that before chasing it. "It's also important to remember that Nio has earnings coming up on Sept. 24.That's it for today's commentary. Please feel free to drop us a note at email@example.com to let us know what we got right and what we got wrong. Happy investing! More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post InvestorPlace Roundup: Aphria Stock Needs Better Friends appeared first on InvestorPlace.
At the beginning of last month, Aphria (NYSE:APHA) was on top of the world. The cannabis company's fiscal fourth quarter revenue blew past estimates, catapulting Aphria stock higher by more than 40%. Investors were elated.Source: Shutterstock APHA stock is now down 10% from that peak and seemingly still drifting lower. So much for the notion that one of the pot industry's rare profitable companies is a must-own name.There's more to the setback than just a little bad luck though. The immediate evaporation of all that enthusiasm is an indication of just how unconfident the market is in Aphria. Ditto for its peers, which have performed similarly poorly for the same timeframe.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe frustrating part is, this particular stock actually deserves a little more credit than it's getting. Aphria Stock Fails to LaunchAs a refresher, last quarter's top line of $128.6 million easily topped estimates of $97.8 million. The bulk of that figure was contributed by the acquisition of an existing distribution business in Europe, called CC Pharma.Canadian sales of recreational marijuana only came to $18.5 million, though that figure was still up 85% year-over-year. * 7 Discount Retail Stocks to Buy for a Recession Most noteworthy of all, Aphria turned a profit of five (Canadian) cents per share. Even the most notable names in the business like Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) are still losing money.The numbers were mostly irrelevant a couple of days after the earnings figures were posted though. That's how long it took the post-earnings bullishness to fade. It also was more or less how long it took other cannabis stocks to come down off of their most recent post-earnings high (if they created one at all).What gives?Although cannabis has a clear future, most of the highly-touted and highly-traded cannabis stocks are grossly overvalued compared to the kind of revenue they'll be able to produce even in the distant future. It's the unspoken reality most marijuana investors quietly suspect but are hesitant to voice.The irony is, Aphria is something of an exception to that unspoken paradigm. It just doesn't matter. Aphria Stock Is Reasonably ValuedThe widely-applied pessimism is certainly understandable. Canopy Growth lost a ton of money last quarter, even after stripping out the impact of a writedown. Tilray logged a loss last quarter too, of $31 million, tripling its loss from a year earlier and leaving investors wondering if there's actually any money to be made in the pot business. There is, and Aphria is making some of it.Granted, it's not easy, and probably won't be consistent income for a long, long while. But it's there. Last quarter, Aphria reported an adjusted EBITDA of $1.85 million on its cannabis operations. Its distribution business, separately, added $3.87 million worth of EBITDA to the mix.It's not great, but it's something. And, as Aphria scales up and gets better at what it does, the margins as measured by percentage will improve. Aphria believes they'll start to meaningfully improve this year, in fact, forecasting an EBITDA total of between CA$88 million and $$95 million for the fiscal year that just began.Multiplying that figure by a typical enterprise value/EBITDA figure of 14 would translate into a market cap on the order of $1.3 billion. Aphria's is at $1.7 billion, which is more than it theoretically should be, but some tolerances have to be made for the rapid sales and EBITDA growth the company is producing.On a price/sales basis, the market cap of $1.7 billion is a very reasonable 2.5 times this year's expected top line of between CA$650 million and CA$700 million. That's right around the marketwide average. And, let's not forget that Aphria is also legitimately profitable. Looking Ahead for Aphria StockEven the marijuana movement's most enthusiastic investors struggle to say pot stocks didn't get ahead of themselves, driven higher by hype before these companies knew everything they need to know. Much of the weakness seen since March of this year reflects the realization that simply being in the cannabis business is no assurance of success.Right or wrong, Aphria stock is guilty by association. When most other names in the business are losing ground due to valuation concerns, the selling can be rather indiscriminate.Aphria's $670 million worth of goodwill sitting on the balance sheet doesn't help either, as it could easily turn into a writedown sooner or later.Still, APHA stock is a name worth adding to your watchlist, as it's one of the more sensible stocks to own in a new industry that drove investors into a wild frenzy last year. The question, of course, is figuring out when that groupwide bearish pressure might finally ease up.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Unfortunately, Aphria Stock Suffers from Guilt by Association appeared first on InvestorPlace.
Aurora Cannabis posted its fourth-quarter earnings after the market closed on Wednesday. The company posted revenues of 98.9 million Canadian dollars.
High Tide Announces Opening of 1st KushBar Location Bringing its Total to 25 Branded Retail Cannabis Stores across Canada
Aurora Cannabis (NYSE:ACB) stock dropped in after-hours trading on a weak earnings report. Shares fell from $6.49 at the close Sept. 11 to below the $6 level. With results failing to meet consensus, investor sentiment for ACB stock could become more negative. But is this recent stumble an opportunity to load up on Aurora Cannabis stock?Source: Jarretera / Shutterstock.com Shares continue to trade at a high valuation. But the long-term strategy for Aurora may still be in motion. Let's take a closer look and see if there's short-term upside for the ACB stock price. ACB Stock Earnings Fall Shy of ConsensusOn Sept. 11, Aurora released earnings for their fourth quarter which ended June 30. Net cannabis revenue grew 61% from the prior year's quarter, to $94.6 million CAD. The company's cash cost to produce per gram fell 20% to $1.14 CAD per gram. Gross margins grew to 58% from 55% in the prior year's quarter. Thanks to increased margins, the company's adjusted EBITDA losses shrunk from $36.6 million CAD in Q3 2019 to a $11.7 million CAD loss in Q4 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor fiscal year 2019, sales were $247.9 million CAD. This is an 349% increase from the prior fiscal year. But despite this growth, Aurora fell short of consensus. Earlier in 2019, ACB anticipated positive adjusted EBITDA by the end of FY19. But the company revised this guidance in August. After yesterday's earnings, the company is no longer referencing "positive adjusted EBITDA." Instead, Aurora "expects adjusted EBITDA to improve." * 10 Battered Tech Stocks to Buy Now The analyst community also pared down their estimates after the August walk-back. According to FactSet (NYSE:FDS), prior to August, analysts estimated Q4 revenue of roughly $112 million CAD. This was cut to a range of $100 million CAD-$107 million CAD. With actual Q4 performance falling short of this revised consensus, there are new challenges to the growth story with ACB stock.Other cannabis stocks have posted weak results in the past few months. Weak numbers at Canopy Growth (NYSE:CGC) pushed shares down 25% since mid-August. Tilray (NASDAQ:TLRY) shares have fallen from $41.16 per share to near $30 per share since its August earnings release. Reality is bringing pot stock valuations back to earth. Does this mean it's time to buy on the dip? Let's take a look at the valuation of ACB stock relative to peers. Aurora Cannabis Stock Trades at a Premium to PeersACB stock trades at a premium to most of its peers. Aurora Cannabis stock trades at an enterprise value/sales ratio of 53. Compare this to Canopy Growth, which trades at an EV/Sales ratio of 40.5. Tilray trades at an EV/Sales of 36.2. Aphria (NYSE:APHA) trades at a low EV/Sales ratio of 9.7. The only major pot stock trading at a higher valuation is Cronos (NASDAQ:CRON). Cronos trades at a staggering EV/Sales ratio of 106.4.But does this make ACB stock overvalued? The cannabis sector in general continues to be richly priced. Despite stumbles, investors anticipate a bright future for the marijuana industry. But with top-line performance falling short of expectations, can investors expect a short-term rebound? The Canadian marijuana market continues to be over saturated. A fully open U.S. market continues to be out of reach. Congress has made little progress on federal marijuana legislation.A saving grace for Aurora Cannabis stock is the company's global diversification. As I have mentioned previously, Aurora's focus on European markets has been a strength. Aurora has also focused more on the stable medical segment. But other risks counter the bullish case. The company's heavy use of convertible debt could cause problems down the road. Additional issuance of shares could drive the ACB stock price down further. Stay on the Sidelines With AuroraIt's tough to stomach the current ACB stock price. While the company has many strengths, the path to profitability remains unclear. There needs to be a shakeout in the Canadian cannabis market before it can become profitable. Solid movement on the U.S. federal legalization front needs to happen. One of the major marijuana stocks needs to hit profitability. Even if said "profitability" is adjusted positive EBITDA.I believe marijuana stocks will fall further. Aurora Cannabis stock is no exception. The company's shares could rebound on a crumb of good news. But in the short term, all bets are off with regards to the ACB stock price. To play it safe, stay on the sidelines with Aurora. Wait for a more opportune moment. If valuations turn irrationally low, make your move. But otherwise do not enter a position.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 * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Weak Earnings Might Cause Aurora Cannabis Stock to Keep Falling appeared first on InvestorPlace.
Cronos Group and Aphria are Jim Cramer's top picks in the cannabis sector. Aphria’s upbeat earnings results restored investors' faith in the sector.
Aurora Cannabis (ACB) stock has been rising before its fourth-quarter earnings on Thursday. The stock has risen 12.4% this month.
Canopy Growth (NYSE:CGC) has been on a roller coaster so far in 2019. Like much of the rest of the market, Canopy Growth stock came into the year depressed and under pressure.Source: Jarretera / Shutterstock.com However, it didn't take long for shares to go from sub-$30 to $50+ though. That price action took place in the month of January, but bulls have lost that steam.Luckily for InvestorPlace readers, many have been bearish since $38.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter plunging all the way down to $22.76, shares are on the rebound. The hard part is determining whether this is a dead cat bounce (i.e. a temporary reprieve before more downside ensues) or a true reversal off the lows. With the recent rally, shares are no longer down more than 50% from the highs, although Canopy Growth stock still sports big losses.Let's take a closer look at the stock to determine what the best course of action is. Trading CGC Stock Click to EnlargeLast week, CGC was a Top Stock Trade on InvestorPlace and I also flagged the name on Twitter. Even though shares are taking a breather, it's important to see that they're holding up above the 20-day moving average. * 10 Stocks to Sell in Market-Cursed September While it would be discouraging to see CGC lose this mark, As long as it stays above $26.25, it looks technically okay for bulls. However, the big question is whether shares can hurdle $30.At $30, CGC stock would approach a significant level on the chart, as well as downtrend resistance (blue line). Above here and Canopy Growth stock can start working on filling the gap up to $32. There's also the 50-day moving average up near $32, although it's declining on a daily basis as well.Over $32 and CGC bulls can start thinking about a return to the 61.8% retracement, which is currently north of $36. But let's not get too ahead of ourselves. We first need to see CGC hold up over $26.25 and push through $30. After that, we can start looking at further upside targets.Below $26.25 and the recent lows near $23 are back on the table. Balance SheetCGC still has a strong balance sheet, but with negative free cash flow and M&A, it's weakening over time.Cash and short-term investments of $2.42 billion are down more than 32% from the quarter ending in December 2018. Current assets are down ~$916 million (-23.7%) to $2.95 billion in the same period, although total assets are up 4.2%.That also comes with 31.3% spike in current liabilities to $284.6 million. Total liabilities have gone from $891 million six months ago to $2.1 billion, up roughly 135%.So while total assets still outweigh total liabilities by nearly three-to-one and there are no concerns about CGC meeting its short-term obligations, the balance sheet is weakening vs. six months ago. Sizing up Canopy Growth StockMany considered Canopy Growth stock (and many others still do) the blue chip cannabis stock to be long.It had the strongest balance sheet, early-mover advantage in both the U.S. and Canada, and strong backers via the $4 billion investment from Constellation Brands (NYSE:STZ).But it's not just CGC stock that's been under pressure. We've seen weakness in Aphria (NYSE:APHA), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON), Aurora Cannabis (NYSE:ACB) and most others.Many of the bullish catalysts for CGC and the cannabis industry as a whole are still in place. Both the U.S. and many parts of the globe are working toward legalization. Many companies and startups are focused on cannabis-related treatments and recreational uses.While Canopy reported 250% year-over-year revenue growth for Q1 last month, the results missed expectations. Earnings per share badly missed estimates, although the miss can be explained away by some financial engineering related to expiring warrants. Still, it would have been nice to be provided an adjusted number in the release.Further, it doesn't help that Constellation Brands and Canopy's management had a "strategy clash" in July, which results in Canopy CEO Bruce Linton leaving the company. That adds some uncertainty to the picture.Where does that leave us? The valuation is rich for CGC and most other cannabis plays and that's putting it lightly. That's no secret, but when the news flow is negative and momentum is bearish, the valuation will hurt the share price. We need to see the charts start to cooperate for Canopy Growth to look good on the long side.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Keep an Eye on Canopy Growth Stock, but Don't Buy It Just Yet appeared first on InvestorPlace.
Aurora Cannabis should report its fourth-quarter earnings results on Thursday. So far, September has been positive. As of Monday, the stock has gained 8.7%.
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
Cannabis legalization is a vital topic in the US. Meanwhile, vaping related deaths continue to rise. Will vaping concerns kill the US cannabis dream?
On September 6, Aurora Cannabis and Aphria were trading at a higher forward EV-to-sales multiple than their peers’ median value of 12.26.