27.16 -0.06 (-0.22%)
After hours: 7:59PM EDT
|Bid||27.18 x 1000|
|Ask||27.18 x 2900|
|Day's Range||26.81 - 27.76|
|52 Week Range||25.26 - 59.25|
|Beta (3Y Monthly)||3.38|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Few news items this summer jolted the legalized cannabis industry quite like the termination of former co-CEO Bruce Linton from Canopy Growth Corp.
The second full week of August 2019 might go down in the history books as a turning point. This was when the benchmark Dow Jones index absorbed an 800-point drop, the worst day so far this year. Naturally, the volatility impacted already beleaguered marijuana stocks.In my view, the cannabis market suffered from a two-pronged attack. First, it takes a brave soul to go against broader market bearishness. Obviously, there were few takers of the contrarian approach. Second, cannabis players delivered poor earnings results. That sent skeptical investors to run for the exits, turning marijuana stocks to buy into something else entirely.As a weed bull, I'm of course very disappointed. However, I think this presents an opportunity to consider the bigger picture for marijuana stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPrimarily, U.S. public attitudes toward the maligned plant have shifted dramatically, with a majority supporting legalization. Just maybe, risk-takers can profit handsomely by putting red-inked cannabis companies on their list of stocks to buy now. * 10 Cheap Dividend Stocks to Load Up On Furthermore, I'm very encouraged at the political situation as it pertains to marijuana stocks. Last year, the farm bill was one of the few pieces of legislation that earned consensus support. And if the Trump administration won't push for legalization, Democratic presidential candidates will.To the above point, because legalization is so popular, Trump might have to cede some ground here. If that's the case, you don't want to leave cannabis out of your stocks to buy list.Finally, marijuana stocks represent job creation. As the industry takes off, it'll create new, associated jobs, such as cannabis-testing services.So, don't give up on weed yet. Here are the ten best marijuana stocks to buy now: Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB) is easily one of the top names among marijuana stocks. However, the recent price action for ACB stock belies its reputation. Things got even uglier for the company when it announced an expansion of its credit leverage, totaling approximately 360 million CAD.Why such a dour response toward ACB stock? A familiar theme has popped up regarding the sea of disappointing earnings reports of late. Investors no longer want to hear about a good narrative or potential opportunities. Instead, they want evidence of traction.Further, they'd like companies like Aurora Cannabis to shore up their operations and financials before taking on bigger risks. Thus, a combination of fear and a lack of credibility has hurt ACB stock.Granted, we're in an ugly state of affairs for marijuana stocks. That said, ACB stock does have a tremendous ace up its sleeve: dominance in international presence. As medical cannabis legalization takes hold in other parts of the world, Aurora is well-positioned to take advantage.Thus, this fallout provides a case to put ACB on your list of stocks to buy now. Canopy Growth (CGC)Source: Shutterstock As I mentioned above, investors have punished Canopy Growth (NYSE:CGC) and CGC stock due to a recurring theme: fundamentally, marijuana stocks have not been able to convincingly deliver the goods. More critically, the markets shined a spotlight on Canopy Growth for its fiscal first-quarter earnings report. The results weren't great.Canopy couldn't live up to consensus earnings expectations. Given broader weakness among marijuana stocks in this area, that's no surprise. However, what really concerned investors and industry observers was that Canopy may have lost their lead in the Canadian recreational cannabis market. That was one of the few fundamental strongholds that management claimed in prior reports. With that apparently gone, Wall Street dropped CGC stock like a bad habit.I don't think anyone - even the weed bulls - will claim that CGC stock is a compelling investment at this juncture. However, for risk-tolerant speculators, I believe Canopy still presents a viable opportunity. For instance, the company has been aggressively pushing into the U.S. market, investing in diverse products such as edible cannabis. * 10 Undervalued Stocks With Breakout Potential Admittedly, Canopy will require substantial patience. However, the believability of its narrative means it belongs on a speculative list of stocks to buy now. Cronos Group (CRON)Source: Shutterstock Among major marijuana stocks, many investors consider Cronos Group (NASDAQ:CRON) as the most credible investment. Certainly, the biggest factor in this positive reputation comes from tobacco giant Altria (NYSE:MO). Known worldwide for its Marlboro brand, Altria plunked $1.8 billion for a 45% stake in CRON stock.As our own Will Ashworth stated, CRON stock is still a "brilliant" buy for Altria. However, individual weed investors have a different sentiment. Like other marijuana stocks, Cronos has charted an ugly trend channel over the trailing half-year period.Again, a significant factor in the bearishness is credibility and fundamental justification. Currently, CRON stock sports a market capitalization of $4 billion. However, with recent quarterly revenue topping out at less than $8 million, investors don't see the rationale for the premium.It's a fair point. But it's worth noting that CRON stock has always been a play toward the ultimate U.S. marijuana market. And management is making huge strides toward this lucrative arena. A great example is their $300 million buyout of Lord Jones, a U.S.-based hemp and cannabidiol (CBD) beauty products manufacturer.Essentially, if legalization momentum continues in the American cannabis space - and that really looks to be the case - then Cronos should skyrocket. That's a good enough reason to consider placing CRON on your portfolio of stocks to buy now. Tilray (TLRY)Source: Shutterstock Analysts never expected medical cannabis specialist Tilray (NASDAQ:TLRY) to deliver a profit for its most recent earnings report. However, they didn't expect the kind of steep losses that management delivered. As a result, TLRY stock took a massive beating that shocked even weed advocates that are used to extreme swings.Even worse for TLRY stock, investors completely ignored some of the underlying company's positive news. For instance, Tilray's revenue came in much higher than consensus estimates. Unfortunately, the negative sentiment surrounding marijuana stocks was simply too much for the cannabis firm.The other reason why the markets adopted a dim view on TLRY stock is Tilray's home market. With disappointment being the key theme for marijuana stocks, it's becoming clear that the Canadian weed sector is reaching a saturation point.However, for interested speculators, I wouldn't extinguish TLRY from your stocks to buy radar. Ultimately, we all know that Canada is a limited market. The main goal here is the U.S., and Tilray has positioned itself for the very real possibility of legalization. * 15 Growth Stocks to Buy for the Long Haul For example, Tilray bought Manitoba Harvest for $317 million. Billed as the world's largest hemp-based foods manufacturer, Manitoba represents a viable platform for Tilray to expand into the CBD food and beverages market. Hexo (HEXO)Source: Shutterstock According to many observers, Hexo (NYSE:HEXO) delivered disappointing revenue for its fiscal Q3. I'd argue that the sales haul wasn't disappointing at all. However, Hexo released their earnings results at a time when investors were seeking substance from marijuana stocks. Unfortunately, they couldn't come through against these elevated expectations, and HEXO stock fell as a result.Technically, HEXO stock has another problem. Hexo is one of the smaller outfits among marijuana stocks. Currently, its market cap is just a little over $1 billion and generates quarterly sales of around $10 million. Yet the company is making heavy investments which worry onlookers.Obviously, HEXO stock isn't for the faint of heart. This is really a gamble that its expansionary efforts will pan out quicker than its cash burn will destroy it. Given the political momentum behind marijuana stocks, I like my chances. Hexo has many cogs in play, including a partnership with Molson Coors (NYSE:TAP) to develop CBD beverages. Green Organic Dutchman (TGODF)Source: Shutterstock Hands down, Green Organic Dutchman (OTCMKTS:TGODF) has the coolest name among marijuana stocks to buy now. Unfortunately, that hasn't helped its case in the markets. Like other players in this sector, TGODF stock has taken a dive since early spring of this year. That said, it has weathered the recent storm better than most.Is that a clear sign to jump onboard TGODF stock? As a speculator, I believe Green Organic Dutchman offers serious potential. However, those with a more conservative outlook should be careful. With a price tag of less than $3, TGODF is under the law of small numbers. Any downturn in this segment could exponentially hurt shares.Fundamentally, prospective buyers should note that Green Organic Dutchman is not yet profitable. Still, I do like the fact that for its Q2 report, it sequentially grew revenue 20% from Q1. Much of that growth spurt came from European demand for Green Organic's premium-label cannabis products. * 10 Stocks Under $5 to Buy for Fall Additionally, the company just hatched their "Grower's Circle" project aimed at capturing market share for Canadian medical marijuana. Of course, TGODF stock is highly speculative, but there's also justification for this risk. Charlotte's Web (CWBHF)Source: Shutterstock Charlotte's Web (OTCMKTS:CWBHF) is one of those rare names among marijuana stocks to buy now that has a broader positive trajectory in the markets. Year-to-date, CWBHF stock is up 96%. Shares have also recovered much of the losses incurred during the spring season.Despite this encouraging positive, Charlotte's Web couldn't avoid a recurring headwind in this segment: disappointing earnings results. For its Q2 report, the company missed on both profitability and revenue consensus estimates. Immediately, CWBHF stock took a dive.Still, let's look at some positives for the CBD specialist. Headquartered in Colorado, CWBHF stock levers a geographic advantage. Other, mostly Canadian weed firms are aggressively working their way in. Charlotte's Web is already here.More importantly, this isn't just a statistic. Charlotte's Web has made good on this advantage, securing retail deals with CVS Health (NYSE:CVS) and Kroger (NYSE:KR). In my opinion, this is one of the most impressive set of deals in the CBD space. Therefore, CWBHF stock deserves serious consideration for your portfolio of marijuana stocks to buy now. CV Sciences (CVSI)Source: Shutterstock Although a long shot among speculative marijuana stocks, CV Sciences (OTCMKTS:CVSI) brings a compelling narrative to the table. As a pharmaceutical company, CV Sciences could disrupt its industry by forwarding therapies based on natural formulations, not artificial concoctions.Unfortunately, the markets have not found this narrative convincing enough. Along with broader credibility questions impacting the cannabis market, CVSI stock has incurred a worrying amount of red ink. Logically, this is only a name that gamblers should consider.Further, CVSI stock has a current price tag just over $3. Any bearishness could plummet shares. At the same time, positive catalysts could spark a massive upswing.It's this latter point that attracts speculators. Plus, the political situation somewhat favors CVSI stock. Over the years, the opioid crisis has gutted several cities across America. And what was the cause of this crisis? Pharmaceutical products levering unintended consequences. * 10 Best Stocks to Buy and Hold Forever With a focus on natural CBD-based therapies, I think the general public will give a fair shot to the concept. After all, most Americans already support marijuana legalization. Aphria (APHA)Source: Shutterstock Weed player Aphria (NYSE:APHA) used to be one of the high-flying marijuana stocks to buy now. However, a short-seller's report accusing the company of being a shell game plummeted APHA stock. It also sent ripples throughout the industry. This wasn't the first time that critics have questioned the legitimacy of cannabis businesses, and it won't be the last.What was especially damaging was that some of the accusations stuck. In the aftermath, high-level executives, including the CEO, resigned from their posts. Moreover, Aphria promised a line-by-line rebuttal of the charges, but they never came to fruition. Even now, management is coy about the matter. Essentially, Aphria is doing everything it can not to address this incident, which hasn't helped APHA stock.Of course, this is one of the riskiest names among marijuana stocks. Still, I can't get something out of my mind: current CEO Irwin Simon, who came over from Hain Celestial (NASDAQ:HAIN), is taking a serious reputational risk with Aphria. That he's willing to initiate the recovery process leads me to have some confidence in APHA stock. Aleafia Health (ALEAF)Source: Shutterstock At the end of our list of marijuana stocks to buy now, I'm going to present my most speculative idea. A healthcare enterprise focusing on cannabis-based therapies, Aleafia Health (OTCMKTS:ALEAF) levers a vast network of clinics and patients. And these stats have jumped to 40 clinics and approximately 60,000 patients with its all-stock acquisition of Emblem. Thus, ALEAF stock offers a valid fundamental case.However, that hasn't panned out so well in the markets this year. ALEAF stock is down over 20% YTD. Additionally, this is a true penny stock, with shares trading hands under a buck. Naturally, with such a cheap asking price, you can expect tremendous volatility. For now, that volatility has shoved ALEAF deep down in the gutter, Pennywise style.However, I still see some positives. For one thing, volume is relatively robust for such an offering. Second, it appears that ALEAF stock has found support around the 80-cent level. Of course, this is no guarantee considering the share price. But the combination of a sound business and a supportive political environment makes ALEAF a compelling gamble.As of this writing, Josh Enomoto is long HEXO and ALEAF. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post The 10 Best Marijuana Stocks to Buy Now appeared first on InvestorPlace.
When marijuana stocks were rising, many investors got caught up in the excitement and bought large quantities at high prices. At the same time, another group of investors who paid attention to money flows made significant profits. Just like a doctor who uses X-rays to see what is going on inside the human body, investors can do X-rays of marijuana stocks.
Cresco Labs is set to declare its second-quarter results after markets close tomorrow. As of yesterday, its stock had risen 29.6% year-to-date.
Linton said during a CNBC interview Tuesday morning the case for investing in Canopy's stock is based on a combination of cash on hand, the culture and a footprint that spans 16 countries and 4,000 employees. Linton is following his own advice and acknowledged he bought more shares of Canopy although he did not quantify his purchase. If I was that important to the company, the company is not that key," Linton said.
Canopy Growth Corporation (TSX: WEED)(NYSE:CGC) announced Tuesday it has gained Health Canada’s license for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. The KeyLeaf facility was recently adapted for Canopy Growth’s use, planning to start using it in the fall, extracting up to 5,000 kilograms of hemp or cannabis biomass daily. This is another step in Canopy Growth’s capacity expansion plan, as it aims to be more productive and to cut operational costs by the end of the year, the company reported.
Canopy Growth Corp. said Tuesday that Health Canada has awarded it an extraction license for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. The Canadian company, which is a market leader in the cannabis space thanks to a $4 billion investment from Constellation Brands Inc. , said the facility along with its Smiths Falls, Ontario site and recently licensed BC Tweed extraction site means it has three significant extraction assets to support development of new products. The Saskatchewan facility is expected to be online by fall of 2019 and to have the capacity to extract up to 5,000 kg of hemp or cannabis biomass a day. "This licence will ensure we have the supply of extraction inputs for the medical, CBD, and recreational markets, especially the next generation of value-add, high margin cannabis products here in Canada," Chief Executive Mark Zekulin said in a statement. Canada is gearing up to start offering edibles and other derivatives products in December. Canopy's U.S.-listed shares rose 2.9% premarket, but are down 0.6% in 2019, while the ETFMG Alternative Harvest ETF has gained 4% and the S&P 500 has gained 16.6%.
Former Canopy Growth co-CEO Bruce Linton says that he's taking advantage of the stock's big sell-off to buy shares. Should investors follow his lead?
Shares of Canopy Growth were rising after the company announced that it has received a license from Health Canada for its KeyLeaf Life Sciences facility in Saskatchewan. The facility is expected to reduce operational costs for value-add products that will be rolled out in the Canadian recreational and medical markets by the end of the calendar year. "With this milestone, we are executing against the vision of making strategic investments today in order to deliver results over the long term," said CEO Mark Zekulin.
So far in 2019, cannabis stocks have been on a roller coaster ride. Investors are wondering which marijuana companies may be better investments for the long term. If you are interested in buying into marijuana shares, you may also want to take a closer look at the ETFMG Alternative Harvest ETF (NYSEARCA:MJ). The MJ ETF is a marijuana ETF that has about $1 billion in assets under management.Source: Shutterstock Investing in the MJ ETF may enable investors to take a long-term view on a growth industry that is likely to reach tens of billions globally in a decade or two. However, investors in the cannabis sector should also remember how choppy individual stock prices that make up the MJ ETF can be. Mechanics of Investing in the MJ ETFInvestors may be able to decrease the volatility of investing in individual stocks by holding more of them, or better yet, investing in an ETF. And at InvestorPlace, my colleagues often cover how various ETFs can help investors construct a diversified portfolio.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSimilarly, MJ seeks to provide investment results that correspond to the total return performance of the Prime Alternative Harvest Index. This index tracks the performance of U.S. and global companies that are engaged exclusively in legal activities involving cannabis for medical or non-medical purposes. * 7 Great Small-Cap Stocks to Buy MJ's expense ratio is 0.75% per year or $75 annually per $10,000 invested. For many investors, the comfort in owning a basket of stocks might be worth the price.The MJ ETF also pays dividends with a yield of 2.8%. In recent months, this marijuana ETF has become one of the most popular funds among millennial investors.While the MJ ETF is still exposed to the industry risk, it may provide a good option for investors, as it is will likely be more stable than owning some of the individual stocks. Before investing in marijuana stocks, though, it is important to do your due diligence on the MJ ETF. Companies in the MJ ETFCanada is the second country in the world -- after Uruguay -- to legalize recreational marijuana at the federal level. Since then, a number of federally licensed Canadian cannabis producers have started trading on the Toronto Stock Exchange (TSE) as well as the New York Stock Exchange (NYSE).The MJ ETF currently holds 38 stocks with about 70% allocation to pot companies and growers, many of which are Canada-based and that are becoming increasingly mainstream. Several of the major stocks in the MJ ETF include Aurora Cannabis (NYSE:ACB), Cronos Group (NASDAQ:CRON), GW Pharmaceuticals (NASDAQ:GWPH), Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY) and Green Organic Dutchman Holdings (OTCMKTS:TGODF) It also has an allocation of tobacco stocks and fertilizer companies. The top 10 holdings represent about 60% of holdings in the MJ ETF.One fundamental point that investors need to keep in mind is that most of these cannabis producer stocks are not profitable yet. Analysts value them mostly based on the expectation of high revenue growth, which would lead to future profits. Therefore, whenever Wall Street fears the given company is failing to meet growth or expectations, that pot stock will get penalized.While MJ can avoid some of the bad performances of most marijuana stocks, it would be difficult for it to outperform several of its large holdings, such as Cronos Group, Aurora Cannabis and Canopy Growth. Nonetheless, the level of diversification helps make the MJ ETF more robust than any individual stock in the sector, limiting volatility and downside while retaining the exposure to the market's potential upside. Cannabis Industry in Canada is Still in the Early InningsThe lure of higher-than-average returns may be tempting for many pot stock investors. After all, early investors in many of these stocks have been rewarded handsomely.But as the cannabis industry in Canada matures, will the fundamental forces allow for high double-digit returns any more?The recent earnings reports from Canada-based pot stocks are important in gauging the health of the industry. At present, not everyone is convinced that Canadian recreational pot sales will remain strong. Many investors are concerned that the initial hype surrounding the industry could be decreasing.Since legalization in October 2018, Canadian sales numbers have been muted without any signs of increasing. In 2019, the total cannabis market in Canada, including both legal and illegal recreational and medical sales, is expected to be around $7.2 billion CAD. About half of it is likely to come from legal sales. The Canadian market may also be running the risk of being oversupplied. * 15 Growth Stocks to Buy for the Long Haul Is all this capacity truly needed, given that export volumes are not expected to meaningfully offset oversupply, either? If these marijuana companies harvest more than what they sell, there will be higher inventory balances. And simple economics tells us that a supply glut would eventually drive down the price of marijuana along with the margins of these companies. The developments in Canada over the past year has been reflected in the stock price of most of these Canada-based companies, moving investor sentiment from euphoria to greed to fear.Marijuana is illegal in the U.S. at the federal level. However, at the state level, its legal status depends on the laws of the individual state. In other words, the legalized marijuana industry is still in its infancy, even in Canada, and it is almost non-existent globally. None of the Canadian marijuana stocks have so far done any business in these pot-friendly U.S. states, as the listing requirements at the NYSE or NASDAQ as well as at the Toronto Stock Exchange bar companies from engaging in commercial activities in countries where they would be breaking the U.S. federal law. Where Is the MJ ETF Price Now?In the past two years, marijuana stocks have been choppy and highly speculative. Their valuations can and do change suddenly and drastically, both as a result of event-driven company news or developments in the industry.So far in 2019, with the exception of January, when many stocks did well, investors have witnessed considerable bearish activity in the industry. For most cannabis stocks as well as the MJ ETF, it hasn't exactly been such a "hot" summer. And the value of this particular marijuana ETF reflects this volatility. Year-to-date, the MJ ETF is up 5%. After seeing an intraday low of $23.3 on Dec. 24, 2018, it has rallied to a high of $39.25 on March 19. Its 52-week high remains at $45.4, reached on Sep. 19, 2018. Currently it is hovering around $26.Those investors who pay attention to technical charts should note that due to the decline in price since April, MJ ETF has a not-so-pretty technical picture. In the long run, MJ needs to build a base again before a long-term sustained leg up can occur.From a price and time cycle perspective, the high reached on March 19, 2019, which came six months after the 52-week high of Sept. 19, 2018, is likely to be the highest price to be seen in the near-term. And MJ price may see a new 52-week low in Sept. 2019, possibly around $22.5, about a year after the current 52-week high of $45.4. Within the next month, I expect MJ to mostly range-trade between $27.5 and $25.However, in case of a broader market selloff, similar to the one we have witnessed in the last quarter of 2018, the fund may easily go toward the low-$20's level. The Bottom Line on the MJ ETFFor most of the year, I have been bearish on most marijuana stocks. The hype that has led to high valuation levels, their mostly poor earnings and the dependency on the recreational aspects of cannabis make them risky and volatile investments.Given the risk involved with investing in cannabis, no ETF holding pot stocks is going to be completely safe in being able to avoid losses, but MJ offers investors some safety due to diversification.Now that the sentiment has swung negative, contrarian investors may find value in the MJ ETF. However, investors still need to follow developments in the industry closely to evaluate the appropriateness for marijuana stocks for their portfolio.It is important to note that unless legalization at the federal level in the U.S. happens, cannabis market is, for the most part, limited to the growth in Canada. And a limited Canadian market is not likely to help most of these pot stocks become profitable on an operating basis. This fact makes marijuana stock valuations even more difficult to justify. * 10 Cheap Dividend Stocks to Load Up On Therefore, MJ investors should be ready for daily price fluctuations as well as high volatility around the earnings release dates of the marijuana stocks that mostly make up the ETF. Most of these Canada-based weed companies also have high operating expenses. And the red ink at the bottom of their income statements, quarter after quarter, is becoming a worry for shareholders. If the international cannabis market does not grow as expected, then MJ ETF's price could also experience selling pressure.As of this writing, Tezcan Gecgil did not hold a position in any of the aforementioned securities.The post The MJ ETF Solves Some of the Problems of Pot Stocks -- But Not All of Them appeared first on InvestorPlace.
Canopy Growth stock has been praised by many analysts. Here’s what chart analysis shows about buying this marijuana stock right now.
It’s no question that the marijuana industry is a budding space. The industry saw $10.9 billion in sales last year, not including sales that occurred illegally. Not to mention analysts predict this figure could jump by anywhere between $50 billion to $200 billion over the next ten years. However, somewhere along the way things went awry for cannabis stocks. A few have actually seen growth slow with some being bogged down by supply-side issues and tax concerns in the U.S. That’s not to say that these stocks won’t see upside again, but investors will have to be patient and pay close attention to determine whether or not they can recover. Analysts from Wall Street’s top firms highlight 3 beaten-down cannabis stocks to watch. Let's take a closer look: Canopy Growth Corporation (CGC)Many investors are wondering what happened to Canopy Growth. The prominent medical cannabis company has taken a beating in its last two quarters, with growth becoming stagnant. In its most recent quarter, CGC reported disappointing Q1 results that didn’t just miss but rather failed to come close to consensus estimates. While the company posted quarterly net revenue of CA$90.5 million, up by more than 3x from the year-ago quarter, investors were not impressed as this result was well below the Street’s CA$109 million estimate. More bad news came when CGC reported its net loss widened to CA$1.3 million from CA$91,000 in the prior-year quarter. Management attributes the loss to a drastic drop in cannabis oil and softgel sales, plunging to CA$0.2 million from CA$36.5 million in Q4. While some have placed the blame on channel stuffing or filling distribution channels with more product than is needed, others have pointed to new competitors that have zeroed in on CGC’s market share.CIBC analyst John Zamparo believes that the latter is the case with Canopy. “We believe the decline amounts to an unsustainable market share from the onset of adult-use legalization, with competitors now having improved their offering,” he explained. (To watch Zamparo's track record, click here) The analyst does note that its backing from Constellation Brands (STZ) as well as its 15 upcoming clinical trials and 270 patents lends itself to strong long-term growth prospects. “We believe investors will need to show patience to allow Canopy to build its international presence as clinical trials and patents take time to play out and eventually give Canopy Growth an advantage versus peers,” Zamparo added. As a result, Zamparo reiterated his Outperform rating on CGC but did drop the price target from $80 to $50. All in all, the rest of the Street is cautiously optimistic about CGC. With 9 Buy ratings vs 6 Holds received over the last three months, the consensus among analysts is that this cannabis stock is a ‘Moderate Buy’. Its $44 average price target suggests 57% upside potential. (See CGC’s price targets and analyst ratings on TipRanks) Tilray Inc. (TLRY)The second cannabis stock on our list, like CGC, didn’t exhibit the level of growth investors wanted to see. While Tilray’s second quarter revenue gained year-over-year, its losses more than doubled from the year-ago quarter. The company has failed to generate a profit in the year since its IPO, with management warning investors that this won’t change anytime soon. Investors are especially troubled by TLRY’s international sales. It trails behind its competitors in this segment of the business and has shown only small sequential improvement. That being said, TLRY has made efforts to expand its reach in the Portugal market with the GMP certification of its facility in the country. TLRY is also expanding its access to the domestic market by opening more retail locations in key Canadian provinces, including Ontario. Additionally, the cannabis company stands to benefit from the launch of the Canadian cannabis derivatives market in October. Jefferies analyst Ryan Tomkins argues that while TLRY hasn’t quite achieved a turnaround yet, the company is taking steps in the right direction. “Continued recreational revenue increases and expected international medical sales pickup obvious positives, but still reasons for caution in our view,” the analyst explained. The analyst adds on a positive note that management stated oversupply was not pressing as they once thought, and quality supply was scarce, which led to investments in expanding their own facilities. It was also able to launch a new broad spectrum CBD product under the Manitoba Harvest brand in the U.S. As all of these factors have not quelled his concerns, Tomkins reiterated his Hold rating and $57 price target on TLRY stock.All in all, the rest of the Street mirrors the analyst’s cautious sentiment, with TipRanks analytics showcasing TLRY as a Hold. (See TLRY’s price targets and analyst ratings on TipRanks) The Green Organic Dutchman Holdings (TGOD)Lackluster second quarter results have put a dark cloud over this cannabis stock. On August 13, TGOD reported that its sales for the quarter totaled CA$2.8 million, falling well below the CA$4.6 million consensus estimate. It didn’t help that its cash dropped from CA$214 million at the beginning of 2019 to CA$69 million in Q2. That being said, one analyst believes that concerns regarding sales and cash flow have been blown out of proportion. Tomkins, who also covers TGOD, points out that its sales only include revenue generated from the HemPoland segment of its business. Once the company’s new Grower’s Circle launch extends beyond its pilot program, Tomkins thinks sales should get a boost. “Any disappointment is misplaced, in our view. We see sales strongly picking up from here and with costs under control, we think the company is well placed to hit its target of turning a profit by the end of Q1 2020,” the Jefferies analyst added. As a result, Tomkins reiterated his Buy rating and CA$6.50 price target.TGOD announced it had received a purchase order from Ontario as well as new supply and distribution agreements with the provincial boards Alberta Cannabis and BC Cannabis stores, which management hopes will bolster sales. While these positive developments have led some to believe that the tide is turning for the marijuana stock, not all analysts are convinced TGOD has pulled off a turnaround. (See TGOD’s price targets and analyst ratings on TipRanks)
Last week (ended August 16) was rough for Canopy Growth (WEED)(CGC) stock. It fell about 14% after the company's fiscal 2020 first-quarter earnings report.
Cannabis Countdown: Top 10 Marijuana Stock News Stories of the Week – Earnings SZN Edition Welcome to the Cannabis Countdown . In this week’s rendition, we’ll recap and countdown the top 10 marijuana ...
There's no sugarcoating the truth here. It has been an awful few weeks for pot stocks, particularly the cannabis market leader, Canopy Growth (NYSE:CGC). At the end of April, CGC stock was flying high above $50 - up 90% year-to-date, as investors were getting excited about Canopy's potential entry into the what-will-be-huge U.S. cannabis market. Two bad earnings reports later, the stock has come crashing down.Source: Shutterstock Today, CGC stock trades hands below $30 - nearly 50% off its late April highs, and up just 5% year-to-date, versus a 90% year-to-date gain back in April.If that's not a crash, I don't know what is. Indeed, the crash has been so bad that some bulls have thrown in the towel.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI get it. Stomaching a 50% crash over four months is not an easy thing to do. It does leave one feeling somewhat hopeless, dejected, and unwilling to double down.But, that's exactly what I'm doing here -- doubling down. Investors have to see the forest for the trees here. All this near-term volatility is just noise. Who really cares if Canopy grew sales by 200% or 250% last quarter? Or if gross margins were 20% or 25%? All that really matters is that Canopy continues to position itself as the profitable leader in what will one day be a multi-hundred billion dollar global cannabis market.Canopy is doing just that, and because they are, there is still visibility for Canopy to one day be a $50 to 100 billion company. CGC stock has a market cap of under $10 billion today. Thus, the long-term investment implication is simple: buy on weakness and hold for the long haul. Early Innings for Pot's Global GrowthWhen it comes to CGC stock, investors need to see the big picture here and if they don't want to do that, they probably shouldn't even be looking at the cannabis space at all. * 10 Stocks Under $5 to Buy for Fall The big picture here is that you have a cannabis industry that is in the top of the first inning of a multi-year, global growth narrative. Only one major developed economy has fully legalized cannabis (Canada), where it has been fully legal for less than a year, and that economy is considered one of the smaller fish in the global market. Judging the long-term fate of a cannabis company because they missed sales or earnings estimates last quarter seems … foolish.Doing so would be focusing on a tree. Instead, investors need to take a step back, and look at the forest. Here's what the cannabis forest looks like. There is an overwhelming amount of data out there which implies that cannabis consumption is: on a secular uptrend; nearly as pervasive as alcohol and tobacco consumption; and, in many instances, preferred to alcohol consumption among younger consumers.At the same time, governments around the world are becoming open to consideration of cannabis as a "safe drug" and are gradually progressing toward full legalization. Combining those two observations, the implication is clear: the global cannabis market will be fully legal one day, and when that happens, it will be huge -- like global alcohol and tobacco markets huge. Canopy Growth Stock Still Projects as a Long-Term WinnerThe global alcohol and tobacco markets are several hundred billion dollar to trillion dollar markets. The cannabis market will be that big one day.Each of those markets has also produced several $50 billion to $100 billion-plus companies. See Anheuser-Busch (NYSE:BUD), Diageo (NYSE:DEO), or Heineken (OTCQX:HEINY) in the alcohol world. See Altria (NYSE:MO) and Philip Morris (NYSE:PM) in the tobacco world.The cannabis market will similarly produce several $50 to $100 billion-plus companies at scale. Canopy Growth will be one of them.Even the company's former CEO, Bruce Linton, unceremoniously booted out last month as Canopy's co-CEO and board chair, told BNN Bloomberg he was a buyer of CGC stock after the shares fell on August 15.Right now, Canopy is the biggest cannabis company in the fully legal Canadian market. It also has the largest balance sheet, with the most cash firepower to increase production capacity, expand global distribution, penetrate other cannabis markets, and invest in next-gen product R&D -- overall, sustaining and expanding its leadership position.Canopy is doing all of those things. The company's harvest amounted to more than 40,000 kilograms last quarter -- no one else in this space even comes close to touching that number. Canopy has a deal to acquire Acreage once the U.S. market becomes fully legal, giving the company a clear pathway to penetrating the U.S. market. They also poured over C$8 billion into R&D last quarter. Competitor Tilray (NASDAQ:TLRY) spent less than $2 billion CAD ($1.5 billion) on R&D in the overlapping quarter.In other words, Canopy is doing everything it needs to do in order to be the Anheuser-Bush or Altria of the cannabis world. Big picture, that means CGC stock remains on track to have a $50 billion to $100 billion-plus market cap one day. The market cap today? Under $10 billion. For long-term investors who are willing to ride out the volatility, the implication is clear: buy on weakness and hold for the long haul. Bottom Line on CGC StockWhen it comes to CGC stock, investors need to see the forest for the trees.True, it has a caretaker CEO after Linton fell out with shareholder Constellation Brands (NYSE:STZ), but there are indications that Canopy is looking at candidates from the consumer, pharmaceutical, alcohol and even technology sectors, according to BNN Bloomberg. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond But put that aside for a minute. As well, forget today's depressed gross margins. They are depressed because Canopy is spending an arm and a leg to lay the foundation for long-term growth. Forget today's slowing growth trends. Growth is slowing because Canopy is more focused on maximizing long-term growth, not supercharging near-term improvements.Instead, understand that Canopy is laying the groundwork to become a $50 billion to $100 billion-plus company one day.I get that it's tough to do that on the heels of a 50% sell-off over the past four months. But, CGC stock is still up 5% since January 2019, 20% since January 2018, and 300% since January 2017. So, again, the best thing here is to zoom out and contextualize everything.When you do that, it becomes clear that Canopy is still a winning company, and that CGC stock still has tremendous long term potential.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Why I'm Still Bullish on Canopy Growth Stock for the Cannabis Long Term appeared first on InvestorPlace.
To be fair, it sure feels like no cannabis stock is offering refuge of any sort these days, but Canopy Growth (NYSE:CGC) really drives home that point as the shares labor more than 52% below their 52-week high. Using the strict definition of a bear market -- a decline of 20% from the most recent high -- CGC stock is in a bear market 2.5 times over.Source: Shutterstock It has often been noted that cannabis stocks require some patience on investors' part, but it has also been pointed out that Canopy stock is one of the names that tries investors' patience. For awhile, analysts and investors were willing to sacrifice cannabis companies' profitability for growth, but when Aphria (NYSE:APHA) recently turned a profit, regardless of the reason, the timetable for profitability in the cannabis space got moved up in a big way."Names who can show a route to profitability (or are there now) have the greatest likelihood attracting near-term investor interest," Jefferies analyst Ryan Tomkins said in a note.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's clear that investors will only prioritize growth for so long. It's becoming evident that profits, or at the very least, substantial revenue growth, are essential for cannabis companies to keep investors engaged. Tick Tock …Remembering that Canopy was the first well-known marijuana firm to ink a partnership with a big-name company, Constellation Brands (NYSE:STZ), and that it has a solid lineup of brands, such as Tweed, Spectrum Therapeutics, DNA Genetics, Doja and Maitri, makes the profitability all the more frustrating. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Some of Canopy stock's woes are self-inflected. There has been upheaval in the C-suite and little clarity on when the company will stop losing money. By some estimates, CGC will not show earnings before interest, taxes, depreciation and amortization until a year from now. And even then, investors should rightfully nitpick because EBITDA is a non-GAAP metric. The forecast for when Canopy will be truly profitable is far longer."Finally, we are aligned with Constellation Brands in the expectation that our consolidated operations will begin to deliver positive net income in the medium term that is within three to five years," Canopy CEO Mark Zekulin said on the company's recent earnings conference call.With Canopy stock trading at its lowest levels since January, the company can't have execution missteps as it had in the second quarter. As Zekulin pointed out on the conference call, Canadian customers were craving high-THC products in the quarter, but Canopy didn't have enough supply. Bottom Line on CGC StockExecution problems can be rectified, but when it comes to Canopy stock, there is some pause about the company's lack of execution in its home market of Canada, particularly as CGC has its eyes set on the lucrative U.S. market."Over the past two quarters, we have established offices in California and Colorado, and we'll soon be establishing offices in Illinois and New York," Zekulin said on the call. "We are currently involved in high-level discussions with key retailers in the United States, including being constructively involved with them as we collectively navigate the regulatory process. These investments in the U.S. CBD markets are significant."Canopy noted operational improvements in European markets including Germany, Poland, the Czech Republic and the United Kingdom.If Canopy Growth can show some operational excellence in the U.S. and those European markets, it would go a long way toward allaying investors' fears. Butt the bottom line is that revenue must increase and losses must decrease.As of this article, Todd Shriber does not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Canopy Growth Stock Is Not the Place for Near-Term Cannabis Refuge appeared first on InvestorPlace.
Among marijuana equities, Hexo (NYSE:HEXO) stock continues to gain increased attention. An alliance with Molson Coors (NYSE:TAP) and a solid base of business in its home province of Quebec have bolstered its business. Also, it looks poised to establish another niche once Canada legalizes cannabis-infused beverages.Source: Shutterstock However, departures in top management and a possible violation of advertising regulations have hurt the company. Moreover, the overall industry has suffered as supply has increased and more investors have questioned inflated valuations.Hence, for the Hexo stock price to rise, investors need both a solid floor and a catalyst.InvestorPlace - Stock Market News, Stock Advice & Trading Tips HEXO Is Outside of the Top Tier, But CompellingOver the last year, it has become clear that Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), Cronos Group (NASDAQ:CRON), and Tilray (NASDAQ:TLRY) have emerged as the market leaders in Canadian marijuana. However, many investors missed the run-up in these stocks and have sought a leader among the alternatives.Some see that as Hexo stock, but that strategy faces some challenges. Our own Luke Lango does not think Hexo will survive an inevitable industry shakeout. His prediction could easily come true. I also agree that most of the smaller marijuana stocks will disappear. * 10 Cheap Dividend Stocks to Load Up On However, investors can make money in such stocks. Strangely, my best returns in trading marijuana stocks came from charting the moves in the beleaguered CannTrust (NYSE:CTST). My caution in making sure a floor truly is a floor saved me from getting back in as their scandal came to light. Has Hexo Stock Bottomed?Still, Hexo stock may have established such a bottom. In a recent article, I told investors to stay away until "it found a floor," not fully realizing at the time that it might have bottomed in the $4 per share range. InvestorPlace contributor Mark Putrino outlines how HEXO stock has built support at that level. Since finding this bottom, HEXO has risen slightly to the $4.40 per share level.HEXO has now become my favorite among the aforementioned "other" marijuana stocks. Yes, they may have pushed the envelope by advertising on Snap's (NYSE:SNAP) platform. Also, departures in the C-suite have made some investors nervous. However, I like that it holds a 30% market share in Quebec, the province that is home to 20% of Canada's population.In this market, the catalyst that could boost the Hexo stock price has not yet become apparent. However, it has built a partnership with Molson Coors that could eventually bolster the stock.This alliance offers two key benefits. It could help to make Hexo a leader among cannabis-infused beverages once Canada legalizes those drinks. It also gives HEXO a segue into the U.S. This will offer benefits as both individual states and the federal government loosen restrictions. Should I Buy Shares?To profit from Hexo stock, investors need both a floor and a catalyst. For one, investors must become convinced that the floor truly is a floor. Nobody on the outside can credibly rule out a CannTrust-like scandal in any marijuana stock. However, barring that uncommon scenario, HEXO appears to have established that support at the $4 per share level.I should add that I also see the bottom holding in case more multiple compression occurs. For next year, analysts estimate that revenues will range between 185.7 million CAD ($139.8 million) and 398.3 million CAD ($299.9 million). This would mean a price-to-sales ratio of between 3.7 and 7.8 at the current $4.40 per-share price. That appears high by S&P 500 standards but comes in well under most marijuana stocks.I also think one problem with Hexo stock involves an industry factor outside of the company's control. After a shortage last fall, Canada now finds itself in a supply glut for dried flower. This challenges both Hexo and its peers to find a way to increase demand. That "way" could come later this year with cannabis-infused drinks.Some believe Hexo stock will not survive an industry shakeout. However, I think both the Molson Coors alliance and the market share in Quebec almost ensure such a scenario happens through a buyout instead of a bankruptcy. This gives investors yet another reason to look at HEXO.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Hexo Stock Needs Just Two Things to Move Higher appeared first on InvestorPlace.
Cannabis companies that have made acquisitions at the height of excitement about Canadian legalization last year may be facing some big goodwill writedowns.
Canopy Growth didn't impress investors with its earnings for the first quarter of 2020. The stock has fallen 12.4% since the company's earnings.
Former Canopy Growth CEO Bruce Linton discusses why he's still investing in cannabis, what he thinks is next for his former company, and his future plans. He joins Yahoo Finance's Zack Guzman and Heidi Chung to discuss.