42.10 +0.06 (0.14%)
After hours: 5:48PM EDT
|Bid||42.04 x 1300|
|Ask||42.02 x 800|
|Day's Range||41.81 - 42.62|
|52 Week Range||24.21 - 59.25|
|Beta (3Y Monthly)||4.03|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
In the world of pot stocks, your options are seemingly limitless. To reduce the agony of parsing which stocks might be winners and losers, you might just settle on the biggest names out there. With legal marijuana sales growing at a rate higher than 20%, how could you go wrong?
After recreational marijuana sales were legalized last year, Canopy Growth Corp.’s pot sales jumped 360%. When the world’s largest pot company reports a fresher crop of results this week, that number may be less than 40%.
Cannabis stocks rose Tuesday, buoyed by gains in the broader market and hopes for a bill that would block the Justice Department from interfering in states that have legalized weed for medical or recreational use.
Hexo (NYSE:HEXO) reported third-quarter earnings Thursday before the bell. The Quebec-based cannabis company's revenues missed analysts' estimate by a wide margin and even declined versus Q2, causing HEXO stock to plunge on both Thursday and Friday.Still, while this report might have scared investors, it does not appear to have affected the overall trajectory of Hexo Corp. HEXO Fell on a Massive Revenue MissThe HEXO stock price fell by another 5% on Friday. That came on top of an 8.5% decline on Thursday, as the fallout from the sequential revenue decline sent HEXO stock price plunging.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 5 Stocks to Buy for $20 or Less For Q3, analysts, on average, had expected a loss of 5 cents per share. The company reported a loss of 4 cents per share, coming in ahead of estimates. However, its revenue of C$13 million was well short of the C$14.8 million analysts, on average, had expected.But HEXO's sales soared more than tenfold from the C$1.2 million of revenue it reported in the same quarter a year earlier. However, its $400,000 sequential revenue decline may have further dampened traders' view on HEXO stock. HEXO Is Still Poised for Robust GrowthUp to this point, HEXO had begun to develop a reputation as a sleeper play in this industry. It does not garner the attention that is devoted to Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY), or Cronos Group (NASDAQ:CRON).However, its home province of Quebec is Canada's second-largest. In this province of about 8.4 million people, HEXO controls more than 30% of the cannabis market. It has been able to be so successful in large part because of a supply deal it made to bring 200,000 kg of cannabis to the province over five years.Meanwhile, HEXO recently agreed to buy Newstrike Brands (OTCMKTS:NWKRF). The deal increases HEXO's production space by 470,000 sf. That gives the company enough capacity to produce 150,000 kg of cannabis per year. HEXO also wants to enter the edibles and beverage markets. In the beverage space, it has partnered with Molson Coors (NYSE:TAP).On top of that, though analysts expect HEXO to post a 17 cent per share loss this year, they expect its EPS to rise to positive 11 cents next year. Also, notwithstanding the quarterly report, its revenues appear robust. The company only brought in C$4.93 million last year. However, for fiscal 2019, analysts' consensus revenue estimates rise to C$62.62 million. In 2020, analysts expect its revenue to reach C$319.4 million. This triple-digit growth may turn Thursday's results into an anomaly Wall Street will soon forget. Should Investors Buy HEXO Stock?In fairness, most of HEXO's marijuana stock peers also sold off on the news. Hexo's report could have left many with second thoughts about the industry's lofty valuations. Still, I see the decline of HEXO stock price as an overreaction. Its sequential revenue decline does nothing to undermine the longer-term case for HEXO stock.For this reason, I think investors should still be bullish on HEXO. Its revenue decline might have blindsided Wall Street. However, by focusing on that revenue number, investors apparently ignored an acquisition that will dramatically increase both the company's production capacity and its reach in its home country.Moreover, HEXO has attracted an ally in Molson Coors that can give the company the financial muscle and marketing knowledge it needs to launch cannabis-based beverages. Additionally, its lucrative supply agreement in its home province has bolstered its position in edibles and other markets. Given its growth potential, investors should add to their positions in HEXO, instead of selling HEXO stock.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 5 Red-Hot IPO Stocks to Buy for the Long Run * 5 Stocks to Buy for $20 or Less * 4 Dow Jones Stocks Ready to Rise Compare Brokers The post Hexo Stock Remains Attractive Despite Revenue Miss appeared first on InvestorPlace.
Late last month I fleshed out some thoughts on Aurora Cannabis (NYSE:ACB), ultimately deciding that an investment in Aurora stock was mostly an investment in medical marijuana with an emphasis on Europe.Source: Aurora Cannabis It's a difference that still doesn't entirely matter. While Canopy Growth (NYSE:CGC) appears to be catering to recreational users while New Age Beverages (NASDAQ:NBEV) is, of course, looking to take an early lead in the CBD-infused beverage space, most of the major names in the business are still acting as a lot of things to a lot of people.The nascent industry has made the race a very messy and complex one. The proverbial land-grab of smaller names in the business has only made matters messier.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe legalized marijuana movement has matured enough to start making meaningful comparisons of all these companies. There's yet-another nuance to Aurora Cannabis that keeps Aurora stock at the upper portion of a list of marijuana stocks to buy. * 7 Top-Rated Biotech Stocks to Invest In Today Latin American MarijuanaAs yours truly predicted would be the case several times last year and earlier this year, cannabis is becoming a commodity and is increasingly priced as such. Though up recently, marijuana prices are broadly falling as its cultivation scales up, and the business is increasingly focused on low-cost production now that suppliers have to compete on price.My intuition about where newly-developed crops would be planted has so far been wrong, however. I widely assumed most new growth would actually take shape where it was sold and consumed, but it's actually been Latin America.That growth has been largely spurred and sponsored by pharmaceutical companies. Khiron Life Sciences is partnering with a research hospital in Colombia. Canada's PharmaCielo now owns a piece of Mexico's Mino Labs that ensures a supply of cannabis oil.Non-pharmaceutical players are also plugging into the low-cost and low-hurdle supply offered by growers in Latin America as well, however. Tilray (NASDAQ:TLRY), for instance, has acquired Chile's Alef Biotechnology, which grants the company a valuable production license.The moves, and others like them, put North American companies into a Latin American cannabis market expected to be worth $12.7 billion by 2028; most of that would be sales of medicinal cannabis.But, as laws progress and minds are changed, it's likely that restrictions currently making importing and exporting cannabis incredibly difficult will be eased.That makes Latin America a marijuana hub that Aurora isn't a part of. Except, it is. Aurora Stock and Latin AmericaThe company seems vulnerable on the surface. It's one of the largest names in the business in terms of production potential, with something on the order of 570,000 kilograms' worth of annual yield possible now that the MedReleaf deal is done. But, given its acquisition trend, the eventual output of as much as one million kilos per year doesn't seem outlandish.Since home-grown production is important to Aurora, the prospect of lower-cost production from Latin America is a concern.Aurora Cannabis acquired Uruguay-based ICC Labs in November. The deal not only gave Aurora 70% of the Uruguayan recreational market, but it also grants the new owners licenses to grow medical marijuana in Colombia and plugs it into an agreement with Mexico that allows imports of the commodity into that country.It's a foothold in a continent that 650,000 people call home and a continent that Europe's buyers are increasingly turning to in order to source cannabis, for a variety of uses. That's just another nuance that dovetails into the business Aurora has been developing.It's also a collective of countries that have been a little more progressive about cannabis than its neighbor to the north.What Cam Battley, Chief Corporate Officer for Aurora, meant when he commented, "We see ICC as the jewel of the South American market. This is going to be our anchor in South America and we have very big plans for that continent" still isn't exactly clear. But, it does suggest more deal-making and more market penetration are on the way. Looking Ahead for Aurora StockIt's still the early innings for the cannabis revolution. The dust is still settling, and a wide array of potential outcomes lie ahead.It is becoming clear, however, that Aurora Cannabis is emerging as one of the more deliberately and strategically-managed players of the marijuana movement.It remains focused on Europe and medicinal marijuana but is also establishing roots in a mostly-underserved South American market. Though not neglecting North America, it appears it's being selective, picking and choosing its battles in what's become an overwhelmingly competitive Canadian market. The U.S. market is ready to see some overflow too.As 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) * 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 Diversification Is What Makes Aurora Stock a Solid Marijuana Play appeared first on InvestorPlace.
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.
Cannabis stocks are mixed, with market leader Canopy Growth Corp. gaining after it announced its latest growth moves ahead of Wednesday’s shareholder vote on its proposal to acquire Acreage Holdings.
Aurora Cannabis (NYSE:ACG) isn't consistently profitable and has failed to meet Wall Street analysts' earnings estimates in three out of the past four quarters. Like other pot shares, ACG stock is on a tear, up more than 50% since the start of the year as investors bet that better times lie ahead.Source: Shutterstock However, expectations for Aurora stock don't appear to be justified by the fundamentals. The company's penchant for dilutive acquisitions is particularly troubling. Massive DilutionAs of the latest quarter, ACB had had more than 1 billion shares outstanding, more than twice the 478 million shares it had a year earlier. Rival Canopy Growth's (NYSE:CGC) share count is about 238 million. Fortune 500 stalwarts such as CBS (NYSE:CBS) (351.9 million), Southwest Airlines (NYSE:LUV) (543.7 million) and McDonald's (NYSE:MCD) (763.6 million), each have fewer shares outstanding than ACB.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 High-Quality Cheap Stocks to Buy With $10 Let's not forget the options to purchase 19.96 million ACB shares awarded in March to billionaire Nelson Peltz when Aurora named him as a strategic advisor. Though Peltz certainly has the connections to make things happen for ACB, that award is still massive since the company's current top shareholder Vanguard "only" had 20.3 million shares, as of the end of 2018. Profitability StrugglesMeanwhile, ACB is struggling to achieve consistent profitability. Wall Street analysts are expecting the red ink to continue through at least 2020. They have an average price target on the stock of $14.27, a potential upside of 40% for reasons that elude me.A glut in the Canadian pot market will keep prices depressed for the next two to three years just as ACB ramps up production. While I realize that ACB aims to push down prices, it seems that the plan may work too well.Demand also hasn't been robust. According to Health Canada, total sales of dried cannabis grew 7% to 16,488 kilograms between January 1 and March 31 compared with October 16 to December 31, 2018. The total inventory of weed was 30,802 kilograms, as of the end of March, nearly twice the 18,940 kilograms at the end of December 2018. Negative View On BeveragesSpeaking during the company's recent earnings conference call, chief executive Terry Booth surprised investors with his negative comments regarding the demand for cannabidiol (CBD)-infused beverages given the reports that his company held talks with Coca-Cola (NYSE:KO) about a partnership. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Other companies including Canopy, are more optimistic about the potential for CBD, which lacks the THC compound that makes users high, in beverages. Constellation Brands (NYSE:STZ) invested $4 billion in CGC last year. Anheuser-Busch InBev (NYSE:BUD) teamed up with Canadian pot producer Tilray (NASDAQ: TLRY) on a $100 million initiative to research uses of CBD in non-alcoholic beverages. Heineken's Lagunitas brewery released a non-alcoholic THC-infused beer called Hi-Fi Hops last year. Molson Coors (NYSE:TAP) joined forces with Quebec-based cannabis company HEXO to develop non-alcoholic beverages. Bottom Line on ACB StockThough I had some concerns about Canopy Growth, I like those shares more than ACB stock. Canopy's partnership with STZ gives it financial flexibility that Aurora Cannabis lacks. If you want to buy stock in the highly risky legal pot sector, there are better choices than ACB.-Jonathan Berr doesn't own shares in any of the stocks discussed in this post. 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 Amid A Pot Stock Boom, I Have Misgivings About Aurora Cannabis Stock appeared first on InvestorPlace.
A good rule of thumb in the stock market is to not buy stocks just because they are cheap or low. Cheap stocks, or stocks that trade at discounted valuation multiples, are often cheap for a reason. The same is true for low-price stocks, or stocks that trade in the under-$10 and under-$20 ranges.As such, when dealing with super cheap stocks or super low-price stocks, investors should exercise caution. These stocks are at these levels for a reason, and it's not usually a good reason.Having said that, this group of beaten up stocks does offer significant upside potential. These stocks are priced for death. Thus, if anything good happens, these stocks will rise by a lot, and quickly. But you need something good to happen first, and something good only materializes for a handful of these sub-$10 and sub-$20 stocks.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Top-Rated Biotech Stocks to Invest In Today With that in mind, I've put together a list of high quality stocks in the under $20 bucket which are supported by healthy fundamentals, and have a realistic opportunity to rally in a big way from their current prices. Which stocks made the list? Let's take a deeper look. Luckin Cofffe (LK)Source: Shutterstock Stock Price: $18The first stock on this list is freshly public Luckin Coffee (NYSE:LK), the hyper-growth China retail coffee chain which many dub the Starbucks (NASDAQ:SBUX) of China.The core growth narrative here is very favorable. Luckin is the fastest growing and second largest retail coffee operator in China, and is on track to soon become the largest player in the space. At the same time, the China economy is rapidly urbanizing and expanding, and the coffee market in that economy is surging higher, rising by over 30% last year. That makes Luckin the hyper-growth leader in a rapidly expanding market, a combination which ultimately implies tremendous long-term growth potential.The numbers underlying LK stock are equally favorable. Luckin Coffee has a market cap of about $4 billion. Starbucks has a $100 billion market cap. To be sure, Luckin Coffee will never be as big as Starbucks. But, if the company does become a leader in what projects to be a $25 billion-plus China retail coffee market, then today's $4 billion market cap looks like a steal.Starbucks has about 40% market share in the U.S. Luckin can maybe do 20% share in China. A 20% share in a $25 billion market implies $5 billion revenue potential. On 10% operating margins and after a 20% tax rate, that equates to $400 million in net profits. A market average 16 multiple on that implies a potential future valuation target of over $6 billion. That's way bigger than $4 billion. Aurora Cannabis (ACB)Source: Aurora Cannabis Stock Price: $7.50In the under $10 category, one of the more attractive stocks to buy is undervalued Canadian cannabis producer Aurora (NYSE:ACB).No matter which way you slice it, Aurora is one of the more undervalued pot stocks in the market. It's cheaper than most peers on a trailing sales basis, forward sales basis, volume basis, and on pretty much every other important operating metric. That relative cheapness in ACB stock comes despite Aurora having many strengths. Aurora is the second largest player in the Canadian cannabis market behind Canopy Growth (NYSE:CGC), is one of the fastest growers in the market, is behind some of the top selling products across Canada and has one of the largest production capacities.Why, then, is ACB stock cheap relative to peers? Balance sheet. Cronos (NASDAQ:CRON) and Canopy are loaded up with billion dollar investments from consumer staples giants, which simultaneously shore up their balance sheets and give those companies ample firepower to grow rapidly. * The 7 Best Tech Stocks to Buy for the Second Half of 2019 Aurora has no such investment. But if the stock stays this cheap for long, it's only a matter of time before they get a big investment. Also, the company is tapping into the debt markets to raise sufficient capital to compete, meaning that in the big picture, this valuation disconnect has no reason to exist. If it gets wiped out -- as it should -- ACB stock could fly higher. Vipshop (VIPS)Source: Shutterstock Stock Price: $7.75Another hidden gem in the under $10 category is Chinese e-retailer Vipshop (NASDAQ:VIPS).Although China's economy is slowing, it is still growing at a robust mid single digit rate. At the same time, the digital economy remains red hot, with e-retail sales projected to rise 30% this year. Vipshop is at the heart of this robust e-retail sales growth narrative. Further, Vipshop is a discount retailer, and if the U.S. retail landscape has shown us anything, it is that off-price retail is a winning strategy. See the stocks of Ross Stores (NASDAQ:ROST), TJX (NYSE:TJX), Walmart (NYSE:WMT) and Five Below (NASDAQ:FIVE), versus the stocks of Nordstorm (NYSE:JWN) and Macy's (NYSE:M).Thus, Vipshop finds itself at the convergence of two favorable trends. On one end, you have robust growth through expansion of China's e-commerce landscape. On the other end, you have sustained popularity through an off-price retailing strategy.Net net, that means Vipshop projects as a sustained big grower for the foreseeable future. That sustained big growth should shoot VIPS stock materially higher from today's sub-$10 price. American Eagle Outfitters (AEO)Source: Mike Mozart via Flickr (Modified)Stock Price: $17A bunch of mall retailers trade in the under $20 range. But, only one retail stock is really worth buying at these levels and that stock is American Eagle Outfitters (NYSE:AEO).Put simply, American Eagle is a winning retailer. They are succeeding where others are not. American Eagle has transformed into the king of the denim category, and denim has made a strong comeback over the past several years. At the same time, American Eagle's Aerie brand has been one of the hottest stories in retail because the brand has aligned itself with body positivity tailwinds. Because of these favorable dynamics, American Eagle demand has remained resilient in the face of broader mall retail demand turbulence, which has allowed American Eagle to report far better than peer numbers over the past several quarters.The numbers speak for themselves here. American Eagle has rattled off 17 consecutive quarters of comparable sales growth, and 6 consecutive quarters of 5%plus comparable sales growth, including a 6% comp last quarter. In the overlapping period, peer mall retailers Nordstorm, J.C. Penney (NYSE:JCP), Gap (NYSE:GPS), Express (NYSE:EXPR) and many others pretty much all reported negative comps. The norm was also big gross margin compression. American Eagle's gross margins only fell back 30 basis points. * 5 Red-Hot IPO Stocks to Buy for the Long Run Broadly, American Eagle Outfitters is significantly outperforming its retail peers. This is nothing new. This has been the trend for a long time. It also projects to remain the trend for the foreseeable future. Consequently, if you're gonna buy a mall retail stock in the under $20 category, AEO should be your first choice. Ford (F)Source: Jens Mayer via Flickr (Modified)Stock Price: $10The last stock on this list is another stock in the sub-$10 category which has compelling upside in a medium to long term window.We all know Ford (NYSE:F), the U.S. automotive giant that makes great pick-up trucks and a variety of other good cars. Naturally, that sounds like a stable business, since auto demand is fairly stable, and Ford has been a relevant player in that space for what seems like forever. But the narrative supporting Ford stock has weakened over the past several years, mostly because the auto space is shrinking thanks to ride-sharing, and because Ford is losing share thanks to the emergence of electric vehicles.These headwinds are very real. But they are also overstated. Sure, some urban residents will chose to forego car ownership as a result of increased ride-sharing prevalence. But most won't, because no matter how good ride-sharing gets, it won't ever parallel the convenience of car ownership. Further, electric vehicles are ramping. But, Ford isn't just sitting on its hands while consumption pivots. They are pivoting into the EV space, too, and the company should be able to command respectable EV share at scale.Overall, then, the fears dominating the Ford narrative at present are overstated. Ultimately, they will pass, and when they do, Ford stock will rally from today's depressed levels.As of this writing, Luke Lango was long LK, ACB, CGC, TJX, WMT, FIVE, and JWN. 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 5 Stocks to Buy for $20 or Less appeared first on InvestorPlace.
Canopy said it will leverage Procaps’ encapsulation capacity. The Canopy subsidiary Spectrum Therapeutics has completed sales to patients in Chile and Brazil, the company said. In Australia, Spectrum received its first medical cannabis oil shipment in April, with sales commencing the following month.
The high times for Aurora Cannabis (NYSE:ACB) have certainly come down over the past couple months. But before you think a cheaper-priced ACB stock means better value, risks off and on the price chart remain. Let me explain.Source: Aurora Cannabis There's still a lot of buzz surrounding the cannabis industry and plenty of support from Wall Street pitching optimistic favor about the group's growth prospects. No doubt there's also some very well-supported and cash-flush companies like Canopy Growth (NYSE:CGC) and Cronos (NASDAQ:CRON), which are in position to emerge as future leaders in the space. Many investors also agree Aurora stock is another standout in this emerging market.Still, the other side of this argument is the growing pains and delays the cannabis industry will undoubtedly continue to face. Discounting these would be a mistake. It would also be neglectful to not respect some of ACB stock's company-specific risks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRightfully, investors can make the case for Aurora due to the company's valuation discount versus competitors in today's market or the company's impressive sales beat last quarter. But massive goodwill tied to ACB stock's aggressive acquisition strategy over the past couple years is approaching 60% of the company's valuation and a definite yellow flag for investors. * 7 Top-Rated Biotech Stocks to Invest In Today Also, Aurora stock's quest to capitalize on the cannabis market's secular growth prospects has come with the very real cost of share-based dilution.The varied and extensive costs associated with Aurora positioning itself as industry leader has been fueled by massive dilution. In the process ACB's share count has exploded from about 16 million to roughly 1.0 billion shares. And that's a huge burden on earnings. ACB Stock Weekly Chart Click to EnlargeThe risks on ACB stock's price chart also shouldn't be overlooked. As the weekly chart shows, a couple momentum phases have been replaced by 13 weeks of Aurora shares grinding lower. But today's 40% discount from last year's marginal all-time-high also doesn't necessarily mean value is at hand.As Aurora stock has declined in price the past couple months shares have failed to hold the 50% retracement level from 2018's high to December's corrective bottom. In our view that weakness could be an indication the cannabis narrative is growing long in-the-tooth and riskier every day for investors to buy into. It's akin to the glass being just half empty rather than half full in ACB shares.If there is any chance for ACB stock to shake off what could be a long road downhill, I believe it needs to happen sooner rather than later. Optimistically, there is a weekly doji and inside candle in place. If the pattern high of $8.16 is penetrated, it's a bullish signal.Backing up that promise, shares are also testing the 50% level of ACB's 2019 Fibonacci cycle and critical longer-term 40-week simple moving average. Aurora stock is also sporting a supportive oversold stochastics condition. Bottom line, the right technical ingredients for ACB stock to regain its mojo are there. However, I'd strongly caution keeping a lid on any losses generated from a pending buy signal in a name and an industry with a lot to prove.Disclosure: Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 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 Avoid Getting Burned by Aurora Cannabis (ACB) Stock appeared first on InvestorPlace.
SMITHS FALLS, Ontario, June 17, 2019 /PRNewswire/ -- Canopy Growth Corporation ("Canopy Growth" or the "Company") (WEED.TO)(CGC) is pleased to highlight recent developments that are fueling its international progress in emerging medical cannabis and CBD markets. The Company's global three-prong strategy includes a focus on building best-in-class global GMP (Good Manufacturing Practices) infrastructure, advancing clinical research programs and best-in-class education and sales programs through its Spectrum Therapeutics medical division, and launching CBD products where regulatory environments allow.
Last week was quite eventful for the cannabis industry, with Colorado reaching $1.0 billion in sales and Kroger Co (NYSE: KR ) announcing plans to start carrying CBD products. Here’s what you should keep ...
SMITHS FALLS, ON , June 17, 2019 /CNW/ - Canopy Growth Corporation ("Canopy Growth" or the "Company") (WEED.TO)(CGC) is pleased to highlight recent developments that are fueling its international progress in emerging medical cannabis and CBD markets. The Company's global three-prong strategy includes a focus on building best-in-class global GMP (Good Manufacturing Practices) infrastructure, advancing clinical research programs and best-in-class education and sales programs through its Spectrum Therapeutics medical division, and launching CBD products where regulatory environments allow.
Perhaps more than any other stock listed in the U.S. market, the fate of Canopy Growth Corp (NYSE: CGC) stock rests in the hands of the U.S. government. Canopy can be successful with or without U.S. cannabis legalization. But CGC stock needs America to legalize cannabis. In anticipation of U.S. legalization., CGC stock price is already extremely high relative to its current business.Source: Shutterstock Canopy recently committed $3.4 billion to a buyout of U.S. cannabis producer Acreage Holdings (OTC: ACRGF). Of course, the deal is contingent upon U.S. legalization of cannabis.Experts disagree on how many years it will be until the U.S. legalizes cannabis. But political pressure for legalization is mounting. The most recent polls by Gallup, Pew, Quinnipiac and others consistently suggest more than 55% of Americans favor legalization. However, cannabis may end up being one of the centerpieces of the 2020 U.S. presidential campaign. If it is, the 2020 election may be a win-win for the owners of CGC stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The 7 Best Tech Stocks to Buy for the Second Half of 2019 STATES ActThe Strengthening the Tenth Amendment Through Entrusting States Act of 2019 (STATES Act) is the key for Canopy Growth stock. The bipartisan bill is co-authored by Democratic presidential candidate Senator Elizabeth Warren. The STATES Act would essentially remove the federal government from cannabis regulation, leaving the issue up to individual states. The STATES Act would eliminate much of the risk from the cannabis business within the U.S. Today, U.S. cannabis producers are operating illegally under federal law, which conflicts with state laws that legalize cannabis.The STATES Act would potentially open up the flood gates for U.S. cannabis production. More critically, it would also free up banks to lend to cannabis companies. The National Association of State Treasurers recently adopted a resolution calling for "common-sense federal laws and regulations" for cannabis companies that are operating in accordance with state laws. Banks are itching to fund cannabis companies. The owners of CGC stock are chomping at the bit for Canopy to exploit its first-mover advantage in the U.S. market. What 2020 Means For CGC StockHistorically, the U.S. Democratic Party has favored cannabis legalization, while Republicans have opposed it. However, Piper Jaffray analyst Michael Lavery says that dynamic may shift dramatically in the 2020 election campaign.Lavery says cannabis could become one of the top five central issues of the campaign. Surprisingly, he says President Donald Trump may be forced to throw his full weight behind legalization."By supporting cannabis, Trump may be able to incrementally broaden his appeal with swing voters without alienating his base," Lavery says.Trump's ultimate opponent will be one of the primary factors determining whether Trump supports legalization.Joe Biden is currently the front-runner for the Democratic nomination, according to PredictIt. Biden hasn't been particularly supportive of the legalization movement in the past. In fact, Biden would potentially be a worst-case scenario for CGC stock price.However, Warren has rapidly closed the gap with Biden in the past three months and is now his strongest opponent. Warren would be a best-case scenario for CGC stock. Given that Warren is the co-author of the STATES Act, Lavery says her nomination would force Trump's hand on cannabis.In fact, there's even a scenario in which Trump could attempt to steal political credit from Warren on cannabis. If the STATES Act stalls in the Republican-controlled Senate, Trump could swoop in and get the job done."Mitch McConnell is a roadblock for legislation in the Senate, but Trump could use executive orders between now and the election to show support for the industry, potentially relating to cannabis banking or medical research," Lavery says. The Bottom Line on CGC StockCanopy Growth Corp is the best-positioned marijuana stock to benefit from U.S. legalization. However, the owners of CGC stock may not need to wait until November 2020 to see progress. They also may not need a Democrat to win the election. If Warren or another pro-legalization candidate gets the Democratic nomination, President Trump may use cannabis legalization as a political strategy in the election. In other words, Canopy Growth stock could be a big winner of the 2020 election, regardless of who wins the White House.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post America's 2020 Election Is a Win-Win for Canopy Growth Stock appeared first on InvestorPlace.
With many cannabis stocks at sky-high valuations, there's little room for making mistakes. Just look at Hexo (NYSEAmerican:HEXO). On news of its latest earnings report, the stock price dropped 8.53%. Note that the HEXO stock price is about 50% off its 52-week high.Source: Shutterstock So let's drill-down on the quarter. For the bottom line, the company actually beat expectations. HEXO reported a loss of 7.75 million CAD ($5.77 million) , or 4 cents a share, while the consensus was for a loss of 5 cents a share.But the top-line was another story. Revenue came in at 13.02 million CAD yet the Street was looking for a more robust 14.8 million CAD. What's more, there was an 8.6% quarter-over-quarter drop in sales.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNow predicting quarterly numbers has not been easy as Canada is still in the early phases of legalization for recreational purposes. There are also ongoing shortages, supply complications and regulatory issues to deal with. * 7 Stocks to Buy for the Coming Recession But then again, investors are certainly baking in lots of growth. So it should be no surprise that HEXO stock took at hit.Here are some other worrisome metrics for the quarter: * The average price of adult-use dried grams dropped from $5.83 CAD in January to $5.29 CAD in April. * The average gross selling price per gram was also soft, going from $9.15 CAD to $9.11 CAD.But of course, there was also some good news in the report. The company announced it received a medical cannabis installation license from the Greek government for "cultivation, processing and manufacturing facilities."To this end, Hexo plans to begin construction of a 323,000 square-foot facility in the country by the fourth quarter of this year. No doubt, this should ultimately be a nice catalyst for long-term growth.In the meantime, Hexo has other promising initiatives. For example, the company has entered a partnership with Molson Coors (NYSE:TAP) to develop cannabis-infused beverages. There are also aggressive plans to benefit from the cannabidiol (CBD) market (this involves the use of compounds in the cannabis sativa plant that do not produce a high).With the passage of the U.S. farm bill last year, the category is likely to see a spike in growth in the coming years. According to research from the Brightfield Group, the market in the U.S. could hit $22 billion by 2022. Bottom Line on Hexo StockAccording to InvestorPlace's James Brumley, Hexo stock has been mostly overlooked -- say compared to names like Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aurora Cannabis (NYSE:ACB) and Cronos Group (NASDAQ:CRON). I agree. * 7 High-Quality Cheap Stocks to Buy With $10 I also think this presents an opportunity for investors. Consider that Bank of America (NYSE:BAC) analyst Christopher Carey holds that Hexo stock has the most attractive valuation within his coverage universe. The price target is actually $10, which assumes a whopping 78% upside from current levels!Hexo's management is also not backing off its revenue estimates. They not only call for a doubling in the current quarter but $400 million CAD for fiscal year 2020, which does not include the impact from the Molson Coors's partnership.Now when it comes to cannabis stocks, there should always be caution. Again, the industry is in the early stages and there will likely be continued volatility. Let's face it, the competitive environment is getting more intense and the legal environment is far from certain.So yes, investors should be diligent with their money. But as for Hexo stock, there are certainly many positives, in terms of the global expansion, CBD opportunity and the growth in Canada.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post Hexo Stock Has An Earnings Buzz Kill That Simply Isn't Deserved appeared first on InvestorPlace.
Which stock wins in a battle between the biggest cannabis producer by market cap and the biggest supplier to the cannabis industry?
In Canada, a committee in the House of Commons called for the decriminalization of the possession of small amounts of drugs, while the U.S. House of Representatives rejected an amendment that Rep. Alexandria Ocasio-Cortez (D-NY) had introduced, which sought to make it easier for scientists to study Schedule I controlled substances like psilocybin – found in mushrooms, MDMA and cannabis. The Church of England said its £8.3 billion ($10.5 billion) Church Commissioners for England fund would start investing in cannabis, cannabis CPG company Coda Signature closed a $24.4 million Series A funding round, and Medicine Man Technologies, Inc. (OTC: MDCL) announced the acquisition of Colombian company Green Equity S.A.S. – marking its third deal this month.
Canopy Growth Corp (NYSE:CGC) closed down 2.29% on Thursday, with CGC stock at $41.86 -- nearly one dollar lower than its Monday open after spiking over $44 on Tuesday. What caused the latest slide in CGC stock price? Besides the usual cannabis industry volatility (more on that shortly), the world's largest cannabis company announced on Thursday that it will release its Q4 results on June 20. And that comes just two days after the company's CFO gave an interview where he said his company will continue to lose money "for the foreseeable future."Source: Canopy Growth Why the Latest Slide in CGC Stock Price?In its Q3 earnings, Canopy Growth reported a surprise net income of $74.8 million CAD, however the company also posted an operating loss of over $157 million. It turned that loss into a positive only because of a change in the fair value of assets and liabilities -- which added over $233 million to its bottom line for the quarter. Naturally, CGC stock got a nice boost based on those results. * 7 First-Half IPO Stocks That Will Falter in 2019's Second Half In Q4, the company is expected to once again show an operating loss, but it won't have a repeat of last quarter's accounting boost. On the contrary, Canopy Growth's CFO told Bloomberg that CGC will likely be generating negative income "for the foreseeable future." The question there is whether the operating loss is shrinking -- showing a move toward eventual profitability -- or growing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRevenue is also something investors are nervous about. The Canadian recreational cannabis market has not taken off as quickly as expected. Marijuana sales dropped early in the year as the legalization excitement wore off, and unsold inventory built up. And just last week, Canopy Growth's Tweed cannabis retail operation was forced to lay off 12% of staff in the province of Manitoba in what it described as "growing pains."The dip in CGC stock reflects uncertainty about what is going to be seen in those Q4 (and full-year fiscal 2019) financial reports. CGC Stock Also Reflects Volatility in the Cannabis IndustryInvestors in CGC stock may be happy to see this week come to a close, however other cannabis stocks have also had a bumpy ride. In particular, Cronos Group Inc (NASDAQ:CRON) dropped 4.33% on Thursday, while Aurora Cannabis Inc (NYSE:ACB) repeated its pattern of last week, starting off up and then losing ground through the week (it dropped another 2.26% on Thursday). While this week has been up and down for CGC stock price, it reflects a 12-month period that's been a veritable roller coaster ride: below $25 last August to nearly $57 by October, dropping to the $27 range in December, back over $50 in January, topping $52 in April, and now just under $42.The overall theme is that the cannabis industry is still a relatively new one with recreational marijuana in particular in the early stages of growth.That means cannabis companies are still dealing with large expenditures as they open new production facilities. Retail outlets and supporting supply chain operations are still ramping up in most markets, and actual consumer demand for the product can be tough to judge accurately. Regulations can vary wildly in the different markets cannabis companies operate in, adding a high level of complexity to their business.In addition, many recreational marijuana producers are still perfecting methods for growing, harvesting, packaging and distribution.And then there's the hype surrounding the cannabis industry. It's not just the prospect of legalization in another state or even at the federal level that get's investors excited and buying up Canopy Growth stock. Headlines about cannabis products like CBD and its potential health benefits can cause big spikes in cannabis stocks as investors stampede to get in early. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 All of these factors mean costs and revenue can vary significantly from quarter to quarter. And until the industry matures, CGC stock and other cannabis stocks are best for patient investors who are willing to wait and ride out the rocky weeks and wild swings.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post CGC Stock Continues Week of Losses for Pot Stocks appeared first on InvestorPlace.
Editor's note: InvestorPlace's Earnings Reports to Watch is updated weekly. Please check back next week for our latest earnings picks.U.S. equity markets are climbing again. After weakness in May, broad market indices have rallied in June -- for reasons that aren't obvious. Earnings reports haven't been much of a driver; the earnings calendar has been light. External factors still seem somewhat bearish.It may be that fears of a trade war are being balanced by hopes for another Fed rate cut. The May sell-off may have been enough to entice investors. With Treasury yields plunging and overseas risks rising, it may be that investors simply see nowhere else to find returns.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor now, at least, investors seem willing to stick with U.S. equities. With a month to go until earnings season kicks in again, it remains to be seen whether that will remain the case.In the meantime, there are some interesting earnings reports to watch next week -- even if the calendar remains too light to move the entire market. A tech giant will try to prove its turnaround is underway. A cannabis leader will try to jumpstart a sector that has struggled in recent months. And one of the nation's most important retailers should give clues as to the health of the U.S. consumer. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 Investor eyes likely will stay on politics next week, but savvy investors should keep a close eye on these earnings reports as well, even if they may not make headlines. Earnings Reports to Watch: Oracle (ORCL)Source: Shutterstock Earnings Report Date: Wednesday, June 19, after market closeSimply put, recent earnings from Oracle (NYSE:ORCL) haven't been good enough. Oracle actually has beaten expectations in the last two quarters, but revenue declined year-over-year in each period. The company's long-awaited shift to the cloud hasn't played out.Given that, ORCL stock actually has held up reasonably well, touching an all-time high earlier this year. But investor patience might be running out. I asked over a year ago whether Oracle was the next Microsoft (NASDAQ:MSFT) -- a tech giant ready to reclaim former glory -- or the next IBM (NYSE:IBM), unable to quite keep pace with the technological change around it.Oracle still hasn't answered that question, but it gets another chance on Wednesday afternoon. A big fiscal-fourth-quarter report, including some level of revenue growth, might stoke optimism and allow ORCL to reclaim those all-time highs. Anything less at a time when cloud demand should be soaring, and investors might get sick of waiting for Oracle to show progress on its turnaround. Kroger (KR)Source: Shutterstock Earnings Report Date: Thursday, June 20, before market openGrocery stores, including Kroger (NYSE:KR), plunged two years ago when Amazon.com (NASDAQ:AMZN) acquired Whole Foods Market. That deal perhaps hasn't been as transformative as some thought it might be - but since then, sentiment toward grocery stocks has appeared muted. KR stock did manage to rally from late 2017 lows -- but a 10% decline so far this year has the stock back where it traded two years ago.But what the Amazon-Whole Foods deal obscured was the fact that Kroger itself had sent the industry reeling just the day before. A disastrous fiscal Q1 report sent KR shares tumbling 18% and brought other grocery stocks down with it. As that report showed, Kroger earnings can impact its peers and even its competitors.For both Kroger and the grocery sector, Q1 FY20 results seem particularly important. Kroger reported more margin pressure with its fiscal Q4 report in March. Walmart (NYSE:WMT), Costco Wholesale (NASDAQ:COST) and even Target (NYSE:TGT) continue to show strength. A second straight miss -- particularly if accompanied by more margin pressure -- will suggest that Kroger is struggling to compete. That in turn suggests that smaller chains like Weis Markets (NYSE:WMK) and Ingles Markets (NASDAQ:IMKTA) may have their own problems going forward. * 7 High-Quality Cheap Stocks to Buy With $10 With those stocks all selling off of late, expectations for Kroger earnings likely are low. But the company will need to at least meet those expectations -- or else investors might start questioning not just KR stock, but the entire sector. Canopy Growth (CGC)Source: Shutterstock Earnings Report Date: Thursday, June 20, after market closeAfter a big rally to start 2019, shares of cannabis play Canopy Growth (NYSE:CGC) have drifted mostly downward. That includes a 20%+ decline from late April highs. Other major pot plays have seen similar trends. With growth slowing in the Canadian recreational market, and no other significant catalyst on the horizon, the optimism surrounding cannabis stocks at least seems to have moderated.We'll see if Canopy Growth -- the most valuable direct cannabis play out there -- can resurrect some of that optimism on Thursday afternoon. Certainly, Canopy earnings are likely to move the entire sector.And in the context of recent reports, Canopy is carrying a lot of weight. Aurora Cannabis (NYSE:ACB) missed revenue estimates in its fiscal Q3 last month. Cronos (NASDAQ:CRON) earnings were underwhelming.The sector clearly needs some good news. At the moment, it looks like it's up to Canopy Growth to provide it.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) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post 3 Earnings Reports to Watch Next Week appeared first on InvestorPlace.
Canopy Growth's brands, technology and know-how is anticipated to provide Acreage with a significant advantage in an increasingly competitive U.S. market and fuel Acreage's growth. Acreage shareholders will benefit from Acreage's ability to achieve its growth strategy with an anticipated reduced cost of capital based on Canopy Growth affiliation. Canopy Growth shareholders will benefit from accelerated and turnkey access to the U.S. cannabis market upon the closing of the Transaction.