|Bid||41.10 x 1000|
|Ask||41.18 x 1100|
|Day's Range||40.45 - 41.65|
|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|
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.
The long-term prospects for Cronos Group (NASDAQ:CRON) stock look good. That is, if you ask CRON stock fans. There is almost no convincing them otherwise. Critics of Cronos Group stock and the whole industry can offer smartest arguments to prove that the cannabis stocks are headed for disaster, but it will all fall on deaf ears.Source: Shutterstock The bullish thesis for the industry is so vague and the scope is so widespread that it's almost impossible to kill it this year. It is a multi-headed beast where if the bears chop off one head, many others will stare them down with sharp teeth.Don't take my word for it, just consider the scoreboard. CRON is up 64% year-to-date -- leading the pot stock pack. The ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is up only 30%. And I say this while I chuckle because that's still double the S&P 500 performance for the same period. So CRON is up four times more than the S&P.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Growth Stocks That Could Be the Next Big Thing This is similar to how it was for Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) in their infancy stages. This is also very similar to the current situation with Beyond Meat (NASDAQ:BYND) and even Uber (NYSE:UBER). The bullish thesis for these types of pioneer stocks is too vague to try too short this early.This is not the same as saying that I drank the Kool-Aid think pot stocks will be as successful as AMZN long term. I am merely saying that it's too early to short them. Trading CRON StockSo do I go all in on CRON? No, but still this all depends on individual time frames and risk appetites. One thing is for sure, pot stocks make for great short-term trading vehicles so CRON has opportunities on both the upside and downside. Those who believe in it long term, this is as good as any to buy at least half their position. It is futile to wait for a perfect sign to enter.Mid term, I favor the upside potential through the rest of the year for CRON stock because it established a solid band of support. Since January of 2018, $14 per share played an important role. It served as a major pivot point, so it is an area where bulls and bears are consistently eager to fight it out hard.This creates congestion so it becomes a sticky zone. And since CRON stock price is above it, the bulls can use it as solid footing. Meaning onus is on the bears to break that. Otherwise, every dip towards it is a buying opportunity. Sustaining the selling then becomes almost impossible.So this leaves us with evaluating the upside potential at hand. Earlier I mentioned that there are shorter- term time frames to trade. Above $18 per share, CRON will invite momentum buyers to launch a $4 rally from there. There will be resistance near $20. This sounds like a wild statement, but it is doable for such a momentum stock.I also noted that the $14 per share zone is a long term pivot, but so is $16. Specifically for this year, it served as a major point of contention. So I expect $16 to be the immediate support. For those who like to sell credit put spreads to generate income, that would be a good short-term level to consider.Conversely, there is risk below especially due to trade uncertainties. So we are vulnerable to geopolitical headlines to cause sporadic selloffs. If Cronos stock fills the gap below and falls below $13.5 per share, it could trigger a $2 overshoot. While this is not my forecast, it is a scenario that exist below. The Bottom Line on Pot StocksIt is also important to note that I am not a super fan of the whole cannabis sector. But I do recognize that it's a tough short.This is a brand new industry to Wall Street, and marijuana still illegal at the federal level in the U.S. So it has everything going against it. Yet pot stocks still have so much support from everyone from retail investors to mega corporations. Constellation Brands (NYSE:STZ) and Altria (NYSE:MO) were the first two to dip their toes in the water by throwing billions at Canopy Growth (NYSE:CGC) and CRON so we know that they are the best leading cannabis companies.This is just the beginning.Dozens more companies are waiting and trying to figure out how they can also grab a piece of this pie. We all know about the popularity of recreational pot. But there are the slew of other applications that are extremely interesting. Mainly medicinal, edibles, and portables. There is a strong consensus that people will be drinking pot-infused drinks instead of soda, beer or wine. * 7 High-Quality Cheap Stocks to Buy With $10 I am not here to judge whether this is a realistic goal; it's definitely not in the very near term, but it's not out of the realm of possibilities. So the theoretical addressable market is literally incalculable. So what are the bears shorting? Without any negative headlines Cronos stock is going higher.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post Cronos Group Stock Is Just Getting Started appeared first on InvestorPlace.
There's a reason why Canopy Growth Corporation (NYSE:CGC) could be one of the first marijuana stocks to be a real winner in the race to profitability. The reason is simply that Canopy is forward thinking with its various moves. Initiatives like its mega-sized deal with beverage giant Constellation Brands (NYSE:STZ), partnerships into the burgeoning pet care market for CBD and its recent buyout of U.S.-focused Acreage Holdings have made CGC stock the king of the marijuana hill.Source: Shutterstock All have been designed to take CGC-grown products and get them into as many users as possible. They're also great for providing Canopy with plenty of extra funding. Which is why its latest move may be absolutely perfect for investors.Canopy is seriously considering placing its greenhouse assets into a real estate investment trust (REIT).InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe benefits to doing that could be a huge win for both CGC, its shareholders and potentially the shareholders of the REIT itself. In the end, it's just another example of how Canopy Growth could be the only marijuana stock you need to own. CGC Stock Looks to Monetize Its AssetsThanks to their vice-like nature, cannabis companies have had to get creative to when it comes to raising capital. Most banks won't lend to them and it's only recently that a few of them have been able to tap the debt markets with any success. And here, none have issued a straight corporate bond, they've all been convertible or hybrid debt deals. For Canopy, this has meant running a pretty conservative ship with low leverage and high assets on its balance sheet. * 10 Stocks That Every 30-Year-Old Should Buy and Hold Forever In order to fund its expansion efforts, it has turned to deals like its partnership with STZ. That gave CGC a cool $4 billion to play with, while Constellation gets access to Canopy's products for sale. But there are other ways to get needed funding, especially if you are asset rich.To that end, CGC may be looking into a vehicle to hold its vast portfolio of greenhouses, processing facilities and other real estate assets. We're talking about a REIT.In essence, REITs are a specialized tax structure designed to hold real estate assets. As long as they pay out 90% of their cash flows as dividends to investors, they are allowed to avoid the double taxation on dividends. Investors love them as this tax structure allows REITs to yield in the 4% to 7% range. Their cash flows are secured by the rents paid by their tenants. It turns out a greenhouse to grow marijuana is really no different than an office building or apartment. Someone rents the building and then cuts the landlord a check every month.For CGC, this could be a great way to monetize its more than 5 million square feet of growing space. Canopy would mostly do a sale-leaseback transaction. This transaction would provide Canopy a huge initial cash infusion as it places these warehouses into a REIT and sells off the shares to the public. It would then rent its warehouses back from the REIT.This sort of deal to monetize a firm's vast real estate assets is actually pretty commonplace. Troubled retailer Sears spun-out its holdings as Seritage Growth Properties (NYSE:SRG) to raise cash. Darden Restaurants (NYSE:DRI) placed roughly 240 of its restaurant sites Four Corners Properties Trust (NASDAQ:FCPT).And while tax-free REIT spin-offs are now verboten by the IRS, they can happen in Canada and sale-leasebacks are still cool here in the U.S. In fact, CGC buyout target Acreage Holdings recently agreed to sell cannabis REIT GreenAcerage Real Estate. Incidentally, Acreage -- and now Canopy -- owns a 20% stake in GreenAcerage. CGC Stock Investors Would Win As WellBut it's not just Canopy Growth that benefits in this sort of transaction. Investors will benefit as well.For one thing, a REIT spin-off/sale brings in plenty of cash to CGC for expansion efforts. The firm estimates that the assets could be worth a "couple billion dollars." Canopy is looking to expand into the U.S. and Europe as the legalization of cannabis comes to fruition. That includes building out at least seven hemp processing facilities within the next 12 months. This will allow it to build scale, expand geographically and actually make the most out of its deals with Constellation and others. After all, it needs to the pot to sell. * 7 U.S. Stocks to Buy With Limited Trade War Exposure Secondly, the spinout itself could be very beneficial to investors. Last summer, CGC completed the spin-off of its venture capital investment arm: Canopy Rivers Corporation. That spin-off has and did very well after being cut free and CGC was able to raise some much-needed capital. However, a Canopy REIT could do much better. Just look at the returns for cannabis-REIT Innovative Industrial Properties Inc (NYSE:IIPR). It has doubled since the start of the year and pays a good 1.83% yield. There's no reason to believe that a REIT by the marijuana stock wouldn't have those kinds of returns behind it. CGC Continues to Be At the ForefrontNow, Canopy hasn't officially announced that it's doing this, but it has mentioned it now twice this year alone. And considering that Acreage Holdings has already undergone a similar transaction and Canopy has done spin-outs before, there's a good chance that CGC will do this sooner than later. When it does, it'll be another prime example of why the firm is one of the best in the marijuana sector.It keeps making forward-looking moves that will benefit investors for years to come. Its REIT plans are just another example of this and CGC stock remains a great long-term buy.At the time of writing, Aaron Levitt did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post This Is Why a REIT Could Be Great for Canopy Growth Stock appeared first on InvestorPlace.
Canopy Growth Corporation (CGC) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Operating results for the largest pot stock in the world are due out next week -- here's what you need to know.
On CNBC's "Mad Money Lightning Round," Jim Cramer said he likes Yeti Holdings Inc (NYSE: YETI ) very much. He believes the stock is undervalued and he sees it as a long-time hold. Daktronics, ...
Canopy Growth Corporation (CGC) closed at $42.95 in the latest trading session, marking a -1.85% move from the prior day.
Canadian cannabis company Canopy Growth Corp (NYSE: CGC) is weighing its options for non-equity financing as it looks to expand to take advantage of market opportunities in the United States and Europe. Possibilities for the company — the world’s largest cannabis firm — include setting up a real estate investment trust, as well as secured financing, the company’s new CFO Mike Lee told Bloomberg News in an interview. “We’re ... digesting the multiple options that we have in front of us, and comparing that to our business plans over the next few years,” Lee said.
The cannabis sector traded mostly lower Tuesday, with the ETFMG Alternative Harvest ETF down 1.0% as 24 of 38 components traded lower. The Horizons Marijuana Life Sciences Index ETF dropped 1.4%, with 43 of 57 components falling. The declines come the ETFMG ETF gained 4.6% and the Horizons ETF advanced 5.5% over the past two sessions, while the S&P 500 tacked on 1.5%. Among some of the more-active pot stocks, Aurora Cannabis Inc. fell 2.6%, Canopy Growth Corp. shed 2.1%, Cronos Group Inc. gave up 2.5%, Tilray Inc. slumped 5.3% and Canopy Rivers Inc. lost 1.4%. The ETFMG ETF has now lost 10.3% over the past three months, while the S&P 500 has gained 3.7%.
While earnings season is all but over for most stocks, for the cannabis business, it's only beginning. On June 20, Canopy Growth (NYSE:CGC) will kick off a spate of quarterly reports from the industry, forcing owners of CGC to serve as proverbial guinea pigs.Source: Shutterstock "Because it's the biggest, there'll be a follow-the-leader type action, so a strong result will lift all boats," explained Korey Bauer, the portfolio manager of the Cannabis Growth Fund (CANNX). He went on to say: "Investors will be looking closely at price and margins as everyone adjusts their numbers based on what the big companies are doing." * 7 Dark Horse Stocks Winning the Race in 2019 Marijuana mania is still alive and well, and the owners of marijuana stocks are capable of putting a positive spin on clearly disappointing news. But as the realities of legalized cannabis, both good and bad, set in, investors are slowly but surely beginning to treat these organizations like companies that will sooner or later have to turn a profit.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, the top and bottom lines are arguably the least important data nuggets for the owners of CGC stock. Other metrics are going to be much more telling indicators of how healthy Canopy Growth is becoming. Canopy Growth's Earnings OutlookThe initial and overarching response to next week's Q4 and full-year results, of course, will be driven by the company's sales and income levels.As of the latest look, analysts are, on average, calling for revenue of $90.9 million (in Canadian dollars), up from the year-ago figure of $22.8 million. As far as earnings, analysts, on average, believe Canopy Growth is on pace to report a loss of 23 cents per share of CGC stock, narrowing the year-ago operating loss of 31 cents per share.The heroic growth is entirely due to timing.Canada legalized marijuana for recreational use in October of last year, jump-starting strong sales for several organizations that had long been prepping for that day. As a result, the year-over-year revenue jumps will look artificially impressive until after October 2019.That said, sequential progress still counts. Canopy Growth generated sales of $83 million in Q3, with the bulk of the 256% boost coming from surging sales of recreational cannabis, which now makes up more than two-thirds of the company's revenue. Canopy Growth lost 22 cents per share in Q3. 3 Things to WatchWhile a large number of investors will certainly be eyeing CGC's sales and profits, most of the so-called smart money will be looking at the less-touted data that may more directly foreshadow the company's future. Three numbers will mean more than any others.1.Average Selling PriceSince Q3 was Canopy Growth's first as a seller of recreational marijuana, the year-over-year comparison won't be too telling. But the company was able to sell recreational marijuana at a price of $6.96 per gram.To its credit, per-gram prices for its medicinal cannabis were up year-over-year. With marketwide prices still falling as cannabis becomes more commoditized, however, price matters.2.Production CapacityIn Q3, Canopy Growth had access to 5.6 million square feet worth of growing capacity. Full use of that square footage could translate into output of more than 500,000 kilograms of cannabis per year. That would make CGC Canada's second-biggest grower,Investors may want to listen carefully to any updates on or changes to that number.3.Operating ExpensesFinally, while investors have yet to balk at CGC's spending, the slow realization that cannabis is a commodity has at least put some focus on its spending habits. During the upcoming earnings report, the owners of CGC stock could question, for the first time, whether all of the company's operating expenditures are absolutely "worth it."On that note, while revenue nearly quadrupled in Q3, sales and marketing expenses more than quadrupled, while general and administrative spending soared 400%.There's still a chance Canopy can cost-effectively scale up, but it certainly hasn't yet. Its operating expenses don't include the cost of acquisitions. Other Upcoming Cannabis ReportsThough Canopy Growth has some major news coming up, the owners of CGC stock aren't the only investors on pins and needles. Hexo (NYSEAMERICAN:HEXO) is also expected to post its quarterly numbers later this month.Some time will pass before the next big cannabis earnings report, though. Aphria (NYSE:APHA) could post its results sometime in July, as could OrganiGram Holdings (NASDAQ:OGI), given the timing of its previous quarterly reports. The same criteria increasingly being used to judge Canopy Growth will also be used to judge other cannabis companiesAs of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post 3 Things to Scrutinize in Canopy Growth's Earnings Report appeared first on InvestorPlace.
Since my last write up on Aurora Cannabis (NYSE:ACB) stock, the price action has not gone perfectly my way. But that doesn't mean that the trade is dead or wrong. In fact, nothing fundamental has changed since then. So today I will make the argument that it has fallen into support so the point is more valid now. And therein still lies opportunity.Source: Shutterstock For the same reasons as a few weeks ago, if I am long ACB stock I stay in my shares. This is still a good time to bet on the long-term prospect of this industry. I consider this a speculative bet so the high risk trade rules apply.In defense of my prior write up, the whole equities market fell off a cliff thereafter. So the dip in ACB stock was not due to any fault of its own. Case in point the S&P 500, Canopy Growth (NASDAQ:CGC), Tilray (NASDAQ:TLRY) and the ETFMG Alternative Harvest ETF (NYSEARCA:MJ) charts all resemble that of ACB. So I am still bullish on the stock within the same contexts as before.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSo let's first reset the fundamentals. ACB Stock's FundamentalsThe overall thesis for cannabis stocks is hard to kill now. This is much like the story was for Amazon (NASDAQ:AMZN) and Netflix (NASDAQ:NFLX) in their early stages. Many have tried to short them, but they left a long line of blown up short accounts. * 7 Dark Horse Stocks Winning the Race in 2019 When a concept is so new, the exuberance around it is vague. So even if the naysayers shoot down some aspects of it, there usually are many other positive points that the bulls continue to grasp.For example, those who doubted Amazon in the beginning assumed that it was a retail trade that competes on margins and that it had no hope of profits. Both accounts sounded like solid bearish thesis, but they were both wrong. AMZN now owns the cloud which powers the new technical world and it's as profitable as it wants to be.This is the case with ACB … but not so much from the profitability angle. My point is that there is so much potential from the marijuana stocks -- Yes, I called a marijuana stock -- that I think it's short-sighted to assume they are now expensive.First, I think it's a mistake to limit the scope of Aurora's future areas of operations. Second, I think that valuation here is insane, as it is has no bearing on the future. These are growth companies that are trying to establish a new legal existence on Wall Street where there wasn't one.Moreover, cannabis is still illegal in the U.S. at the Federal level so the whole sector still has tremendous headwinds. Consensus is that eventually the U.S. will legalize cannabis like Canada and that should fuel another frenzy into the sector and its stocks. This is the sentiment part but it also has an actual tactical effect.So far, the official interest from traditional companies has been limited. We have seen intrepid companies like Constellation Brands (NYSE:STZ) and Altria (NYSE:MO) invest in CGC and Cronos (NASDAQ:CRON) respectively but the rest maybe be standing by because of the legal concerns around pursuing the potential investments in pot and its vast array of applications.This brings us to the future potential. It seems that there are as many applications as there are opinions. The recreational use is the dominant magnet to it, but there are legitimate medical uses too. Then there is the in-between zone of edibles and drinkables.Experts speculate that drinking pot-infused potables will challenge alcohol uses. Experts tout it being healthier with fewer adverse effects than alcohol. This is a concept that has yet to be commercial, but the edibles are already popular so that could serve as an example of the adoption ramp.All this is to say that the future looks bright. At least it doesn't look as grim as the bears argue. This is so very different than saying that Aurora stock is a bargain. It's definitely not from the traditional sense. It sells at a massive multiple to its sales. But again this is not a traditional stock so there is no measuring stick to properly judge value. Besides, for industries this young, current "value" is not the stick to measure viability.Technically, ACB stock is very tight and a move is coming. It has been setting lower highs and higher lows coming to a point. Moreover, the area around $8 where this battle is ongoing has been a pivot almost since its IPO.Such zones in contention often resolve themselves with a big move in either direction. But recently the momentum is on the side of the bulls. If ACB closes above $8.25, there is should invite momentum buyers to target $9 per share where the next major battle will happen.I expect resistance there, but also a much bigger potential rally if the bulls can prevail again. Then rinse and repeat this same action at $10.30 per share.Of course that the bears could win this tight situation here but we do have proven support that has held through two earnings reports. And this is a strong statement for such a momentum stock inside a very controversial industry.The bottom line is that the bears have all the reasons to shoot this stock to its lows, yet here it is still up 48% year to date and 400% overall. There is no new development to mar the ongoing bullish thesis. So the default direction is still up and it's best to bet with the bulls.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room free here. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post Aurora Cannabis Stock's Bull Thesis Is Alive and Well appeared first on InvestorPlace.
Shares of Zynerba Pharmaceuticals (NASDAQ:ZYNE) are surging Tuesday after the company landed a patent for the treatment of autism spectrum disorder. Specifically, the patent covers treatment using cannabidiol, which will surely add a spark to ZYNE stock.Source: Zynerba PharmaceuticalsThe stock was up 8% in pre-market trading and there's potential for this name to run even further once investors catch wind of it. We're seeing that play out now, with shares up 18% in Tuesday morning trading.With a market capitalization just under $250 million, it's not a well-known player like Biogen (NASDAQ:BIIB) or Celgene (NASDAQ:CELG). In the same light, it's not even a well-known cannabis stock, like Canopy Growth (NYSE:CGC) or Aurora Cannabis (NYSE:ACB).InvestorPlace - Stock Market News, Stock Advice & Trading TipsZynerba was issued U.S. Patent No. 10,314,792, which is titled, "Treatment of Autism Spectrum Disorder with Cannabidiol" and runs through 2038. So if the treatment is successful, ZYNE stock will have the rights to this treatment for almost two decades. The PatentZynerba is building out a portfolio of different treatments based around its potential cannabidiol product Zygel. I say "potential" because there's still a lot of work and progress needed before this becomes a staple in the medicine cabinet, so to say. * 7 Dark Horse Stocks Winning the Race in 2019 The patented treatment "includes claims directed to methods of treating autism spectrum disorder by administering a therapeutically effective amount of synthetic cannabidiol." It was granted during the enrollment period of a Phase 2 BRIGHT study, which is intended to evaluate "the safety, tolerability and efficacy of Zygel for the treatment of children and adolescents with Autism Spectrum Disorder."Will it work? At this stage it's impossible to say, but there is promise. GW Pharmaceuticals (NASDAQ:GWPH) has successfully gained traction -- even here in the U.S. -- with its cannabidiol treatment for epileptic seizures. So if Zynerba can show similar successes with its treatment, it may open the door to other possible treatments in the future using its Zygel product. Trading ZYNE Stock Click to Enlarge The big boost in ZYNE stock comes as little surprise. After all, it's got all the right buzzwords working in its favor, even if the company has good intentions. Wall Street latches to these trends and investors aren't afraid to jump on board if they think there's opportunity. That's even as Phase-2 testing has yet to begin.ZYNE stock chart is one of only a few that could make a double-digit gain look fairly modest. Above you can see how it moved over downtrend resistance (blue line) on Monday. Now it's pushing through $13, as well as the 20-day moving average.Can this thing ignite through $14 and tag its 2019 high near $16.50? Yes, it can. There's no guarantee that it will, but these sort of momentum boosters can give a huge shot in the arm to small-cap stocks.Whether that justifies a move this powerful, ZYNE stock investors certainly have a reason to be excited. But there's a lot of room on the upside before Zynerba stock exhausts itself.On the downside, I want to see $11 to $11.50 hold as support.This marks the 50-day moving average (which is trending higher) as well as the 38.2% retracement. That said, it would be highly discouraging to see ZYNE stock lose all of Tuesday's gains. Bottom Line on ZYNE StockNorth of $13 and the 20-day would be best, but let's see how it trades throughout the day and the rest of this week.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long CELG. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post Zynerba Stock Soars on Cannabidiol Patent for Autism Spectrum Disorder appeared first on InvestorPlace.
Despite the market's hearty rally last week wasn't a good one for Aurora Cannabis (NYSE:ACB) because Aurora stock is stuck in a technical downtrend.Source: Shutterstock Even as a number of stocks in the cannabis industry were bouncing higher as well, the recent underperformance vs. the overall market has investors wondering if Aurora is set to breakout or breakdown.Late last week, Stifel analysts initiated Aurora Cannabis stock with less-than-enthusiastic coverage. They slapped a hold rating and a C$10 price target on ACB ($7.47 USD). From current levels, that implies a slight downside but not much. At the very least, some investors may read that as a positive note. After all, it could have been a sell rating with a target that implied a big downside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dark Horse Stocks Winning the Race in 2019 Still, it doesn't paint the most optimistic picture. The analysts argue that Aurora's "international medical-use growth opportunities are limited outside of Canada and Germany." They remain cautious as ACB due to execution concerns and the company's "lack of definitive strategy."So what do the charts say? Trading ACB Stock Click to EnlargeShares of Aurora stock are stuck in a tough downtrend (blue lines), with channel resistance squeezing it lower. Last month the 20-day and 50-day moving averages began acting as resistance, while Aurora is flirting with losing its 200-day moving average as well.Once ACB stock lost the $8.25 to $8.50 area last month, more selling pressure took hold. This area was resistance from October through March, but after turning to support it looked as if it would buoy the name going forward. Keep in mind, Aurora had just about doubled from the start of the year through mid-March.So what now?I'm watching a few key areas in the short term, starting with the 200-day. If this area turns from Q1 support to Q2 resistance, there will most likely be more downside to Aurora Cannabis stock. If ACB can reclaim this level, it will set up an important test with resistance. The only problem? Resistance sits between $8.10 and $8.60 and is trending lower. That's where investors will find the 20-day and 50-day moving averages, as well as channel resistance.Below the 200-day, and the 61.8% retracement at $7.29 will be an almost immediate focus. If it fails as to boost Aurora Cannabis, channel support will soon be called upon near $7.So is a breakout or breakdown coming for ACB stock? Until we first see how it handles some of these key levels, we won't have our answer, unfortunately. However, breaking out of this channel can trigger a big move in either direction. For that reason, these are must-watch zones for Aurora stock investors. Until they give way, ACB can remain channel bound. Bottom Line on Aurora StockI consider the cannabis space industry very interesting. On the one hand, it's moving impressively fast with regulation, public acceptance and corporate revenue. That's not to say there won't be bumps in the road, only that it's moving very quickly in the right direction. That said, despite this explosive growth, it's very much a long-term play. That's because the valuations are pretty large already.Take Aurora Cannabis for instance.ACB stock commands a market cap of almost $8 billion, while full-year estimates for fiscal 2019 revenue stand just under $200 million. That leaves Aurora trading at 40 times this year's revenue. Although on the more bullish side, estimates also call for $500 million in sales next year. That's a more palatable 16 times current sales but would also assume that the stock price stays flat over the next 12 months.So in a way, Stifel's coverage makes sense. The stock has upside provided a few things continue to play out. More states and countries need to continue down the regulatory approval path, while Aurora stock needs to execute on its opportunities. Lastly, it needs to show a path to profitability, while continuing its stunning revenue growth over the next few years.That really goes for more companies besides Aurora stock too. Almost all cannabis plays need to. That includes Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aphria (NYSE:APHA), Cronos Group (NYSE:CRON), New Age Beverages (NASDAQ:NBEV) and others. Let's see if they can deliver.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post Here's What Needs to Happen for Aurora Stock to Break Out appeared first on InvestorPlace.
Broader markets received somewhat of a shock to the system in early May when President Trump announced that the U.S.-China trade dispute was far from being resolved any time soon. And many sectors have been choppy in the fast few weeks. One stock that has been in a downtrend since late April is Canada-based Canopy Growth (NYSE:CGC), a front-runner of the marijuana industry (MI).Source: Shutterstock As pot stocks are giving back some of their big gains from the last 12 months, it's quite hard to predict which stocks in the industry will perform well in this volatile market. CGC stock is expected to release Q4 fiscal 2019 earnings on June 20. Last quarter saw CGC's earnings come in significantly below expectations. And the stock is seeing weakness after a strong start to the year. Now that the reporting season is fast approaching, let's look at what may be next for the Canopy Growth stock price. Long-Term Tailwinds for Canopy Growth StockAs a diversified cannabis and hemp company, Canopy Growth is Canada's largest pot stock by revenue and market cap. It started trading on the Toronto Stock Exchange (TSE) in August 2016 and got a dual listing at the New York Stock Exchange in May 2018.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 A-Rated Stocks to Buy Under $10 The global legal marijuana market size is expected to be over $65 billion by the end of 2025. Yet at present, the legalized MI is still at its infancy in Canada and almost non-existent globally. In December 2018, marijuana producers and investors cheered when the U.S. legalized hemp and hemp-derived ingredient cannabidiol (CBD), the non-psychoactive ingredient of marijuana.CBD is especially popular among consumers seeking relief from physical pain as many believe that CBD provides most of the health benefits of medical marijuana. Because hemp is now an ordinary agricultural commodity, Canopy Growth has obtained a license to process and produce hemp products in New York State.Canopy Growth is hoping become one of the first marijuana producers to have its products in the U.S. market through its partnership with the NY state-headquartered alcoholic beverages giant Constellation Brands (NYSE:STZ) which has already invested $4 billion into CGC stock.The two companies are currently developing cannabis-infused beverages for Canada, where experts believe they will be legal by 2020. This legalization of edibles is likely to act as a powerful catalyst for the major cannabis companies.Although it is too soon to predict how the legal hemp production in the U.S. will affect CGC's bottom line, Canadian leaders like Canopy Growth are likely to become the first ones to be positively affected by major North American or global developments that may boost the sales and the use of recreational or medicinal marijuana. This, in turn, would also boost the stock price of CGC.However, it will probably be several quarters before the U.S.-related investments would pay off and turn into profits. Short-Term Headwinds for CGCMany investors are worried that the initial hype surrounding the industry may possibly be decreasing. Therefore, CGC's upcoming earnings report will be important not just for the company but also for the industry, as not everyone is convinced that Canadian recreational weed sales will remain strong.And if CGC's numbers do not come out as high as expected, then there would not be much momentum for Canopy Growth stock or the cash-intensive industry as a whole. Investors are beginning to get concerned about how increased spending is reducing earnings and cash flow numbers. So far, cannabis stocks have largely been driven by hype and publicity, such as the investment by Constellation Brands in CGC.Indeed, many analysts are concerned that the valuations in this new consumer market are extremely high, that most of the cannabis stocks are going through cash fast and that many are not likely to achieve profitability in the near future.In January, CEO Bruce Linton said that Canopy Growth did not plan to acquire any more Canadian cannabis assets. In other words, the company is possibly regarding the growth levels in Canada as not enough for the ambitious expansion plans.If further growth does not come from the rest of the world and especially the U.S., Wall Street is likely to start devaluing most of these pot companies substantially. Thus, if there were legal issues, especially in the U.S., regarding the potential of legalization of marijuana at the federal level, the industry would take a hit.One important benefit of the investment by STZ, which now has a 37% interest in CGC, has been that Canopy Growth has the financial muscle to pursue acquisitions and invest in R&D to grow its production space. However, not all potential deals are likely to benefit CGC shareholders immediately.For example, the group has an agreement in place to acquire U.S.-based Acreage Holdings (OTCMKTS:ACRGF) for $3.4 billion. However, this acquisition can only happen if cannabis is legalized federally in the U.S. Would investors give Canopy Growth a blank check for an open-dated deal? Takeaway for Canopy Growth StockInvestors may have to wait until Canopy Growth's earnings report later in the month to have a better view on the developments in the industry as they affect CGC stock. Analysts will pay special attention to the sales figures and the level of operational loss.For Canopy Growth stock, it may be a long and choppy journey back to the all-time high of $59.25 as rich valuations in this commodity-based consumer market may take a hit in the coming months.There might also be profit taking and investor uncertainty about the general markets as well as the weed industry. As we enter the second half of the year, could investors become more risk averse and shy away from these high-growth yet potentially risky stocks for their portfolios?In addition, investors who look at the CGC stock chart may be raising their eyebrows as currently the stock is down from a 2019-high of $52.74 reached on Apr. 29 to low-$40's.Those who bought at the high might not be too happy, but investors who had the courage to step in at the end of 2018 when CGC stock saw $25.26 are still in pretty good shape. If you are an investor with paper profits, should you consider locking in some of those gains now?At present, the short-term technical charts, especially the trend lines and support and resistance levels, are telling investors to exercise caution.Of course, Canopy Growth stock may initially rally around the quarterly report, and a potential investor could miss out on some profits for not having bought into the CGC shares early on. Or there might be a few other newsworthy moments that may get investors to set their sights back on Canopy Growth stock. However, I do not think such potential up moves will be long-lived. * 7 Stocks to Buy As They Hit 52-Week Lows If you are considering investing in Canopy Growth, you may want to start building a position between the $27.5-$32.5 levels, and expect to hold the stock for several years. In the meantime, expect a lot of volatility in CGC share price.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post CGC Stock Will Be Volatile Heading Into Earnings appeared first on InvestorPlace.
Though the bulk of cannabis stock-mania to date has focused on Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aurora Cannabis (NYSE:ACB) and Cronos Group (NASDAQ:CRON),arguably the most compelling pick in the bunch, Hexo (NYSEAMERICAN:HEXO), has been habitually overlooked.That's changing though, and for good reason. As marijuana-stock mania continues to mature and investors are willing and able to start judging these companies on their individual merits, they're finding HEXO is about as well-positioned for growth as any other name in the business. Although the Hexo stock price feels frothy now, this quiet name may be one of the better options for newcomers looking for exposure to marijuana stocks. * 7 Stocks to Buy As They Hit 52-Week Lows Bank of America's Christopher Carey agrees.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What Makes HEXO Different?At first glance, it's easy to assume all marijuana stocks are the same.Take a closer look, though, and it becomes clear they're not. Aurora, for instance, has made it clear it's first and foremost hoping to make a meaningful shift into the medicinal market, and is steering clear of beverages. Canopy Growth has mastered its appeal to recreational users. Each name in the business, in fact, is now cultivating one or more niche.So what makes HEXO different? A couple of things.One of them, oddly enough, is geography.Though recreational cannabis is now legal everywhere in Canada, one of the proverbial epicenters of the movement has been Quebec, where HEXO sells roughly one-third of all cannabis bought. Its long-term supply contract should keep it positioned as the market leader there for the foreseeable future.The overarching difference between HEXO and its peers, however, is its plans to penetrate the still-budding edibles and beverage market, in the U.S. and Canada, along with its giant partner and its history of innovation.It's a tricky and unproven arena, one of the reasons Aurora Cannabis has no current plans to produce a beverage line. But HEXO will have plenty of competition in that market. Constellation Brands (NYSE:STZ) and Canopy Growth are teaming up on beverages, and New Age Beverages (NASDAQ:NBEV) has already launched a cannabis-infused line, using the brand name Marley (as in Bob Marley).HEXO has something of an ace up its sleeve on this front, though. It's already working with alcohol giant Molson Coors Brewing (NYSE:TAP) to bring beverages to the Canadian market, a market that may be worth on the order of $3 billion, before the end of the year.Though Constellation and Canopy will provide formidable competition, Molson thinks HEXO was the better partner. It would know, too. It held discussions with Aurora Cannabis and Aphria (NYSE:APHA) along with two other unnamed outfits, but Frederic Landtmeters, the CEO of Molson Coors Canada, ultimately concluded it was Hexo's "track record of innovation" that would make it the highest-potential partner.Then there's the detail investors have likely overlooked; Hexo is arguably better prepared to get a foothold in the growing U.S. market than most cannabis companies.Hexo USA was only officially launched a couple of weeks ago, but its CEO, Sebastien St. Louis, has already been in the United States for a while, speaking with investors, laying the groundwork for the company's future in the country.What that future has in store remains unclear, particularly given the fact that recreational cannabis and even medical marijuana remain illegal in much of the United States. But Oppenheimer analyst Rupesh Parikh noted in February, when he first started covering Hexo stock, that he expects HEXO to develop partnerships in non-beverage categories like cosmetics, edibles and vapes. That's important simply because, in the United States and Canada, consumers who are interested in trying cannabis for the first time are more likely to do so by eating or drinking it rather than smoking it.Others are already in the space, to be clear, but no cannabis company has yet entered into an edibles-oriented partnership from a major name. HEXO may be quietly mulling the industry's first such deal, if Parikh's instinct is on target. Looking Ahead for Hexo StockBank of America's Christopher Carey noted in April, "HEXO is our Top Pick in cannabis, screening compelling in our valuation framework vs peers (EV/sales and DCF), and with fundamentals grounded by the most de-risked cannabis supply in Canada (off-take with Quebec), an innovation-forward organization and potential for additional value-add partnerships (beyond that already developed with Molson Canada)."HEXO alluded to such value-added partnerships when Hexo USA was launched, bolstering comments already offered by Oppenheimer. And Molson has already noted how innovative the company has been.The assessments remain largely the same from one impartial observer to the next.Hexo stock may not be the absolute top pick in the cannabis space, as Carey suggests, but there's no denying HEXO is a marijuana stock that's been erroneously ignored.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) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Hexo Stock May Be the Cannabis Industry's Best-Kept Secret appeared first on InvestorPlace.
When it comes to the Canadian cannabis world, there are four big pot stocks that tend to hog the spotlight. That Big 4 includes Canopy Growth (NYSE:CGC), Aurora (NYSE:ACB), Tilray (NASDAQ:TLRY) and Cronos (NASDAQ:CRON). But those aren't the only four pot stocks playing in the Canadian cannabis market. Indeed, there are a handful of other pot stocks which, for various reasons, aren't followed as closely by Wall Street.Source: Shutterstock One such under-the-radar pot stock is Aphria (NYSE:APHA). For all intents and purposes, Aphria is just like Canopy, Aurora, Tilray and Cronos. The company is a Canadian cannabis producer which sells thousands of kilograms of cannabis into the legal Canadian market every quarter, and is looking to expand its reach into other countries, including the U.S. But, relative to the Big 4, APHA stock has a tiny market cap and is much, much cheaper on a fundamental basis.Does that mean APHA stock is the best pot stock to buy?InvestorPlace - Stock Market News, Stock Advice & Trading TipsNo. Far from it. Instead, Aphria stock is understandably smaller and cheaper than its peers. This company has a relatively small cannabis business. That cannabis business has reported tumultuous and shaky results over the past several months. The optics and news flow surrounding the company have been confusing, at best, and very worrisome, at worst. There's no big money investment. Nor is the balance sheet all that loaded up.In other words, there really isn't anything special about Aphria. Instead, there are few things which warrant concern.As a result, while APHA stock is cheaper than its peers, it is cheaper for a reason -- and that means investors are probably best served to wait on the sidelines until more clarity and stability are injected into this company's narrative and fundamentals. Cheapness Explained By Red FlagsOn its face, Aphria stock is considerably cheaper than any of the Big 4 pot stocks. * 7 Stocks to Buy As They Hit 52-Week Lows Canopy is the biggest player in this market, selling over 10,000 kilograms of cannabis last quarter. Aurora slots in at number two, with just under 10,000 kilograms of cannabis sold last quarter. Meanwhile, Tilray sold about 3,000 kilograms of cannabis. Aphria sold around 2,600 kilograms of cannabis. And Cronos is the smallest in this group, with just over 1,000 kilograms of cannabis sold last quarter.Given how much bigger they are, Canopy and Aurora reasonably have much larger market caps than Aphria. But, despite Aphria having a similarly sized cannabis business as Tilray and Cronos, APHA stock has a significantly lower market cap. TLRY stock has a $3.5 billion market cap. CRON stock is up above $5 billion. APHA stock is down near $1.5 billion.Indeed, on a market cap per kilogram of cannabis sold last quarter basis, Aphria stock is much cheaper than its peers. The median valuation across the Big 4? Roughly $1.3 million in market cap per kilogram of cannabis sold last quarter. Aphria stock's market cap per kilogram of cannabis sold last quarter? Below $650,000.But, this cheapness in APHA stock is easily explained by the company's tumultuous fundamentals and narrative.First, and foremost, Aphria's cannabis business actually declined in terms of both quarter-over-quarter revenue and volume last quarter, due to supply shortages. Second, there have been some notable C-suite departures which have created confusing turnover at the head of the company. Third, there was a hostile takeover offer that didn't pan out… and was very odd from the onset. Fourth, this company hasn't attracted any big-money interest or offers, despite its cheap valuation.Net net, there are reasons why APHA stock is cheaper than its peers, and those reasons should keep investors sidelined for the time being. No Need to Buy Aphria Stock YetMaybe the current cheapness in Aphria stock isn't warranted in the long run. Maybe the cannabis business will stabilize, all the external noise will pass, and the stock will roar higher.All this could happen. But, if it does happen, it will take several months to play out -- meaning there's no reason to buy in just yet while the story is still troubled.The first thing that needs to happen here is the cannabis business needs to stabilize. Next quarter's numbers need to represent growth from this quarter's numbers. Until that happens, investors likely won't buy in.The second thing that needs to happen is all the optical noise needs to pass. The C-suite needs to see some stabilization. Attacks against the company's credentials need to stop. The hangover from the hostile takeover bid needs to pass. * 10 Stocks to Buy That Could Be Takeover Targets If all that happens, then APHA stock will rally in a big way from here. But, until then, this stock will remain understandably cheaper than peers. Bottom Line on APHA StockPot stocks are inherently volatile, and APHA stock is volatile even for a pot stock. This volatility in the stock is the result of volatility in the company's fundamentals and narrative. So long as this fundamental and narrative volatility persists, investors will remain hesitant to buy into APHA.As of this writing, Luke Lango was long CGC and ACB. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Aphria Is an Understandably Cheap Pot Stock appeared first on InvestorPlace.
With stocks flying high on the heels of a Mexico-U.S. trade deal, bullish picks are likely multiplying across the web. But we're going to take the road less traveled with today's gallery by focusing on stocks to sell. The reasons are simple.First, active traders who desire to increase their quantity of trades must of necessity play the bullish and bearish side of the market. Otherwise, you end up with way too much exposure creating large fluctuations in your account value. Just think about someone who was swinging 15 bearish trades and no bullish ones last week when the market rallied five-days in a row. Ouch! By diversifying strategies you can trade more but have less risk.Second, last week's runup may have turned some trends higher but many remain bearish. The rally simply returned them to resistance creating compelling short setups.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 A-Rated Stocks to Buy Under $10 Let's take a closer look at three stocks to sell. Canopy Growth Corp (CGC) Click to Enlarge Source: ThinkorSwim Pot stocks lost their mojo last month, and Canopy Growth (NYSE:CGC) wasn't immune to the fall. CGC fell below its 200-day moving average for the first time in six months. Its descent has been long enough to reverse the 20-day and 50-day moving averages lower. Last week's rebound returned CGC stock to potential resistance, setting up a classic swing sell pattern.The only question is whether it will trigger. This morning's 3.7% rally is extending last week's gains, so I suggest waiting until the stock breaks a prior day's low before deploying bear trades.For now, I like using today's low of $42.61 as the trigger. If we take it out, then consider buying Aug $45 puts. A break above $46 would cause me to change my tune. Lyft (LYFT) Click to Enlarge Source: ThinkorSwim The Uber (NYSE:UBER) IPO breathed new life into LYFT (NASDAQ:LYFT) shares last month. Since bottoming at $47.17, LYFT stock has rebounded 27%. And while I'm open to the possibility of continued strength in the stock, overhead resistance at $63 has me eyeing a bearish trade here.The risk, if wrong, is minimal. And the potential reward is substantial if LYFT rolls over. For the first target, you can use the closest support pivot at $54. After that, $50 comes into play. Consider using a break of Friday's low at $59.21 as your trigger. * 10 Stocks to Buy That Could Be Takeover Targets For strategy selection, I like the Oct $60/$50 bear put spread, which currently costs $5.30. Lowes (LOW) Click to Enlarge Source: ThinkorSwim Out of today's selection of stocks to sell, Lowe's (NYSE:LOW) has the cleanest swing sell setup. Its share price was slammed after disappointing the Street with last month's earnings announcement. The high volume swoon carried LOW stock to a fresh three-month low. Since then, we've seen an oversold bounce returning LOW to a horizontal resistance zone and its descending 20-day moving average.While the rebound may continue for a day or two yet, this price zone is an area to watch closely for sellers to emerge. For now, use Friday's low ($96.70) as the trigger for bearish plays.The Oct $95/$90 bear put spread costs $1.80 and offers a low risk way to capitalize on the next downswing.As of this writing, Tyler Craig didn't hold a position in any of the aforementioned securities. Check out his recently released Bear Market Survival Guide to learn how to defend your portfolio against market volatility. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post 3 Stocks That Can't Escape the Bears' Crosshairs appeared first on InvestorPlace.
Marijuana stocks got clobbered last month, and their performances are a mixed bag so far in June.
In a crowded crop of cannabis stocks Canopy Growth (NYSE:CGC) remains a favorite among analysts for more than a few good reasons. But the the price chart still suggests CGC stock isn't ready for picking. In fact, the stock could grow into a very profitable shorting opportunity. Let me explain.Source: Shutterstock Shares of Canopy Growth seemingly have everything going for it. The latest to promote that fact is investment firm Stifel. Analyst W. Andrew Carter initiated shares Thursday with a buy rating and price target of CAD $64 or an equivalent $47.77 USD for the NYSE-listed shares. At the same time CGC stock was hailed as the "best investable opportunity" in cannabis.Behind the bullish-sounding praise, Mr. Carter pointed out Canopy's best-in-breed leadership and large-scale infrastructure in Canada. The company's partnership with Constellation Brands (NYSE:STZ), Canopy's multiple channels to profit from the U.S. market and its top-notch positioning for cashing in on global medicinal opportunities were also noted.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy That Could Be Takeover Targets The problem with the approval is there's nothing new under the sun here. Stifel's recommendation states the obvious to anyone with more than a passing interest in CGC stock over the past year. Further, given a meager sub $48 price target, which barely compensates investors for the week-to-week risk in owning a volatile name like CGC stock, growing your dollars from a CGC stock purchase today continues to look like tough business on the price chart. CGC Stock Daily Chart Click to EnlargeCanopy's impressive credentials on paper continues to be at odds with a volatile price chart and one with a knack for temperamental behavior. A recent warning in mid-May to simply watch CGC from the sidelines was a good call as shares went on to shed roughly 15% at their recent lows. And I don't see that pain as being over just yet either.This week's rally has reclaimed some of that lost value. The bad news is CGC stock is now stationed beneath the 200-day simple moving average after breaking the key long-term and closely-watched trend line. Moreover, the move higher this week has formed a bearish flag whose low undercut a similar failed pattern from April, which incidentally found support off the same moving average.The technical interpretation is this time bulls won't be so lucky with the current bearish pattern given the extra layer of resistance. If I'm correct, Canopy Growth shares will also be in position for a much larger correction towards the December low.For traders agreeable with this bearish outlook, I'd recommend shorting shares below $41. The modified entry is about 1% beneath Thursday's doji closing print and should help trigger some bearish momentum out of the flag. The short is also contingent on Canopy Growth remaining below $43.50. This line in the sand allows for a necessary couple percent of wiggle room above the 200 SMA. Given Canopy Growth stock's history of erratic and volatile price behavior, that's sensible enough. Better yet, it also keeps this bearish play from getting smoked off and on the price chart.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) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Why Canopy Growth Stock Is the Perfect Pick for a Short appeared first on InvestorPlace.
When I was asked to opine about Canopy Growth (NYSE: CGC) stock, I vowed to myself to resist the temptation to make weed-related puns, other than to note that expectations for the Canadian company are "sky high," meaning a bit nutty.Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsI don't know how else to describe an unprofitable company with a history of earnings misses that has managed to rocket 57% since the start of the year, outperforming the S&P 500. which rose 13% during that same time period. * 7 Stocks to Buy As They Hit 52-Week Lows The Smokin' Hot Returns of Canopy StockWall Street analysts have an average price target on CGC stock of $58.53, almost 40% higher than where CGC stock price closed Friday, even though analysts don't expect the company to be consistently profitable until 2021, despite the $4 billion investment it got from Constellation Brands (NYSE:STZ) last year.There are many red flags for skeptics on CGC stock to focus on. Among these red flags are the 26 acquisitions and eight financing deals the company has done in less than five years, which is a lot of deals for a company that was founded in 2009. The Mother of All Growth SpurtsI can't imagine the difficulty of growing CGC's workforce from 156 in 2015 to more than 2,700 as of the most recent quarter or of keeping a watch on its surging R&D expenses, which were $3 million in the latest quarter versus $500,000 a year earlier.Even so, I am not going to trash CGC stock because I may one day be able to benefit from the products the company makes to treat Parkinson's Disease, which I have. Parkinson's is the second-most common neurological disease behind Alzheimer's. My Personal Interest in CGC StockOn Facebook, I have seen videos of my fellow Parkinson's victims whose symptoms seem to disappear after taking cannabidiol or CBD, a compound derived from cannabis that lacks the THC which makes users high. I am not sure who is behind the posts or how long the relief lasts. Fortunately, my Parkinson's hasn't progressed as far the people in the videos I saw, though I worry that it might someday. Since I am not a doctor, I will refrain from speculating about the scientific issues at play here. I am taking the wait-and-see approach to CBD advocated by The Michael J. Fox Foundation because results of scientific studies on the topic have yielded mixed results. CBD has proven to be beneficial in treating some forms of epilepsy and may prove to have some efficacy when it comes to treating anxiety. Unfortunately, some CBD companies are making irresponsible claims that the compound can cure cancer. Quality Control ProblemOf course, scientists have been reluctant to study the health benefits of cannabis since it remains illegal under U.S. federal law. Another one of the weaknesses of the CBD market is quality control, which Canopy is in a position to address thanks to its recently announced $150 million hemp processing plant that it plans to build in New York State. The Bottom Line on Canopy Growth StockInvestors with a high tolerance for risk should buy Canopy stock, but do me a favor and make your decision before indulging in the company's non-CBD products.As of this writing, Jonathan Berr doesn't own any shares of any companies discussed in this post. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post My Interest in Canopy Growth Stock Goes Beyond Its Price appeared first on InvestorPlace.
Actor & comedian Tommy Chong weighs in on CBD outlook. This coming as Texas legalizes hemp production. Yahoo Finance's Zack Guzman & Sibile Marcellus, along with 'BigEyedWish' founder Ian Wishingrad join in on the conversation.
Nationwide luxury cosmetics retailer, Bluemercury is celebrating 20 years in business. Yahoo Finance's Zack Guzman & Heidi Chung, along with Independent Women's Forum Nan Hayworth discuss with Bluemercury Co-Founder Barry Beck.
The House of Representatives is expected to pass a bill making it legal for marijuana companies to use banks in states where weed is legal. Former U.S. Securities and Exchange Commission Attorney Ron Geffner warns it may go up in smoke in the Senate. He talks to Yahoo Finance's Adam Shapiro, Julie Hyman, and Entrepreneur Magazine Editor Jason Feifer.