|Bid||6.77 x 800|
|Ask||6.78 x 2200|
|Day's Range||6.64 - 6.83|
|52 Week Range||3.75 - 16.86|
|Beta (3Y Monthly)||3.80|
|PE Ratio (TTM)||22.64|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Now a days investing into cannabis companies is a whole different ball game post legalization. The investing landscape has changed so dramatically that we now need to be a much smarter, safer and in a sense more conservative investor to succeed when it comes to cannabis investing. From 2017-2018, the years when the cannabis industry was exploding and receiving a ton of hype, you had a much greater chance of winning big weather it was on a penny stock, or a rock solid large cap licensed producer, it pretty much didn't matter, if the company was into “cannabis” it was going up.We have seen a huge change within the market over the last 12 months, especially after legalization. Investors are realizing that the companies positioned to capitalize on the global market, or the companies that have positioned themselves in highly profitable niches like extraction, their stocks are doing very well to this day. Unfortunately for other companies namely small cap companies who don't really have a distribution channel or global presence, we are seeing many of those stocks stuck in nasty downtrends hitting fresh 52 week lows as the weeks go by. In my opinion, there is going to be a massive amount of consolidation going on within the cannabis industry where the large cap licensed producers continue on an acquisition frenzy until all of the small cap companies get bought out or go bankrupt, unless of course they are well positioned in a very profitable niche.This bring us to our next point. Post legalization has created a lot of value for many of the large cap cannabis companies and their valuations reflect the successful partnerships and high profile hires we have seen across the sector so far. Personally for me I like to invest primarily in large cap cannabis companies but I struggle with finding a large cap company where I feel that the valuation is relatively cheap.One stock that comes to mind is Aphria (APHA), and although I feel it was tainted after a short sellers report brought the companies stock price down past $5 Canadian, I think it could be one of the last remaining bargains within the large caps in the cannabis sector.Comparing the performance of Aurora Cannabis (ACB), Cronos Group (CRON), Canopy Growth (CGC) and Aphria we can see that over the past year Aphria is clearly the under performer of the pack.With a market cap of 2.59 billion ($CAD) as of Monday may 27th, over 1000 employees,115,000 kgs of current annual cannabis production and a global footprint in 10 countries and counting it's clear that Aphria has some valuable assets that I feel the market is discounting.In my personal opinion Aphria is very undervalued to its large cap counterparts and one of the last bargains we may see in a while. To reinforce this statement, Jefferies analyst Owen Bennette initiated coverage on Aphria with a $15 price target (USD) and stated that he felt the company was undervalued. As a value investor I struggle to buy into momentum when it comes to finding an entry point in the booming cannabis industry, but in this case Aphria checks off many of the boxes for me.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on APHA: * Is Aphria Really the Cheapest Cannabis Stock Right Now? * Analysts Have Chosen: GWPH, APHA and CGC Are Top Cannabis Stock Picks * The Cannabis ‘Magic Bus’ Is About to Leave the Station! Next Stops? Aphria More recent articles from Smarter Analyst: * CannTrust Holdings (CTST): Even With Entry Into U.S. Market, Investors Must Remain Patient * Deutsche Bank Remains Bullish on UBER and Facebook Stocks * Facebook's (FB) Libra Could Be the Next Big Thing * Chinese Government Setting Tone of Support Towards Apple (AAPL)
Canada’s leading marijuana producer Canopy Growth said shareholders approved its deal to acquire the American cannabis chain Acreage Holdings — if the U.S. legalizes marijuana federally.
Marijuana stocks seem a bit wobbly at the moment and Canopy Growth (NYSE:CGC) is no exception. The CGC stock price hasn't tanked, to be sure. Shares in fact still are up a healthy 53% in 2019. But the gains came early. Since late April, Canopy has dropped over 20%.Source: Shutterstock Canopy Growth earnings on Thursday will provide an opportunity to reverse the recent trend. That's true not just for Canopy Growth stock but for the marijuana sector as a whole.The trend in the CGC stock price mirrors that of other widely held pot plays. Investor patience seems a bit thin. Valuations, even with modest declines, remain sky-high. And sector-wide earnings of late haven't been close to good enough.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIf Canopy -- the industry's largest player -- can't deliver, investors are going to wonder who can. And that suggests that the rest of the sector could follow Canopy stock downward. Expectations for Canopy EarningsAnalysts are expecting Canopy Growth to post a reasonably large loss in its fiscal fourth quarter. The current consensus estimate is for a loss of 24 cents CAD per share. * 7 Top-Rated Biotech Stocks to Invest In Today That figure isn't all that meaningful for two reasons. First, the reported figure likely isn't going to be close to that average. Canopy's net income is impacted by changes in fair value of its convertible debt and warrants owned in smaller cannabis companies. In Q3, for instance, Canopy actually reported a large net profit thanks to those accounting effects.Secondly, investors aren't really going to care about profits. Canopy, adjusting for one-time and accounting effects, is going to lose more money than it did a year ago. Since last year's fourth quarter, Canopy has acquired retail chain Hiku, which is not yet profitable. It has invested heavily in production and processing capabilities.These are investments Canopy has to make, decisions that shareholders generally support. There's no point in raising roughly $4 billion from Constellation Brands (NYSE:STZ, NYSE:STZ.B) if the money isn't going to be spent. Canopy has a head start on the industry, and it needs to keep spending to maintain that lead. That's actually the bull case for CGC stock, as I've detailed previously.Rather, investors are going to focus on revenue, pure and simple. Analysts expect revenue to increase 314% year-over-year. There will be some help from Hiku and other acquisitions in that growth but Canopy sales are going to soar. The question for Canopy Growth stock and for the sector will be if they climb high enough. Bad Omens for Canopy Growth StockThe concern for owners of CGC stock heading into earnings is that big growth from other pot plays haven't been big enough. Hexo (NYSEAMERICAN:HEXO) increased revenue nine-fold in its fiscal Q3. HEXO stock fell 13% in the next two sessions after reporting those earnings last week.Cronos (NASDAQ:CRON) earnings last month looked disappointing, though CRON shares have mostly held up. In April, Aphria (NYSE:APHA) stock tanked on an earnings miss with sales up over 500% YOY. Tilray (NASDAQ:TLRY) did a little better, yet its earnings last month largely failed to arrest its equity's long decline. Admittedly, TLRY shares looked awfully bubbly last year.Among the most widely held marijuana stocks, there hasn't been a recent earnings report that investors have truly cheered. And so investors betting on an increase in the CGC stock price next week are betting against the trend. Not Just the CGC Stock PriceThat string of poorly (or at least coolly) received earnings reports is why Canopy earnings are so important to the sector. There simply hasn't been much good news. Sales in Canada aren't growing, though supply constraints are an issue. Movement in the U.S. has been essentially nonexistent since the farm bill was passed in December.From a short-term standpoint, then, Canopy earnings are the last major catalyst for the sector for some time. We're probably talking close to two months. In a broad market that seems a little prone to panic and subsequent profit-taking, that's a potential problem.Therefore, Canopy earnings need to be -- and will be -- watched closely by the entire industry. If Canopy Growth stock sells off on Friday after Thursday evening's report, it's unlikely to be the only one to do so.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) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post Earnings Will Be Huge for Canopy Growth and Marijuana Stocks appeared first on InvestorPlace.
Even though the cannabis industry is still in its infancy, investors looking for a marijuana stock with a dividend aren't completely out of luck. Income-seeking investors should look to Innovative Industrial Properties (NYSE:IIPR) as a possible pot play. IIPR is structured as a real estate investment trust (REIT) and to keep that favorable tax treatment, REITs must be out 90% of their operating income in the form of dividends.Source: Shutterstock Cannabis investing is still in its formative stages, but there are a few traits many marijuana stocks share in common. To be clear, we're talking about the industry's credible names that trade on major exchanges. Think Cronos Group Inc. (NASDAQ:CRON), Aphria (NYSE:APHA) and others.Essentially the entire universe of major cannabis stocks are considered growth names. It is merely a matter of whether they are mid- or small-cap growth stocks. As a result, investors searching for dividends in the marijuana space are not going to find a lot.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Red-Hot IPO Stocks to Buy for the Long Run For the moment, the best way for investors in the U.S. to marry the concepts of dividends and cannabis stocks is with IIPR. IIPR Backstory Leads to a Wide MoatIIPR's backstory remains relevant today. Innovative Industrial Properties was able to procure its REIT status before President Trump won the White House. After Trump won, the company's rivals encountered difficulties securing the REIT treatment, essentially extending a competitive advantage to IIPR.Innovative Industrial Properties owns and operates industrial venues that are leased to legal medicinal cannabis firms. Moreover, IIPR fills an important void for many legitimate cannabis growers and operators: providing funding that is unobtainable at traditional banks.Business owners known getting a loan from a traditional bank is hard. When your business is considered illegal at the federal level and your bank is federally regulated -- as all banks are in the U.S. -- there is no avenue to financing at that bank.Innovative Industrial Properties' model is simple: it buys properties from growers that are regulated at the state level and leases those properties back to the growers. By selling to IIPR, the growers get much-needed capital without the hassle of being turned down by their local bank. The benefit to Innovative Industrial Properties is that the leases its tenants sign are usually long term, providing the company and its investors with revenue predictability and maybe down the road, low earnings variability.For those pondering how Innovative Industrial Properties is able to trade on a major U.S. exchange, the answer is twofold. First, the company does not actually touch marijuana plants or grow them. Second, Executive Chairman Alan Gold ran healthcare REIT BioMed Realty Trust prior to that company being sold in 2016, meaning he has a history of running a legitimate, NYSE-traded company. The Bottom Line on IIPRInnovative Industrial Properties has a lot going for it, including the aforementioned competitive advantage, which generates robust yields on its deals."Capital remains sufficiently scarce that IIP averages a 15% yield on its sale-leaseback deals," according to Barron's.However, positive traits do not always come cheap in financial markets. Due to their above-average dividend yields and defensive characteristics, REITs usually are not value stocks -- nor are price-to-earnings ratios generally useful metrics. You invest in REITs for the payouts, not necessarily price increases.However, Innovative Industrial Properties trades for nearly 106x times earnings, making it feel like an Internet stock dressed up as a REIT. Plus, the stock yields just 1.78%. That is less than what investors get on the S&P 500 and 10-year Treasuries, which are significantly less risky than shares of IIPR.However, many pot stocks don't have a P/E ratio at all -- because they don't yet have earnings. * 7 Top-Rated Biotech Stocks to Invest In Today Based on its steady funds from operations (FFO), Innovative Industrial Properties' valuation is not actually alarmingly high. Importantly, that FFO implies the company has adequate payout coverage and dividend growth potential.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post Looking for a Pot Stock With a Wide Moat and a Dividend? Try IIPR appeared first on InvestorPlace.
The slow takeoff of recreational marijuana sales in Canada was expected to gain speed when Canada planned to allow sales of vapes, edibles, beverages, and the popular CBD. Now that’s been delayed.
Cannabis stock traded broadly lower Friday, putting the sector on track for a fourth-straight loss, as Hexo Corp. shares extended losses toward a 3-month low in the wake of disappointing quarterly results. The ETFMG Alternative Harvest ETF dropped 2.1%, as 31 of 38 components sold off, and the Horizons U.S. Marijuana Index ETF shed 3.2%. The ETFMG ETF has now lost 5.2% over the past four sessions. Among the sector's more-active components, shares of Hexo Corp. dropped 4.1%, after losing 8.8% on Thursday, to put them on track for the lowest close since March 12. Elsewhere, shares of Aurora Cannabis Inc. inched up 0.1%, after losing 4.7% over the past three days; Cronos Group Inc. dropped 5.7%; Aphria Inc. shed 2.0%; and Canopy Growth Corp. declined 2.0%. The ETFMG ETF has now shed 15% over the past three months while the S&P 500 has gained 2.7%.
Left and right, Seaport Global is rolling back prices -- or at least price targets -- on Canadian cannabis stocks. (It's kind of like a sale at Wal-Mart, but in a bad way). On Wednesday we looked at analyst Brett Hundley's price target cut on Hexo stock. Today, we'll be taking a look at his "update" on Aphria (APHA).In contrast to the Hexo report, which Hundley rushed out ahead of that company's earnings, this update has no particular catalyst behind it -- just a general feeling that the analyst has been too optimistic about marijuana companies' prospects in general, and needs to his numbers to account for that fact.Fact is, the bulk of Hundley's update on Aphria focuses on good news. Aphria raised $350 million in convertible debt in April, for example, filling Aphria's coffers with enough cash "to carry it through FY2020 and into FY2021," in the analyst's opinion. And by the time 2021 rolls around, says the analyst, Aphria should be solidly free cash flow-positive, and able to generate its own cash, rather than having to borrow it from bankers.The company has also struck a deal with privately-held cannabis "vape" device maker PAX Labs to supply "pods" filled with heat-able and inhalable cannabis oil, to be used in PAX's vaporizer devices when the market for such value-added marijuana products opens up in Canada "later this year."Nonetheless, Hundley says he's cutting his forecasts for both Aphria's sales and earnings before interest, taxes, depreciation, and amortization (EBITDA) in both fiscal 2020 and 2021. Sales estimates for FY2020 inch down 3% to C$520 million, and ratchet back 4% to C$851 million in FY2021. EBITDA estimates for 2020 go from a C$39 million profit to a $3 million loss. And in 2021, EBITDA estimates fall 15% to $148 million.Regardless, Hundley maintains a "buy" rating on the stock, albeit at a lower $13 price target ($16 previously). (To watch Hundley's track record, click here)The big pictureWell, for one thing, even if sales and EBITDA estimates are falling, Hundley still sees great things in store for Aphria. If all goes as planned, Aphria should nearly triple marijuana sales in 2020 over 2019, then grow them another 64% in 2021. By that point, Aphria should be selling enough weed that its operations will become profitable. Whether they'll be profitable enough to justify Aphria's $1.8 billion market cap remains an open question. Then again, though, you could say that about almost any cannabis stock these days.Rather than focus on valuation, therefore, investors might be best advised to focus more on Hundley's market commentary, using it as a guidepost for "what happens next." In that regard, the analyst notes that "Aphria believes that vapes and concentrates will represent close to 30% of the entire Canadian adult-use market by 2021 ... Vape products will likely follow in legal US state footsteps and become a meaningful proportion of the new Canadian market."In other words, Hundley is of the opinion that investors need to peer through the marijuana smoke haze, and start focusing instead on which companies will dominate the market for marijuana vapor, which would include devices ("vaporizers" or "e-cigarettes"), the cannabis oil they heat for inhalation, and the pods that oil comes in.This, in the analyst's view, is where the market is heading -- and probably where you will want to be invested going forward.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on APHA: * Why Aphria (APHA) Stock Could Be the Hidden Gem of the Cannabis Sector * Is Aphria Really the Cheapest Cannabis Stock Right Now? * Analysts Have Chosen: GWPH, APHA and CGC Are Top Cannabis Stock Picks * The Cannabis ‘Magic Bus’ Is About to Leave the Station! Next Stops? Aphria More recent articles from Smarter Analyst: * CannTrust Holdings (CTST): Even With Entry Into U.S. Market, Investors Must Remain Patient * Deutsche Bank Remains Bullish on UBER and Facebook Stocks * Facebook's (FB) Libra Could Be the Next Big Thing * Chinese Government Setting Tone of Support Towards Apple (AAPL)
Shares of Cronos Group Inc. (NASDAQ:CRON), the Canadian medical marijuana producer, have been on a roller coaster ride this year. In the first quarter, Cronos stock more than doubled, but as the quarter drew to a close, investors departed the name, sending the shares tumbling over the course of April and May.Source: Shutterstock This month, Cronos stock seems to have found round-number support at $14 and is rallying hard off that level. While the stock was pinched on June 11, to the tune of a 2.42% loss, it is still up 28% over just the past week.One of the obvious catalysts this month for Cronos stock was an upgrade by Bank of America analyst Christopher Carey coupled with an epic, upward price target revision by that analyst. Earlier this month, Carey lifted his rating on Cronos stock to "buy" from "underperform," the equivalent of a "double upgrade" because there is usually a rating in between "buy" and "underperform." Additionally, the analyst boosted his price target on Cronos stock to $20 from $13, implying a decent amount of upside from Tuesday's close of just under $17.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cronos ControversyAs is the case with so many cannabis stocks, opinions differ on Cronos stock. While Cronos has its share of supporters, there are also skeptical voices. At least one analyst prefers Aphria (NYSE:APHA) to Cronos, though the former is about $1.3 billion smaller than the latter in terms of market value. * 7 Stocks to Buy for the Coming Recession Jefferies analyst Owen Bennett said Aphria's strengths in extraction, capacity and its international strategy are attractive qualities, while noting Cronos stock is richly valued relative to its cannabis equity peer group.Contributing to the debate on Cronos stock, Stifel analyst Andrew Carter recently initiated coverage of the name with a "tepid" hold rating. However, Carter notes a sector-wide pullback could enable financially sturdy marijuana companies, including Cronos, to possibly scoop up some rivals at discounted valuations.Cronos has $1.8 billion in cash, one of the more impressive cash hoards in the legalized marijuana industry and one that really stands out when considering the company's market capitalization is just over $3 billion. That $1.8 billion is the sum tobacco giant Altria Group (NYSE:MO) previously invested in Cronos, and Altria CEO Howard Willard has been open about his company making that investment in Cronos to help medicinal marijuana firm make the moves it needs to make to bolster market share. Bottom Line on Cronos Stock: Looking South of the BorderCronos is a Canadian company and while recreational marijuana is legal across that entire country, the real opportunity for the company may lie south of the border in the U.S., where the company is looking to enter the fast-growing cannabidiol (CBD) market.CBD is the most popular cannabis-based derivative.Currently, much of the enthusiasm for CBD revolves around hope and speculation. Supporters believe it can be elixir for various medical ailments and other uses, but there is not much in the way of empirical scientific evidence to support those claims. The good news for Cronos stock, assuming the company can effectively execute a foray into the U.S. market, is that the segment is expected to deliver exponential growth.A recent study by BDS Analytics and Arcview Market Research says the U.S. CBD market could swell to $20 billion by 2024."In fact, BDS Analytics is predicting an compound annual growth rate of 49 percent by 2024 across all distribution channels," reports Forbes. "Also, they expect that the CBD market, combined with THC products, will create a total market of $45 billion for cannabinoids by 2014." * 7 High-Quality Cheap Stocks to Buy With $10 Bolstering the long-term case for Cronos stock are the various distribution channels for CBD, many of which are mainstream. The ride will include some volatility -- that is just the name of the game with cannabis stocks -- but Cronos stock is a compelling long-term idea if management executes the CBD opportunity the right way.As of this writing, Todd Shriber did not own any of the aforementioned securities.Compare Brokers The post Cronos Stock Could Be Worth the Bumpy Ride appeared first on InvestorPlace.
While earnings season is all but over for most stocks, for the cannabis business, it's only beginning. On June 20, Canopy Growth (NYSE:CGC) will kick off a spate of quarterly reports from the industry, forcing owners of CGC to serve as proverbial guinea pigs.Source: Shutterstock "Because it's the biggest, there'll be a follow-the-leader type action, so a strong result will lift all boats," explained Korey Bauer, the portfolio manager of the Cannabis Growth Fund (CANNX). He went on to say: "Investors will be looking closely at price and margins as everyone adjusts their numbers based on what the big companies are doing." * 7 Dark Horse Stocks Winning the Race in 2019 Marijuana mania is still alive and well, and the owners of marijuana stocks are capable of putting a positive spin on clearly disappointing news. But as the realities of legalized cannabis, both good and bad, set in, investors are slowly but surely beginning to treat these organizations like companies that will sooner or later have to turn a profit.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, the top and bottom lines are arguably the least important data nuggets for the owners of CGC stock. Other metrics are going to be much more telling indicators of how healthy Canopy Growth is becoming. Canopy Growth's Earnings OutlookThe initial and overarching response to next week's Q4 and full-year results, of course, will be driven by the company's sales and income levels.As of the latest look, analysts are, on average, calling for revenue of $90.9 million (in Canadian dollars), up from the year-ago figure of $22.8 million. As far as earnings, analysts, on average, believe Canopy Growth is on pace to report a loss of 23 cents per share of CGC stock, narrowing the year-ago operating loss of 31 cents per share.The heroic growth is entirely due to timing.Canada legalized marijuana for recreational use in October of last year, jump-starting strong sales for several organizations that had long been prepping for that day. As a result, the year-over-year revenue jumps will look artificially impressive until after October 2019.That said, sequential progress still counts. Canopy Growth generated sales of $83 million in Q3, with the bulk of the 256% boost coming from surging sales of recreational cannabis, which now makes up more than two-thirds of the company's revenue. Canopy Growth lost 22 cents per share in Q3. 3 Things to WatchWhile a large number of investors will certainly be eyeing CGC's sales and profits, most of the so-called smart money will be looking at the less-touted data that may more directly foreshadow the company's future. Three numbers will mean more than any others.1.Average Selling PriceSince Q3 was Canopy Growth's first as a seller of recreational marijuana, the year-over-year comparison won't be too telling. But the company was able to sell recreational marijuana at a price of $6.96 per gram.To its credit, per-gram prices for its medicinal cannabis were up year-over-year. With marketwide prices still falling as cannabis becomes more commoditized, however, price matters.2.Production CapacityIn Q3, Canopy Growth had access to 5.6 million square feet worth of growing capacity. Full use of that square footage could translate into output of more than 500,000 kilograms of cannabis per year. That would make CGC Canada's second-biggest grower,Investors may want to listen carefully to any updates on or changes to that number.3.Operating ExpensesFinally, while investors have yet to balk at CGC's spending, the slow realization that cannabis is a commodity has at least put some focus on its spending habits. During the upcoming earnings report, the owners of CGC stock could question, for the first time, whether all of the company's operating expenditures are absolutely "worth it."On that note, while revenue nearly quadrupled in Q3, sales and marketing expenses more than quadrupled, while general and administrative spending soared 400%.There's still a chance Canopy can cost-effectively scale up, but it certainly hasn't yet. Its operating expenses don't include the cost of acquisitions. Other Upcoming Cannabis ReportsThough Canopy Growth has some major news coming up, the owners of CGC stock aren't the only investors on pins and needles. Hexo (NYSEAMERICAN:HEXO) is also expected to post its quarterly numbers later this month.Some time will pass before the next big cannabis earnings report, though. Aphria (NYSE:APHA) could post its results sometime in July, as could OrganiGram Holdings (NASDAQ:OGI), given the timing of its previous quarterly reports. The same criteria increasingly being used to judge Canopy Growth will also be used to judge other cannabis companiesAs of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post 3 Things to Scrutinize in Canopy Growth's Earnings Report appeared first on InvestorPlace.
Despite the market's hearty rally last week wasn't a good one for Aurora Cannabis (NYSE:ACB) because Aurora stock is stuck in a technical downtrend.Source: Shutterstock Even as a number of stocks in the cannabis industry were bouncing higher as well, the recent underperformance vs. the overall market has investors wondering if Aurora is set to breakout or breakdown.Late last week, Stifel analysts initiated Aurora Cannabis stock with less-than-enthusiastic coverage. They slapped a hold rating and a C$10 price target on ACB ($7.47 USD). From current levels, that implies a slight downside but not much. At the very least, some investors may read that as a positive note. After all, it could have been a sell rating with a target that implied a big downside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dark Horse Stocks Winning the Race in 2019 Still, it doesn't paint the most optimistic picture. The analysts argue that Aurora's "international medical-use growth opportunities are limited outside of Canada and Germany." They remain cautious as ACB due to execution concerns and the company's "lack of definitive strategy."So what do the charts say? Trading ACB Stock Click to EnlargeShares of Aurora stock are stuck in a tough downtrend (blue lines), with channel resistance squeezing it lower. Last month the 20-day and 50-day moving averages began acting as resistance, while Aurora is flirting with losing its 200-day moving average as well.Once ACB stock lost the $8.25 to $8.50 area last month, more selling pressure took hold. This area was resistance from October through March, but after turning to support it looked as if it would buoy the name going forward. Keep in mind, Aurora had just about doubled from the start of the year through mid-March.So what now?I'm watching a few key areas in the short term, starting with the 200-day. If this area turns from Q1 support to Q2 resistance, there will most likely be more downside to Aurora Cannabis stock. If ACB can reclaim this level, it will set up an important test with resistance. The only problem? Resistance sits between $8.10 and $8.60 and is trending lower. That's where investors will find the 20-day and 50-day moving averages, as well as channel resistance.Below the 200-day, and the 61.8% retracement at $7.29 will be an almost immediate focus. If it fails as to boost Aurora Cannabis, channel support will soon be called upon near $7.So is a breakout or breakdown coming for ACB stock? Until we first see how it handles some of these key levels, we won't have our answer, unfortunately. However, breaking out of this channel can trigger a big move in either direction. For that reason, these are must-watch zones for Aurora stock investors. Until they give way, ACB can remain channel bound. Bottom Line on Aurora StockI consider the cannabis space industry very interesting. On the one hand, it's moving impressively fast with regulation, public acceptance and corporate revenue. That's not to say there won't be bumps in the road, only that it's moving very quickly in the right direction. That said, despite this explosive growth, it's very much a long-term play. That's because the valuations are pretty large already.Take Aurora Cannabis for instance.ACB stock commands a market cap of almost $8 billion, while full-year estimates for fiscal 2019 revenue stand just under $200 million. That leaves Aurora trading at 40 times this year's revenue. Although on the more bullish side, estimates also call for $500 million in sales next year. That's a more palatable 16 times current sales but would also assume that the stock price stays flat over the next 12 months.So in a way, Stifel's coverage makes sense. The stock has upside provided a few things continue to play out. More states and countries need to continue down the regulatory approval path, while Aurora stock needs to execute on its opportunities. Lastly, it needs to show a path to profitability, while continuing its stunning revenue growth over the next few years.That really goes for more companies besides Aurora stock too. Almost all cannabis plays need to. That includes Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aphria (NYSE:APHA), Cronos Group (NYSE:CRON), New Age Beverages (NASDAQ:NBEV) and others. Let's see if they can deliver.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 * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post Here's What Needs to Happen for Aurora Stock to Break Out appeared first on InvestorPlace.
When it comes to the Canadian cannabis world, there are four big pot stocks that tend to hog the spotlight. That Big 4 includes Canopy Growth (NYSE:CGC), Aurora (NYSE:ACB), Tilray (NASDAQ:TLRY) and Cronos (NASDAQ:CRON). But those aren't the only four pot stocks playing in the Canadian cannabis market. Indeed, there are a handful of other pot stocks which, for various reasons, aren't followed as closely by Wall Street.Source: Shutterstock One such under-the-radar pot stock is Aphria (NYSE:APHA). For all intents and purposes, Aphria is just like Canopy, Aurora, Tilray and Cronos. The company is a Canadian cannabis producer which sells thousands of kilograms of cannabis into the legal Canadian market every quarter, and is looking to expand its reach into other countries, including the U.S. But, relative to the Big 4, APHA stock has a tiny market cap and is much, much cheaper on a fundamental basis.Does that mean APHA stock is the best pot stock to buy?InvestorPlace - Stock Market News, Stock Advice & Trading TipsNo. Far from it. Instead, Aphria stock is understandably smaller and cheaper than its peers. This company has a relatively small cannabis business. That cannabis business has reported tumultuous and shaky results over the past several months. The optics and news flow surrounding the company have been confusing, at best, and very worrisome, at worst. There's no big money investment. Nor is the balance sheet all that loaded up.In other words, there really isn't anything special about Aphria. Instead, there are few things which warrant concern.As a result, while APHA stock is cheaper than its peers, it is cheaper for a reason -- and that means investors are probably best served to wait on the sidelines until more clarity and stability are injected into this company's narrative and fundamentals. Cheapness Explained By Red FlagsOn its face, Aphria stock is considerably cheaper than any of the Big 4 pot stocks. * 7 Stocks to Buy As They Hit 52-Week Lows Canopy is the biggest player in this market, selling over 10,000 kilograms of cannabis last quarter. Aurora slots in at number two, with just under 10,000 kilograms of cannabis sold last quarter. Meanwhile, Tilray sold about 3,000 kilograms of cannabis. Aphria sold around 2,600 kilograms of cannabis. And Cronos is the smallest in this group, with just over 1,000 kilograms of cannabis sold last quarter.Given how much bigger they are, Canopy and Aurora reasonably have much larger market caps than Aphria. But, despite Aphria having a similarly sized cannabis business as Tilray and Cronos, APHA stock has a significantly lower market cap. TLRY stock has a $3.5 billion market cap. CRON stock is up above $5 billion. APHA stock is down near $1.5 billion.Indeed, on a market cap per kilogram of cannabis sold last quarter basis, Aphria stock is much cheaper than its peers. The median valuation across the Big 4? Roughly $1.3 million in market cap per kilogram of cannabis sold last quarter. Aphria stock's market cap per kilogram of cannabis sold last quarter? Below $650,000.But, this cheapness in APHA stock is easily explained by the company's tumultuous fundamentals and narrative.First, and foremost, Aphria's cannabis business actually declined in terms of both quarter-over-quarter revenue and volume last quarter, due to supply shortages. Second, there have been some notable C-suite departures which have created confusing turnover at the head of the company. Third, there was a hostile takeover offer that didn't pan out… and was very odd from the onset. Fourth, this company hasn't attracted any big-money interest or offers, despite its cheap valuation.Net net, there are reasons why APHA stock is cheaper than its peers, and those reasons should keep investors sidelined for the time being. No Need to Buy Aphria Stock YetMaybe the current cheapness in Aphria stock isn't warranted in the long run. Maybe the cannabis business will stabilize, all the external noise will pass, and the stock will roar higher.All this could happen. But, if it does happen, it will take several months to play out -- meaning there's no reason to buy in just yet while the story is still troubled.The first thing that needs to happen here is the cannabis business needs to stabilize. Next quarter's numbers need to represent growth from this quarter's numbers. Until that happens, investors likely won't buy in.The second thing that needs to happen is all the optical noise needs to pass. The C-suite needs to see some stabilization. Attacks against the company's credentials need to stop. The hangover from the hostile takeover bid needs to pass. * 10 Stocks to Buy That Could Be Takeover Targets If all that happens, then APHA stock will rally in a big way from here. But, until then, this stock will remain understandably cheaper than peers. Bottom Line on APHA StockPot stocks are inherently volatile, and APHA stock is volatile even for a pot stock. This volatility in the stock is the result of volatility in the company's fundamentals and narrative. So long as this fundamental and narrative volatility persists, investors will remain hesitant to buy into APHA.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 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Aphria Is an Understandably Cheap Pot Stock appeared first on InvestorPlace.
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After the fluctuations of marijuana stocks over the last year, Aphria (NYSE:APHA) stock still trades more than 50% below its 52-week high. Investors sold off Aphria stock, as many questioned whether APHA was a "shell game"after it bought assets in Latin America.However, the executives who drove that purchase have left Aphria. The company has now hired a well-regarded executive as its interim CEO. Due to its current multiple and improved strategic decision-making, Aphria stock could move much higher as the company's reputation improves. * 10 Stocks to Buy That Could Be Takeover Targets Aphria Stock Became Cheap for a ReasonOne of the biggest draws of Aphria Inc over more prominent cannabis players involves its valuation. In a world in which many cannabis stocks have price-sales ratios in the triple digits, Aphria supports a much more reasonable forward price-earnings (PE) ratio of about 21.7.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut Aphria stock trades at a massive discount to its peers for a good reason. As recently as September, APHA had come close to $17 per share. However, most marijuana stocks sold off after Canada legalized cannabis. Aphria Inc dropped further when Hindenburg Research described it as a "shell game with a cannabis business on the side." Aphria stock fell briefly below $5 per share following Hindenburg's statement. After APHA briefly recovered, it dropped again, and it currently trades just above $6.60 per share. New Management Leaves APHA Well-Positioned for GrowthAs a result of the sharp decline of Aphria stock, founders Vic Neufeld and Cole Cacciavillani left the company. Now, former Hain Celestial (NASDAQ:HAIN) Irwin Simon heads Aphria Inc as the interim CEO.Under Simon, the company continues to focus on ramping up its production, to the point where it will be the third-highest cannabis behind only Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). Production at its Aphria One plant in Canada has now reached 115,000 kg . Upon completion of a new plant, that total could reach over 250,000 kg.Also, while Aphria Inc has divested from the U.S., it now operates in ten countries. In addition to its assets in Latin America, Aphria Inc has a meaningful presence in the large German market, as it has acquired the legal maximum of five cultivation licenses in Germany. APHA has become the only producer legally allowed to grow all three of the marijuana strains that have been approved by German regulators.During his time at Hain, Simon built a reputation for growing companies. Simon founded Hain and led it through most of its 26-year history. Today, Hain stock has a market cap of over $2 billion, and the company owns dozens of natural-product brands.However, Simon is 60 years old and was given the title of interim CEO. That creates uncertainty for Aphria stock, but it also provides the company with the chance to hire a new, top-notch CEO who can repair its reputation. Low Valuation and Potential Takeover TargetUnlike most of its peers, APHA earns a profit, and its trailing price-earnings ratio is only 22, which is quite low for a marijuana stock . Analysts, on average, predict its earnings per share will increase by 140% this year and 75% in fiscal 2020. Even if APHA was not selling cannabis, 21.7 would be a low PE ratio, given its growth. Also, since it operates in an industry with triple-digit price-sales ratios, the multiple of APHA stock can surge tremendously.Moreover, Aphria Inc's low valuation, production capacity, and strong presence in Germany make it a buyout target. Cannabis players may feel some pressure to try to buy APHA before the multiple of Aphria stock inevitably expands. This factor by itself may make taking a chance on Aphria stock worth the risk. Final Thoughts on Aphria StockIf APHA can restore its reputation, Aphria stock could rise tremendously. APHA trades at a steep discount to its peers, due to last year's allegations. However, it's also well-positioned to become one of the industry's top producers. Moreover, its position in Germany's market will bolster its earnings growth. If APHA's multiple expands to levels that are comparable to those of other cannabis stocks, the owners of Aphria stock will see huge gain, assuming another firm does not buy APHA first.As of this writing, Will Healy is long APHA stock. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 4 FANG Stocks Won't Be Bitten By Regulation Threats * 10 Stocks to Buy That Could Be Takeover Targets * 4 Big Bank Stocks Rebounding Compare Brokers The post Aphria Stock Could Deliver Massive Gains appeared first on InvestorPlace.
More American farmers are turning to hemp amid the low price of grain and the prolonged trade war between the United States and China. Yahoo Finance's Zack Guzman, Sibile Marcellus, and Heidi Chung discuss.