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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.
The Zacks Analyst Blog Highlights: Anheuser-Busch, Tilray, Boston Beer, Constellation Brands and Aphria
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
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.
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.
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.
Cannabis Countdown: Top 10 Marijuana Industry News Stories of the Week Welcome to the Cannabis Countdown . In this week’s rendition, we’ll recap and countdown the top 10 marijuana industry news stories ...
Watch the author's track record on TipRanksAphria (APHA) has had to battle itself out of a hole because of reputational issues coming from short-seller reports that suggested the company paid far too much for some of its foreign assets, along with deals that personally benefited some of its management at the time.One thing to take into account is a number of those in the financial media have been hammering the cannabis industry in general concerning whether or not they overpaid for some of their assets, so it's not something exclusive to Aphria, although it has had to endure the most visible and aggressive public attack in that regard.While there remains some overhang from the assertions, the company has been showing signs of rebounding after getting hammered after the news went public.According to interim CEO Irwin Simon, his major concern once taking over leadership wasn't the issues surrounding the negative reports, but rather how the company was operating in a disjointed way.He said this in early August in the Calgary Herald:> “There was not a strategic plan or vision. You had grow, marketing, sales, operations, Broken Coast (a licensed producer owned by Aphria) all in silos. So, you know, how do you pull all that together?”Although concerns over the value of its international assets remain, the last earnings report and accompanying guidance point to the company possibly being able to sustainably increase production and sales.While some believe guidance was too optimistic, if it is able to execute and meet its goals, it would be a huge boost to the value of the company.A key issue weighing on the companySomething that refuses to go away concerning Canadian-based companies is what their strategy is to enter the U.S. cannabis market. Those that provide visible plans, such as Canopy Growth and it buying the rights to acquire Acreage Holdings if the U.S. ever legalized pot at the Federal level.Other companies such as Aurora Cannabis have also been hit hard by the perception a company needs to reveal a U.S. strategy in order to command a premium price.Aphria has to deal with the same issue, as it focuses primarily on the Canadian market and building out an international business. I tend to think the major reason it isn't getting more interest from investors, beyond the short-seller reports, is its perceived lack of having a plan to compete in the giant U.S. cannabis market.What's interesting about that, now that Canopy Growth has faltered even with its U.S. entry plan known, some investors no longer appear to care about Aphria's strategy for the U.S.The point there is there is some schizophrenia in the market concerning this because of the double standard in regard to Canopy Growth and many of its peers. For Canopy Growth it was considered a major catalyst until it plummeted in value. Now with Aphria, some financial writers aren't even talking about it because they've apparently transferred their optimism from Canopy Growth to Aphria, are aren't including an American entry plan as important.I'm actually in agreement with that, but because of the emphasis on the U.S. market with Canopy, it looks like Aphria, at least in part, isn't getting the boost to its share price it could be getting based upon its current performance.Aphria has what many in the market are looking forFor some time I've stated that revenue was going to be the major catalyst driving the cannabis industry, and I retain that belief. That said, the market is increasingly looking for the combination of sales growth and a clear path to profitability, or as in the case of Aphria, current profitability.In the fourth quarter Aphria reported $15.8 million net income and adjusted EBITDA of $1.9 million.While the company increased its recreational sales, it didn't experience the lower costs associated with adult-usage pot, as it was able to increase its average selling price from $5.14 in the third quarter to $5.73 in the fourth quarter. At the same time it was doing that it managed to slash costs per gram from $2.85 in the third quarter to $2.35 in the fourth quarter.It also closed a $335 million-plus convertible note offering in the fourth quarter at a 5.25 percent rate, bringing the total amount of cash on its books to $571 million.That provides the company with flexibility and the ability to scale domestically and internationally.It'll also help it achieve the goal of producing up to 255,000 kilograms annually.ConclusionAphria went through a tough period because of uncertainty concerning the value of its assets and behavior of some of its management. When that was happening the cannabis market in general started to take a beating because of concerns over an economic slowdown, and what the fallout from the trade wars would be.Investors sought out safe havens at that point, which the volatile and more risky cannabis sector didn't represent.It'll be interesting to see how this plays out for Aphria, especially with the very optimistic guidance from the company, which some are somewhat dubious about.Since the company is trading at low multiples and has nowhere to go but up, if it does reach its guidance, the share price is going to soar. If not, I think it'll still do fairly well over the long term, but in the short term it'll go through more downward pressure.My thought is Aphria's management wouldn't never have guided so positively unless it believed it really could reach its numbers. And if they don't reach the numbers, how much the market punishes it will depend upon the severity of the miss.The bottom line to me is Aphria looks good for the long term, assuming it can execute on its strategy, and even if it doesn't present a plan to enter the U.S., it should be a solid performer on the top and bottom lines.See APHA's price targets and analyst ratings on TipRanksDisclosure: No position.
CALGARY , Sept. 6, 2019 /CNW/ - High Tide Inc. ("High Tide" or the "Company") (HITI.CN) (HITIF) (2LY.F), an Alberta -based, retail-focused cannabis corporation enhanced by the manufacturing and wholesale distribution of smoking accessories and cannabis lifestyle products, today announced that the Canna Cabana retail stores located in Unit #610 at 20 Crowfoot Crescent NW in Calgary and at 4806 50 Avenue in Vegreville (the "New Stores") both received their first deliveries of cannabis products from Alberta Gaming, Liquor and Cannabis ("AGLC") and has begun selling recreational cannabis for adult use. Grand opening festivities will be held at each of the New Stores on Saturday, September 7 .
TORONTO and LEAMINGTON, ON , Sept. 5, 2019 /CNW/ - Aphria Inc. ("Aphria") (TSX: APHA) (NYSE: APHA) and TruTrace Technologies Inc. (CSE:TTT) (OTCQB:TTTSF) ("TruTrace") today announced that Aphria has joined Phase 2 of the Shoppers Drug Mart ("Shoppers") medical cannabis verification pilot program (the "Pilot Program"). The blockchain-secured Pilot Program is specifically designed to increase transparency, interoperability and product identification within the medical cannabis industry.
LEAMINGTON, ON , Sept. 4, 2019 /PRNewswire/ - On August 1, 2019 , Aphria Inc. ("Aphria" or the "Company") ( TSX: APHA and NYSE: APHA ) filed its annual report for the fiscal year ended ...
As the cannabis industry grows, Martha Stewart recently announced the launch of CBD-infused products in a partnership with Canopy Growth (CGC).
Just three months ago, Seaport analyst Brett Hundley was rolling back price targets on Canadian cannabis stocks, cutting forecasts for both sales and EBITDA left and right -- and Hundley was right to do so. Since the analyst began slashing targets, shares of Aphria (APHA) and Hexo (HEXO) (two subjects of the analyst's ire in June) have fallen 10% and 35%, respectively. More broadly (and over a longer time horizon) the Horizons US Marijuana Index ETF has declined 39% from April to today -- against a broader S&P 500 performance that's been basically flat.And yet, there comes a day that marijuana stock prices get too cheap to ignore, and that day, apparently, was Labor Day 2019.Seaport Announces a Labor Day SaleIn a report just out entitled "Labor Day Sale", Hundley argues that after the sell-off, it's now "time to buy cannabis stocks" again. His reason:"Quality cannabis names" are trading at "2020 price-to-sales multiples near 3.0x-4.0x, alongside EV multiples of 7.5x-10.5x against 2020/21 EBITDA expectations." In the analyst's opinion, these valuations have been depressed for several good reasons, including "disappointing and frustrating regulatory developments, delayed profitability expectations, specific compliance/credibility issues, and founder/management upheaval."And yet, Hundley foresees a "potential for forward regulatory improvements/updates and widening access to capital" that could result in higher valuations going forward. And he further argues that "the [marijuana] space is profitable" already -- albeit only profitable from the perspective of "EBITDA," which considers earnings but not the interest, taxes, depreciation, and amortization that generally come along with (and subtract from) them.Given this continued absence of real profitability, though, are any of these stocks really bargains, even down 39% on average?3 'Quality Cannabis Names' to ConsiderHundley notes that the valuations on his alleged "quality cannabis names" look attractive when compared to "biotech/pharma" stocks trading "6.0x+ 2020 sales expectations and 15.0x-25.0x 2020/21 EBITDA expectations." But which ones exactly? Let's take a closer look.Canopy Growth (CGC) for example, probably the best-known Canadian cannabis stock (and certainly the most expensive at $8.9 billion in market capitalization), currently sells for 19 times the $467 million in sales it's expected to produce in 2020. Aurora Cannabis (ACB), the next-biggest player in the industry at $5.9 billion in market cap, costs more than 11 times the $516 million in sales that analysts project for it in 2020. And Cronos Group (CRON), No. 3 in the industry at $3.9 billion in market cap, costs a staggering 23.6 times forward sales!In fact, to get anywhere close to his promised "3.0x-4.0x" sales valuations, Hundley has to scrape pretty far down into the barrel, coming up with just one example from his own coverage list: Green Thumb Industries (GTBIF), which he says at $1.6 billion in market cap costs 3x fiscal 2020 projected sales. Granted, the analyst says there are other names down in that barrel as well, if you're willing to look for them -- Cresco (CRLBF) for one, and Trulieve (TCNNF) for another.But if these are the kind of "quality cannabis names" Hundley is urging investors to look for, it bears asking: If they're so great, why hasn't he bothered to cover Cresco and Trulieve before?The answer could be as simple as this: Because they aren't.Visit TipRanks’ Trending Stocks page, and find out what companies Wall Street’s top analysts are looking at now.
Cowen’s Vivien Azer came out with her top picks for new coverage of U.S. cannabis companies, and she is starting Green Thumb Industries at an outperform rating. Yahoo Finance's Zack Guzman and Heidi Chung are joined by Vera Gibbons, NonPoliticalNews.com Founder, to discuss.