|Bid||4.1900 x 28000|
|Ask||4.2000 x 21500|
|Day's Range||4.1800 - 4.2800|
|52 Week Range||3.7600 - 10.6800|
|Beta (5Y Monthly)||2.98|
|PE Ratio (TTM)||14.06|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
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.
/R E P E A T -- High Tide Announces Agreement to Sell KushBar Assets to Halo Labs for $12 Million/
As the vast majority of marijuana stocks have tumbled over the last 11 months, even most bulls have given up on many of the names, including Hexo (NYSE:HEXO), Tilray (NASDAQ:TLRY), and Aurora Cannabis (NYSE:ACB). But the bulls have still been extremely upbeat on Aphria (NYSE:APHA), but it's hard to say why people still like Aphria stock.They tout the company's high exposure to markets outside of Canada, its high production capacity, its large cash reserves, and the strong experience of its CEO, Irwin Simon, who founded successful organic food maker Hain Celestial (NASDAQ:HAIN) and served as its CEO for many years.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMost of all, the bulls love the fact that Aphria, unlike any of its peers, managed to eke out a small quarterly profit, Actually, it managed to eke out two consecutive quarters of small quarterly profits in 2019.But the company's fiscal second-quarter results and guidance, reported on Jan. 14, were not nearly as impressive. They indicate that, despite Aphria's many advantages, its profitability is waning while its growth isn't that impressive in light of its high valuation. Investors appear to recognize that reality, as Aphria stock has lost 19% of its value in the last month and is down nearly 35% over the last year. Analyzing Aphria's ResultsIn the company's fiscal second-quarter (which ended in November) its net revenue fell to CAD$120.6 million from CAD$126.1 million in Q1. * 20 Stocks to Buy From the Law of Accelerating Returns Moreover, Aphria's distribution revenue dropped to CAD$86.4 million from CAD$95.3 million, and the company's bottom line swung to a loss of CAD$7.9 million in Q2, versus a profit of CAD$16.4 million in Q1. Even more discouragingly, Aphria's gross profit dropped toCAD$ 39.589 million in Q2 from CAD$45.42 million in Q1.The gross profit decline suggests that falling demand and/or lower prices, not increased spending on items like R&D or marketing, caused the quarter-over-quarter decline of the company's bottom line.Spending more money on R&D, sales, and marketing can boost companies' results over the longer run. Moreover, companies that are benefiting from high revenue and gross profit increases can raise their spending on R&D, sales, and marketing and still raise their bottom-line profits.But when demand for a company's products is dropping or its average prices are falling, causing its gross profit to decline, it will have a very hard time increasing its bottom line. As a result, Aphria probably won't report another quarterly bottom-line profit for some time.Given Aphria's lackluster Q2 results, it's not surprising that its 2020 guidance was not very impressive. The midpoint of the company's 2020 revenue guidance range was CAD$600 million, down from CAD$675 million in October. And its revenue in the first half of its fiscal year was CAD$246 million.So it now expects its revenue in the second half of the year to be CAD$354 million, or 44% above its first-half total. With Aphria stock still trading at a very high price-sales ratio of nine, a 44% increase isn't very impressive. The Implications of Aphria's GuidanceThe company's guidance suggests that the exponential jump in cannabis companies' financial results that bulls had expected to see from the legalization of cannabis-infused food and drinks in Canada isn't going to materialize in the first half of calendar 2020.Additionally, the reduction of its revenue guidance indicates that it doesn't expect the opening of more stores in Ontario to help its business as much as marijuana stock bulls had hoped. The Bottom Line on Aphria StockThe decline of Aphria's gross profits last quarter indicates that demand for its products is weakening and that its profitability is likely to fall for the foreseeable future. Moreover, its revenue guidance suggests that its shares are overvalued and that the positive catalysts which have been touted by bulls aren't as strong as they think.As I explained in my recent column about Aurora Cannabis, I believe that companies that are providing cannabis to the general public have two fundamental problems.First, cannabis remains socially unacceptable in many situations, making those who believe in following society's rules and norms unlikely to use it much, if at all.Second, most of those who are less compliant with rules and norms will buy cannabis from unauthorized dealers who sell it much more cheaply than legal stores and dispensaries. Aphria's results and guidance indicate that the same situation exists in countries other than Canada.As of this writing, the author did not own shares of any of the aforementioned companies. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 20 Stocks to Buy From the Law of Accelerating Returns * 10 Strong Lottery Ticket Stocks That Could Soar in 2020 * 7 U.S. Stocks to Buy on Coronavirus Weakness The post Aphria Stock Isn't Profitable Enough to Be Worth the Risk appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) stock remains one of my top picks as a long-term winner in the cannabis space. But in the short term, Canopy and other cannabis stocks continue to struggle.Source: Shutterstock That's not terribly surprising. Recent fears of the coronavirus from China have rattled the markets. Before that, a slower-than-expected rollout of recreational products in Canada led to disappointing growth -- and a massive selloff in cannabis names.But even the recent volatility provides an opportunity. As regular readers of my Cannabis Cash Weekly know, we've been selling covered calls on CGC stock and other cannabis plays. Higher volatility means higher premiums -- and higher returns.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNimble trading can create opportunities in almost any environment. With Canopy Growth earnings due on Friday morning, investors need to stay on their toes. Two Big Days for Cannabis StocksSince stabilizing in November, cannabis stocks have tried to rally. I use the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) as a proxy for the sector. After bouncing in January, that exchange-traded fund once again is testing short-term support:Source: Provided by Finviz The ETF actually sits a few pennies below November lows. That's not enough to predict another leg down for the sector -- yet. But certainly sentiment toward the sector remains bearish. * 7 U.S. Stocks to Buy on Coronavirus Weakness Two industry leaders have a chance to reverse that sentiment this week. Aurora Cannabis (NYSE:ACB) reports earnings on Thursday morning, and Canopy the following day.It remains to be seen whether the two companies finally can drive optimism toward the sector. "Cannabis 2.0" products in Canada represent a significant growth opportunity, and should contribute modestly to fourth-quarter results. Earnings reports last month from Aphria (NYSE:APHA) and OrganiGram (NASDAQ:OGI) led the sector to bounce. There's hope for a repeat this week and next.But there are reasons for caution as well. Aurora has laid off workers. Canopy announced that its cannabis-infused beverages would be late to market. Neither move suggests blowout earnings are on the way. And so investors waiting for a big rally in cannabis names may have to wait a little longer. The Long-Term Case for CGC StockOf course, that's not a bad thing. My longer-term outlook toward cannabis is extremely bullish. But investors need to pay attention to short-term factors as well -- and capitalize on them.So we've looked to sell covered calls on CGC stock. The strategy results in either positive short-term gains if the stocks are called away, or a reduced cost basis if they're not.Covered calls allow investors to play the short-term trading we've seen in recent months while maintaining flexibility toward the long-term opportunity. And from a long-term standpoint, Canopy Growth remains the stock to own.The multi-billion dollar investment from Constellation Brands (NYSE:STZ, NYSE:STZ.B) gives Canopy a sizable war chest. It's also allowed Canopy to develop a vertically integrated model that spans everything from production to retail.Brands like Tweed and Tokyo Smoke will drive consumer sales with higher profit margins. Spectrum Therapeutics offers exposure to worldwide growth in medicinal marijuana.Simply put, Canopy Growth is the industry leader in an industry that will, over the long term, grow exponentially. Investors can't ask for anything more.Matthew McCall left Wall Street to actually help investors -- by getting them into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 U.S. Stocks to Buy on Coronavirus Weakness * 7 Smart Blue-Chip Stocks to Buy Now * 7 Low-Volatility Stocks to Buy In Jittery Times The post Canopy Growth Stock Remains a Long-Term Buy Ahead of Earnings appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) stock has not done well in recent months and on Thursday after the market closed, things got even worse. Aurora stock fell 5.6% on the day and plunged further in after-hours trading on news that its CEO, Terry Booth, would step down.Source: Shutterstock The company also announced a "business transformation plan," which includes axing almost 20% of its workforce. It will also take an impairment charge of between 190 million CAD to 225 million CAD, and a writedown of between 740 million CAD and 775 million CAD.Making a bad day even worse, it announced its preliminary second-quarter results. Aurora expects revenue between 62 million CAD and 66 million CAD, below last quarter's 70.8 million CAD and well below analysts' average estimate of 78.8 million CAD.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's a lot of information to absorb, but it's no wonder Aurora stock is diving on the news. Unfortunately for ACB and other cannabis companies, the stock's price action comes as little surprise. Diving DeeperMarijuana stocks are quite speculative. In coming years, the sector will have big opportunities, but not every company will survive long enough to benefit from them. That's why I decided which marijuana stock to invest in based on financials and technicals. In my view, Aurora stock's outlook wasn't positive on either front. * When I'd Be Looking to Sell Tesla Stock Instead, I preferred Aphria (NYSE:APHA) and Canopy Growth (NYSE:CGC). Cronos Group (NYSE:CRON) has some positive attributes, too. In a Dec. 30 column, I contended that Aurora stock had no fight left, and its shares subsequently fell to $1.50. In a Jan. 14 column, I again advised investors to avoid ACB, even though its shares were near their lows at the time.While the stock did subsequently rebound, it's now back below $2 again. I can't stress this enough: Cannabis is already a speculative arena, so investors must fish for the highest-quality marijuana stocks they can find. Opportunities and RisksDr. Andrew Schnackenberg, PhD, professor of management at the Daniels College of Business, was asked what changes in marijuana laws should be on American investors' radar in 2020.He responded to InvestorPlace via email by saying, "Perhaps the biggest market for recreational use that has the potential to open up in 2020 is New York (and to a lesser extent, New Jersey). Investors should also strongly consider the headwinds being created for cannabis companies that are spilling over from emerging health risks associated with vaping."Another quote, this one from Aurora's management, also highlights the sector's potential opportunities and risks: "We believe that the long-term opportunity for Aurora remains very compelling, despite a slower than anticipated rate of industry growth in the near-term."The news from Aurora will likely weigh on its peers. That's why if I will invest in this space at all, it will be in marijuana stocks with the best chance of success down to the road. Trading Aurora Stock Click to Enlarge Source: Chart courtesy of StockCharts.comAurora stock has been under tremendous pressure and as a result, the stock has numerous downtrend resistance marks. Its most recent such level (depicted by the blue line) began in September and helped squeeze shares down to a low of $1.50. However, in mid-January, ACB was able to climb higher, breaking out over its downtrend resistance and reclaiming the 20-day moving average.The shares were even able to form a short-term uptrend mark (depicted by the purple line). That said, the 50-day moving average continued to act as resistance, and with Aurora stock tumbling today, the $1.50 low will now be in sight.If Aurora stock can absorb such bad news and avoid breaking below $1.50 for a meaningful amount of time, then it may indeed be ripe for a rally. I am not bullish on Aurora stock, but I will not ignore the shares' technicals. And just because the stock is in rough shape does not mean it can't have rallies.If $1.50 holds as support, investors will have to start thinking about potential gains back to the 50-day moving average. However, if the shares drop below $1.50,, $1 could be on the table.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long APHA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Utility Stocks to Buy That Offer Juicy Dividends * 10 Gold and Silver Stocks to Profit Off 2020's Fear Trade * 3 Top Companies That Should Be More Careful With Your Data The post Itas No Surprise Aurora Cannabis Stock Is Near Its All-Time Lows appeared first on InvestorPlace.
Newer traders might not remember a time when cannabis stocks were few and far between and volumes were thin. Today, it's much easier to find popular marijuana stocks to trade and perhaps you've seen the explosive price moves to the upside -- along with the painful moves to the downside.Source: Shutterstock Many cannabis stocks have struggled lately, but the prospect of legalization in America and abroad continues to draw newcomers into the pot-stock trade. Still, the legalization issue remains complex; in an e-mail to InvestorPlace, Andrew Schnackenberg, professor of management at the University of Denver Daniels College of Business, notes that there are no easy answers surrounding the "when" and the "where" of cannabis decriminalization:"This is a very difficult question to answer from a systematic scholarly perspective, as the laws are in a perpetual state of flux within many states and municipalities. Perhaps the biggest market for recreational use that has the potential to open up in 2020 is New York (and to a lesser extent, New Jersey). Investors should also strongly consider the headwinds being created for cannabis companies that are spilling over from emerging health risks associated with vaping."InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Utility Stocks to Buy That Offer Juicy Dividends If you're prepared to accept those headwinds, then the following selection of cannabis stocks could be ripe for the picking. I've chosen these three personal favorites because they have something -- financial or otherwise -- that puts them in a position to flourish regardless of whether decriminalization moves forward or not in 2020; in the final analysis, great companies can succeed even in the most challenging of regulatory environments. Cannabis Stocks to Buy: Aphria (APHA)Like the majority of cannabis contenders, Aphria (NYSE:APHA) stock has floundered since the summer of last year under the vaping controversy and the disappointment of Cannabis 2.0 (a catchall term for the commencement of Canadian sales of cannabis edibles, topicals, and vape products).These are industry-wide issues, but Aphria has what many cannabis companies don't: positive cash flow. With 600 million CAD on its balance sheet and just 490 million CAD in outstanding debt, Aphria is net positive -- and a recent 100 million CAD cash infusion from a "mystery investor" certainly doesn't hurt, either.Not only that, but Aphria recently secured highly coveted GMP status in the European Union. This will allow the company to sell marijuana for medical purposes to pharmacies in cannabis-friendly and heavily populated countries like Germany. So if America drags its feet on legalization, the impact won't be as bad for Aphria. Tilray (TLRY)Source: Jarretera / Shutterstock.com As I've been known to do, I'm going to take a strictly contrarian position here in recommending Tilray (NASDAQ:TLRY) stock. I'll be the first to admit that the share price went up too much in 2018 and wasn't meant to be trading at $200, but I see it as an overreaction for the market to push it below $20 as there's nothing so horrendous about this company that warrants such a downdraft.Even the layoff of 10% of Tilray's workforce, which many traders view as a sign of trouble, is a positive in my book. In fact, I would assert that more marijuana companies ought to consider similar cost-cutting measures: to quote Tilray's CEO, Brendan Kennedy, "By reducing headcount and cost, Tilray will be better positioned to achieve profitability and be one of the clear winners in the cannabis industry, which will drive value for our investor and employee shareholders." * 7 Utility Stocks to Buy That Offer Juicy Dividends Kennedy added, "Tilray restructured its global organization to meet the needs of the current industry environment and for continued growth in 2020 and beyond." While I feel bad for those who lost their jobs, I respect the CEO's willingness to reduce expenditures when times get tough for the cannabis market -- remember, Tilray can always hire again when the market improves. Canopy Growth (CGC)Source: Jarretera / Shutterstock.com I saved the best for last as the (comparatively) old standby, Canopy Growth (NYSE:CGC) stock, ought to be big enough to withstand any set of cannabis-market conditions. While it is true that governments in Quebec and Alberta have banned vape sales, Canopy CEO Mark Zekulin prepared for such hurdles back in September, saying, "I think the key part for us is to focus on the Canadian model… [W]e should be looking to where there's regulations, there's systems in place."The proof will be in the pudding, though (not necessarily cannabis-infused pudding, though I have seen it sold somewhere) as Canopy will report its earnings for 2020's fiscal third quarter on Valentine's Day. This event is highly anticipated as analysts collectively predict that Canopy will reveal a reduction in GAAP losses per diluted share - a key metric indicating, hopefully, a more positive-leaning cash flow.The analyst community is also expecting an increase in Canopy's quarterly revenues, something that hasn't occurred since the fiscal fourth quarter of 2019, as well as an 11% year-over-year revenue increase. I the current cannabis-market environment, any positive surprise could push stock prices much higher - and if any company can beat expectations and lead the way out of this bear market, I'd say it's the one and only Canopy Growth Corp.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Utility Stocks to Buy That Offer Juicy Dividends * 10 Gold and Silver Stocks to Profit Off 2020's Fear Trade * 3 Top Companies That Should Be More Careful With Your Data The post 3 Cannabis Stocks Ready to Break Away From the Crowd appeared first on InvestorPlace.
Tilray said it would focus on international medical cannabis, science and research, Canadian recreational use, and its Manitoba Harvest hemp foods. “The tough decision to eliminate roles has not been taken lightly,” Kennedy continued.
LEAMINGTON, ON , Jan. 31, 2020 /CNW/ - Aphria Inc. ("Aphria" or the "Company") (TSX: APHA and NYSE: APHA) today announced that it closed its previously announced strategic investment from an institutional investor (the "Significant Investor") for aggregate gross proceeds to the Company of C$100,000,001 (the "Offering"). Pursuant to the Offering, the Significant Investor has agreed to purchase 14,044,944 units of the Company at a price of C$7.12 per unit. Each unit is comprised of one common share of Aphria and one-half of one common share purchase warrant of Aphria.
Aphria (APHA) continues to make smart moves to position the company for catalysts ahead for the Canadian cannabis market. Government regulations continue to restrict the growth potential of the market, but the country is slowly opening the market up for several catalysts by midyear. The cannabis company opportunistically raising more cash should prove wise in a market where competitors will likely face liquidity crunches right as the market improves.Equity RaiseAphria was already in a strong capital position with one of the highest cash balances in the Canadian cannabis space. Investors were probably surprised to see the company raise more funds with some skepticism of the reasons.The company announced a deal with a strategic institutional investor to raise C$100 million by selling 14,044,944 units at C$7.12 per share. Each unit gives the investor one common share of Aphria and one-half of a warrant to purchase shares at C$9.26 per share.The stock price comes out to $5.46 with Aphria ending the prior day at $5.77. The stock is selling off on the news along with the general market weakness due to fears over the coronavirus in China.Aphria now has C$600 million in cash on the balance sheet. Only Canopy Growth and Cronos Group have larger cash balances in Canadian cannabis space after making large strategic deals prior to the market peak in 2019.Also worth noting, the company has C$490 million in debt outstanding so the net cash position is only C$110 million now. The current market valuation is ~$1.5 billion so the equity raise of $75 million comes out to an ~5% share dilution to improve the balance sheet.Poised For Market Share GainsThe big issue facing the Canadian LPs are the timing of 2020 catalysts. Aphria such announced vapes available for all of the provinces allowing their sales, but Ontario, Alberta and Quebec all have various restrictions that will reduce sales via a combination of restrictive regulations or a lack of retail stores.The strong cash balance sheet allows Aphria to aggressively use the new production from the Diamond One facility to grab market share. The new facility should have product on the market in March allowing for market share gains in the FQ4 quarter that ends in May.The real upside from all of these catalysts isn’t likely until the August quarter. Either way, analysts have quarterly revenues reaching C$160 million in the May and August quarters. These revenues targets are up from the C$121 million just reported for the November quarter.The company cut revenue targets for the year to a low of C$575 million while analysts now have estimates down below C$535 million for the year ending n May. The risk here is Aphria actually needing to cut estimates for the year again, but the company should now have the resources and the market opportunity with new Ontario stores hitting the market along with Cannabis 2.0 products to grow revenues sequentially.Wall Street's VerdictWall Street’s analysts are sanguine about this stock’s ability to gain going forward. Aphria's Strong Buy consensus rating is based on 4 Buys and 2 Holds. It doesn’t hurt that its $6.87 average price target puts the potential twelve-month rise at ~40%. (See Aphria stock analysis on TipRanks)TakeawayThe key investor takeaway is that Aphria has the cash position to survive and thrive the regulatory hurdles temporarily slowing cannabis sales in Canada. The current cash balance above C$600 million and the new Aphria Diamond facility provides the assets to take market share while competitors struggle with liquidity. The company has the financial flexibility to grow revenues going forward making the stock the best buy in the sector near $5.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
CALGARY , Jan. 28, 2020 /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, has acquired a 50% interest (the "Transaction") in the Canna Cabana store in Sudbury, Ontario (the "Sudbury Store") from Saturninus Partners (the "Partnership"), the holder of a cannabis retail store authorization issued in relation to the first lottery conducted by the Alcohol and Gaming Commission of Ontario (the "AGCO") on January 11, 2019 (the "First Lottery"). The Sudbury Store has a stable operating history with unaudited gross sales exceeding $6.4 million for the nine months since opening on April 20, 2019 , with gross margins of approximately 27%.
Cannabis Countdown: Top 10 Marijuana Stock News Stories of the Week Welcome to the Cannabis Countdown . In this week’s rendition, we’ll recap and countdown the top 10 marijuana stock news stories for ...
CALGARY , Jan. 27, 2020 /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, has completed the acquisition (the "Transaction") of the Canna Cabana retail cannabis store in Hamilton, Ontario (the "Hamilton Store"). The acquisition of the Hamilton Store, one of a limited number of premier cannabis retail stores operating in the province, marks the Company's first step towards acquiring its interest in all three current Canna Cabana locations across Ontario.
As the World Economic Forum unfolded in Davos, Switzerland, world leaders gathered to discuss, among other important topics, cannabis, its potential, its legalization, and the hurdles of such a process. ...
The most recent earnings report from Aphria (APHA) was underwhelming, as it continues to experience heavy losses. While its earnings were up, they still failed to meet already mild expectations.It's no secret cannabis companies based in Canada are going to continue to experience weak growth over the next couple of quarters. Even so, in the case of Aphria, if it is able to successfully execute in several segments, it could surprise to the upside throughout calendar 2020.Recreational potA potentially major catalyst for Aphria will be if it can continue to increase market share in Ontario, which is by far the largest market in Canada. It has managed to boost its share of recreational pot from 6 percent in fiscal 2018, to an impressive 14 percent as of this writing.For most Canadian companies, the commitment by Ontario authorities to increase the number of retail cannabis stores on a monthly basis should provide a resultant increase in revenue. If it manages to follow through on its promises, and Aphria can at least maintain its share, and possibly increase it, it will be a nice catalyst for the company.It needs to be understood that it's going to take time because of the gradual opening of new stores in the province. There should be at least 20 stores a month opened, starting at latest in April 2020.Its Riff and Good Supply brands are two of the more recognized recreational brands in Canada, and should continue to do well as legal demand for pot increases.DerivativesDerivatives could play a big part in the potential surprise performance of Aphria in 2020. The first thing to note is if the company does retain or grow recreational share, it should generate significantly more revenue because of higher prices. It also should result in wider margins and a decline in losses.Other potential surprises could come from a successful launch of infused beverages, and if Alberta and Quebec decide to remove existing bans on vapes. Of the two, I'm not as convinced about the market demand for infused beverages yet, and of course the bans must be removed for it to make a difference.These two aspects of derivatives need to be closely watched, but for now, they can't be counted on.GMP certificationThe company announced it has received GMP certification from EU, which will allow it to start shipping medical cannabis products to the trading bloc. The company stated it expects to start shipments to the EU by the latter part of May 2020.With Germany being the largest market in the EU, it's the most important. Expectations are that within a few years it could have as many as 1 million medical cannabis patients in the country. Combined with other EU markets, it represents a significant opportunity to sustainably increase revenue and earnings.Germany is also important because it has among the highest prices for medical cannabis, and also has insurance pay for between 60 and 70 percent of usage. That's expected to improve in the years ahead.Consensus VerdictWall Street anchor a bullish perspective on the cannabis player, as TipRanks analytics showcase APHA as a Buy. Based on 6 analysts polled in the last 3 months, 4 are bullish on Aphria stock, while 2 remain sidelined. The 12-month average price target stands tall at $6.89, marking a nearly 30% upside from where the stock is currently trading. (See Aphria stock analysis on TipRanks)ConclusionAlthough there are a lot of things that have to go right for Aphria for it to surprise to the upside in 2020, if it is able to successfully execute in Ontario, successfully introduce some derivative products in Canada, and catch some breaks in Alberta and Quebec, it is going to generate good returns for shareholders.At the least, what I want to see is how it continues to perform in Ontario specifically, as that presents the strongest short-term opportunity in Canada for Aphria and its competitors.The combination of recreational dry pot sales, along with a boost from higher-priced and wider margin derivatives, has the best chance of the company exceeding expectations.I don't expect this to happen in the first calendar half, but in the second half, if Ontario follows through on its promises, and it gets a decent boost from medical cannabis sales in the EU, it has a good chance of turning market sentiment in its favor.At this time it's hard to be too optimistic with Aphria because there are some things outside of its control. That said, those things, for the most part, will be resolved going forward, and as they improve, and if Aphria can execute as they improve it should start to enjoy solid growth and provide a visible path to sustainability.To find good ideas for cannabis stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Aphria Inc. (TSX:APHA) (NYSE: APHA) announced Friday it has agreed to receive a strategic investment from an institutional investor. Under the agreement, the investor will buy 14.04 million Aphria’s units with a price of CA$7.12 ($5.42) per unit for a total of CA$100 million in gross proceeds. Each unit consists of one Aphria’s common share and one-half of one common share purchase warrant of Aphria.
Canadian cannabis company Aphria Inc. said Friday it has entered an agreement to receive a C$100 million (76.2 million) investment from an unnamed institutional investor. The investor purchased 14 million units of the company priced at C$7.12 per unit, the company said in a statement. Each unit is comprised on one common share and one-half of one common share warrant, entitling the holder to purchase a share at a price of $9.26 for 24 months after the closing date. Proceeds of the deal will be used to finance international expansion, working capital and for general corporate purposes. U.S.-listed hares rose 3.8% premarket on the news, but are down 17% in the last 12 months, while the S&P 500 has gained 26%.
LEAMINGTON, ON , Jan. 24, 2020 /CNW/ - Aphria Inc. ("Aphria" or the "Company") (TSX: APHA and NYSE: APHA) today announced that it has entered into an agreement to accept a strategic investment from an institutional investor (the "Significant Investor"), pursuant to which the Significant Investor has agreed to purchase 14,044,944 units of the Company at a price of C$7.12 per unit (the "Offering Price") for aggregate gross proceeds to the Company of C$100,000,001 (the "Offering").
Canada-based marijuana producer Aphria (NYSE:APHA) has been rather volatile so far in the new year. When the company released its Q2 FY2020 (ended in November) results on Jan. 14, investors were not impressed and Aphria stock sold off about 8% initially to hit a recent low of $4.87.Source: Shutterstock In the second half of the month, Aphria stock has recovered and is now hovering around $5.5. Nonetheless, year-to-date, the shares are down about 20%.Now investors are wondering if Aphria can make a comeback in 2020 to see the 52-week high of 10.95 reached in early February 2019. Like many other cannabis stocks, Aphria faces various operational and market-related challenges. Therefore, I'd urge investors to do plenty of due diligence before committing new capital into the shares.InvestorPlace - Stock Market News, Stock Advice & Trading Tips APHA Stock's Q2 Earnings Raised EyebrowsIn Canada, Aphria has three subsidiaries, i.e., Aphria One, Aphria Diamond, and Broken Coast to produce marijuana. The company has also signed supply agreements with all provinces and the Yukon territory in Canada Cannabis.The group has three key target markets: * Canadian Consumer (i.e., retail recreational) * Canadian Medical * International MedicalOn Jan 14, in line with expectations, the company reported a per-share loss of -2 cents. However, revenue of $92.38 million was below the estimate of $99.43 million. Investors are understandably spooked by the fact that total revenue has been declining quarter after quarter. * Invest in America's Most Trusted Brands With These 7 Stocks to Buy Net loss was -$6.07 million; a year ago, the company had reported a net income of $41.95 million.Analysts were especially concerned when Aphria reduced its revenue forecast for fiscal 2020 substantially, mainly due to the slow rollout of retail stores in Ontario, Canada's largest province. Ontario is yet to approve dozens of retail store licenses. And the delay in approval impacting the top line for Aphria.Also, Aphria has had a revenue decline in Germany, where the government has changed the previously generous insurance reimbursement policy for patients of medical marijuana. Therefore, the operations of CC Pharma GmbH, Aphria's German subsidiary, have also been affected. Going forward, that low margin business is not likely to contribute much to APHA stock price.The quarterly results once again confirmed investors' understanding that in Canada, both APHA and peers need to gain market share in this increasingly saturated legal marijuana market. Bursting of the Cannabis BubbleStocks operating mainly in the legal marijuana industry in Canada have now been in a multi-year downtrend. This recent weakness in the industry corresponds with the longer-term trend of Aphria stock price. By early 2018, APHA shares saw an all-time high of $19.87.As anticipation built among investors while Canada legalized recreational marijuana in October 2018, pot companies became some of the hottest stocks to buy. Shareholders were euphoric.However, now, Aphria trades around $5.5. It is therefore only appropriate to ask where the stock price might go from here. There are important fundamental issues behind this underperformance.Cannabis is an agricultural commodity that is affected by demand and supply issues. Since legalization, the Canadian cannabis industry has experienced slower-than-expected growth.There is still a resilient black market that will not disappear any time soon. Analysts are not yet convinced that the recent legalization of cannabis derivatives and edibles will be enough to reduce the growing supply glut. Aphria's Q3 ends at the end of February. Therefore, actual numbers from the initial sales of derivatives and edibles may not come out until the next earnings expected in April.Pot production is also is capital-intensive, requiring these firms to make substantial initial and ongoing investments.Outside of Canada, there is no demand for recreational pot. In the U.S., cannabis is illegal at the federal level -- a fact that is not likely to change any time soon. Finally, medical cannabis sales worldwide are limited.2019 also saw many headlines on vaping-related illness both in Canada and the U.S. In terms of vaping products, there are different rules on sales as well as advertising across Canada. Nova Scotia has recently announced that as of April the province will be the first to ban flavored vaping products. The patchwork of regulations adversely affects Aphria and peers.These pot companies are fighting an uphill battle in an industry where there are various trials and tribulations. The Bottom Line on Aphria StockIn 2020, in general, I expect most marijuana stocks, including Aphria, to post "so-so" quarterly results. Although APHA share price has improved in the second half of January, I am not yet regarding it as the start of an up move to get excited about. There is not likely to be any new positivity within the cannabis sector in the near future.As the pot bubble is no more, investors will have to fully focus on fundamentals to spot an opportunity to invest in cannabis businesses at reasonable valuation levels. Shareholders have to pay attention to balance sheets, earnings, and visibility.However, unless the U.S. legalizes cannabis at the federal level, these stocks' fundamentals may not necessarily improve much. Thus relying on exports is not viable for Aphria or any other pot business.Therefore, I'd encourage investors to study the market realities and company specifics before buying in. The company will need a strong catalyst to make it attractive in the eyes of many long-term investors. Until then, the shares are likely to be highly volatile.On a final note, it is likely that the legal marijuana industry in Canada will start to consolidate. If Aphria were to become a takeover target, then the stock price could possibly see double-digits again. In early 2020, I'd keep APHA stock and the industry on my watch list.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks on the Move Thanks to the Davos World Economic Forum * Invest in America's Most Trusted Brands With These 7 Stocks to Buy * 7 Earnings Reports to Watch Next Week The post Without a Takeover, Aphria Stock Will Be Stuck in Single-Digits for a While appeared first on InvestorPlace.
Coronavirus, shmoronavirus. The market just doesn't care, with the S&P 500 hitting another new all-time high on Wednesday. That said, let's look at a few top stock trades for Thursday. Top Stock Trades for Tomorrow No. 1: Boeing (BA)Source: Chart courtesy of StockCharts.comBoeing (NYSE:BA) shares remain under pressure, as its 737 MAX woes continue to weigh on investor sentiment. Now though, the stock is breaking through critical range support.Over the past 18 months, only the market-wide, fourth-quarter meltdown was enough to take BA stock below $320 range support. For the past year, any negative 737 MAX news was met by buyers near this mark -- until now.InvestorPlace - Stock Market News, Stock Advice & Trading Tips$320 support gave way this week, and now BA is knifing through its 150-week moving average. For many, BA is a no-touch. That is, until it reclaims $320 range support, or gets to a lower price. In the event of more downside, let's see if BA revisits the 2018 Q4 lows between $285 and $290. * 10 Stocks to Buy as the 2020 Presidential Election Approaches Below puts the 200-week moving average near $265 on the table. Top Stock Trades for Tomorrow No. 2: Aphria (APHA)Source: Chart courtesy of StockCharts.comAphria (NYSE:APHA) stock was one of two cannabis plays that I liked coming into 2020, along with Canopy Growth (NYSE:CGC). APHA is moving nicely on the day, up nearly 8%.The stock is hitting its highest level since it closed at $5.50 on Dec. 13, as it breaks out over that same price and continues to gain after pushing through downtrend resistance (purple line).Bulls would love to see APHA power through the 200-day moving average, although it may very well act as resistance on its first test.If Aphria shares pullback, bulls need to look for two areas of support. The first is $5.50, which had been resistance for months, while the second is the 50-day moving average and uptrend support (blue line). Below, and $4.50 is back on the table. Top Stock Trades for Tomorrow No. 3: JD.com (JD)Source: Chart courtesy of StockCharts.comAbove is a multi-year, weekly chart of JD.com (NASDAQ:JD), which shows the impressive bullish volume in the stock over the past few quarters. The stock hammered out a nice bottom near $20 in late 2018, and has been working higher ever since.For most of 2019, JD.com was setting up in a beautiful long-term ascending triangle. That's where rising uptrend support (blue line) squeezes a stock against a static level of resistance. The latter came into play near $32 and the 200-week moving average.Bulls got what they were looking for in the form of a big-time breakout. JD has since reclaimed $36, and continues to rise. If it can maintain this week's gain, investors are looking at a bullish, engulfing candle -- suggesting more upside could be in store. * 7 Energy ETFs to Buy for a Rebound in 2020 Over $42, and the $44 to $46 range is on the table. Historically, JD.com has struggled above this area. Above it, and $50 is possible. Below $39, and perhaps we can get a test of $36. Should the market really unravel, I'd love to scoop JD up at $32. Top Stock Trades for Tomorrow No. 4: Virgin Galactic (SPCE)Source: Chart courtesy of StockCharts.comYou want to talk about volume, though? Just check out the profile on Virgin Galactic (NYSE:SPCE). This stock continues to erupt higher and higher, leaving the stratosphere.We flagged the stock on its breakout over $12, paving the way to some tremendous gains, although I have been more cautious on the name north of $15. Like I said then, there could certainly be more upside, but no way can we be buyers here near $20 when SPCE was at $11 just a few days ago.Maybe we can buy a pullback, if there are signs that bulls still have momentum. Otherwise, we could see this one blow its top off and then fizzle.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long APHA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy as the 2020 Presidential Election Approaches * 5 Dividend Stocks With Low Payout Ratios and High Yields * 4 Post-Holiday Retail Stocks Still Worth a Look The post 4 Top Stock Trades for Thursday: BA, APHA, JD, SPCE appeared first on InvestorPlace.
A survey of the provincial board’s online stores presented a more concentrated market for cannabis 2.0 products than for dried flower, Cantor Fitzgerald analyst Pablo Zuanic said in a Tuesday report. The ...