|Bid||36.67 x 800|
|Ask||36.69 x 1100|
|Day's Range||35.76 - 36.74|
|52 Week Range||24.21 - 59.25|
|Beta (3Y Monthly)||3.53|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Cannabis stocks were mostly higher Wednesday, with Curaleaf leading the pack after announcing an $875 million stock-and-cash deal that will help it expand into new states, including Illinois.
What is going on with the cannabis space? Seemingly every stock in the group is getting sold lower, including Cronos Group (NASDAQ:CRON). In fact, what's even more interesting is the way that they're all selling off. CRON stock and others are positioning in a similar bearish setup.Source: Shutterstock It's drawing questions from observers as to why the industry is under such pressure. The inquiry becomes even more pressing as the Dow Jones, S&P 500 and Nasdaq are hitting new highs on a seemingly daily basis.How can equities be at a high while cannabis stocks are scraping multi-month lows?InvestorPlace - Stock Market News, Stock Advice & Trading Tips Breaking Down Cronos Group StockThere are dozens of cannabis stocks investors can consider -- that goes for almost any industry. And like any other sector, there are good companies and not-so-good companies to choose from. Luckily for Cronos stock, it is a good company. But that doesn't seem to matter right now, and that's because of the fundamentals.You see, even though CRON stock runs a good operation, this company has a $4.7 billion market capitalization and had just -- wait for it -- 6.5 million CAD in sales last quarter. This was up an impressive 120% year-over-year, but is a very small revenue number given its valuation. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip The company turned a pretty strong profit for the quarter, earning more than 400 million CAD. How's that possible on 6.5 million CAD in sales? CRON generated a non-cash unrealized gain of 436.4 million CAD on the revaluation of derivative liabilities.The cannabis space is a land grab right now. And the ones with the cash get to grab the most assets. Canopy Growth's (NYSE:CGC) big bank account was infused by Constellation Brands (NYSE:STZ). But now CRON stock can throw its hat into the ring, after it closed a $2.4 billion investment from Altria (NYSE:MO) in the most recent quarter.Now its balance sheet is strong, even if its income statement remains unimpressive. This vault will be important down the road. Earlier this month, Stifel analysts said the cannabis market could hit $200 billion in the next decade. That's up from $8 billion in 2018.The bottom line: you might look at the revenue underlining Cronos stock and question all the hype. But with more than $2.4 billion sitting in cash and making up half the market cap, it commands some respect. Trading CRON StockSo, did CRON stock just become a big-time sell? Not yet, but it could be soon. Aurora Cannabis (NYSE:ACB) is breaking down, while Canopy plunged through support. Both stocks were setting up as a descending triangle, a bearish technical development.Cronos stock isn't looking healthy, either.After falling hard on Friday and closing below the 200-day moving average, shares rebounded 4.5% on Monday. The stock closed just above this key moving average on Monday, but only by a dime. It's not clear whether Cronos stock will reclaim this mark or find it as resistance. Click to EnlargeBut that doesn't really matter because we know two things now. One, $14 support is a must-hold level. Unlike ACB, CGC and other cannabis plays, CRON stock is still clinging to its support level. Below $14 puts the June lows of $13.51 on the table, as well as the 61.8% retracement for the one-year range at $13.06.Below that and there's no immediate support level to lean on.The other thing that's clear? In order for Cronos Group stock to look healthy on the long side, we need to see it clear the $15 to $15.50 area. Over the past few months, $15.50 has been a relevant level, while both the 20-day and 50-day moving averages are trading in this range.It's a bit early to say Cronos Group stock is doomed, but it's not looking healthy as the industry draws in sellers. I'd rather wait for CRON stock to have the wind at its back than buying now and hoping support holds up.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 * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Did Cronos Group Just Become a Big-Time Sell? appeared first on InvestorPlace.
There will always be naysayers in the sphere of stock market investing, especially when it comes to cannabis stocks. This is true for the bigger names like Canopy Growth Corp (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And it also applies to today's spotlight name, Hexo (NYSE:HEXO). But does Hexo stock deserve its reputation as a volatile, dangerous investment?I won't deny that Hexo Corp stock is a speculative play. But I wouldn't consider it any more dangerous than the broader cannabis market. You're either a believer in marijuana stocks or you're not. And if you can handle some risk, then Hexo stock could be your ticket to surprisingly impressive returns.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Too Legit to QuitOnce they were marginalized companies, but Canopy and Aurora have since transitioned from thinly traded over-the-counter markets to the major exchanges. In turn, this emboldened other cannabis up-and-comers to likewise move to the bigger exchanges.Hexo would be a textbook example of this. They're now being promoted from the much smaller NYSE American exchange to the New York Stock Exchange. Hexo Corp stock owners shouldn't experience any negative impact. Further, the ticker symbol of HEXO will remain the same. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip CEO and co-founder Sebastien St-Louis rejoiced in this headline-making move. He commented that Hexo Corp is "extremely pleased to list on the NYSE and believe it reaffirms HEXO's strong track-record for exceptional corporate governance and is further proof that we are a valuable cannabis industry partner for Fortune 500 companies."I'd affirm that just like Canopy and Aurora, Hexo deserves to play on the same field as other major-league batters. One of the biggest licensed cannabis companies in Canada, Hexo Corp serves both the adult-use and medical-use Canadian markets through a multitude of popular brands. A Historic First for Hexo Corp StockLest we forget, this once under-the-radar company generated huge headlines. Hexo was the first major cannabis producer to ink a deal with a brand-name beverage company. Moreover, it did so with the explicit purpose of developing and manufacturing cannabis-infused beverages. In a landmark agreement with Molson Coors Brewing Company (NYSE:TAP), Hexo moved even faster than Canopy to map out a definitive plan to bring cannabis-enhanced drinks to the public.And it's not just about beer, as the two companies are also considering cannabis-infused water and hot beverages. According to Molson Coors president and CEO Mark Hunter, the total cannabis market in Canada is approximately valued between $7 billion to $10 billion. Within that figure, beverages account for anywhere from 20% to 30% of the total, or as much as $3 billion. That's a massive untapped (pardon the pun) market for Hexo stock. A Major AcquisitionIn what I believe to be a game-changing expansion, Hexo Corp acquired what was one of my favorite cannabis companies this year, Newstrike Brands, for around $197 million. In so doing, Hexo added another 470,000 square feet of licensed indoor cultivation space. Keep in mind it already has an expansive 1.31 million square feet of grow space.Moreover, Hexo will now have access to the numerous provincial deals which Newstrike already had in place. Altogether, Hexo's management expects the Newstrike acquisition to yield 400 million CAD in net revenues by the year 2020. The Bottom Line on HEXO StockI'm looking forward to watching the cannabis-investing community bid the HEXO stock price up through the end of this year. And probably the party will continue well into next year.If you're in the pot game, don't sleep on Hexo stock: this could be the company to bring legalized cannabis to the masses.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Reasons Why HEXO Stock Is the Real Deal appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB), one of the world's largest cannabis producers, announced July 15 that it received two licenses from Health Canada for outdoor cultivation of marijuana. The move could be a significant catalyst for ACB stock. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Details of the LicensesThe two licenses are for sites in Quebec and British Columbia. The Quebec site is a 21,000 square-foot operation at the company's Aurora Eau facility in Quebec. The B.C. site is a 207-acre property in British Columbia. It will be called Aurora Valley. The Quebec operation has already been planted; the B.C. site should be planted shortly. Now before any owners of ACB stock get excited about Aurora jumping head first into outdoor growing, they might want to take a deep breath. These facilities are for cultivation research. However, the research ACB does at both of the facilities will ultimately enable it to grow cannabis outdoors. * 8 Penny Stocks That Have Fallen From Grace But first, it needs to figure out what grows best and where. Once Aurora figures that out, it will go all-in on outdoor production. "For this season and next, our focus will be on researching cultivation methods and evaluating genetics to produce high THC and CBD cannabis in outdoor-grown plants, with the ultimate goal of extracting these components," Dr. Jonathan Page, Chief Science Officer at Aurora stated in its press release. "The unique climates of each site also presents a great opportunity to determine which cultivars will perform best in different outdoor environments," he added.A smaller detail from its July 15 press release, but equally important to Aurora's future and the future of Aurora stock, is that the company received a processing license from Health Canada to produce cannabis gummies and chocolate edibles once they're legally available for sale in mid-December. I've said for a long time that the most lucrative sector of cannabis is going to be edibles and cannabis-infused drinks. This license ensures that Aurora will be ready to go as soon as selling edible cannabis is legal in Canada. Outdoor Cultivation Can Boost Aurora StockHealth Canada only approved outdoor cultivation in June 2018, 17 years after medical pot became legal in Canada. Regulators took their time approving outdoor cultivation because they were worried about theft and quality control. Since outdoor cultivation was approved, several companies, including Canopy Growth (NYSE:CGC) have started growing cannabis outside. On July 12, 48North Cannabis announced that it had completed the planting of its first outdoor crop at its outdoor cultivation site in Ontario. The company planted a total of 250,000 cannabis seeds at its Good:Farm facility, which has 3.7 million square feet of cultivation space. The company expects to produce more than 40,000 kilograms of dried cannabis per year. The biggest attraction of 48North's cannabis facility is that it's expected to produce cannabis at the lowest cost in Canada. That's a big deal, considering that Stats Canada recently produced a report that suggested legal pot in Canada costs as much as 65% more per gram than illegal cannabis. The Canadian government is working on ways to shrink the gap, including lowering the minimum tax on cannabis and switching to a system that taxes cannabis solely based on wholesale prices. Aurora, Canopy Growth, and North48 are all thinking along the same lines. It's cheaper to produce cannabis outdoors, and cheaper, legal cannabis will attract more buyers. By following that philosophy, Aurora should be able to boost its top and bottom lines, elevating ACB stock in the process. The Bottom Line on ACB StockHere in Canada, the cannabis industry has been under fire in recent days due to the troubles facing CannTrust Holdings (NYSE:CTST) and its failure to follow Health Canada's rules. It could permanently lose its cannabis license as a result. CannTrust's failure is a sign that the cannabis industry still in the early stages of growth. It's not good news for owners of Aurora stock or theshareholders of the other big Canadian cannabis stocks because it puts their reputations under a microscope. However, if Aurora continues to grow its outdoor cultivation business, I believe its future profits could be a lot higher than people currently estimate. That, in turn, would certainly be great news for Aurora Cannabis stock. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Outdoor Cultivation Can Boost Aurora Cannabis Stock appeared first on InvestorPlace.
Ladenburg Thalmann initiated coverage of the cannabis sector on Wednesday, assigning buy ratings to market leader Canopy Growth Corp. and Aurora Cannabis Inc. , and a neutral rating to Tilray Inc. Analyst Glenn Mattson said he favors Canadian companies who are focused on long-term value creation and gaining market share, along with those with clear plans to enter the U.S. market, which is expected to become the world's biggest, if and when federal laws allow it. "In the U.S. we look for companies that are building a presence in states with large populations but a limited licensing outlook," Mattson wrote in a series of notes to clients. The analyst views Canopy as a compelling investment opportunity, and said he expects it to retain its leading position in Canada--and beyond. "We believe that Canopy can replicate that effort in other markets as those markets move toward legalization," Mattson wrote. "Canopy has the most aggressive approach to capturing the U.S. market (estimated to be the world's largest potentially) through its potential acquisition of Acreage Holdings (ACRGF: $14.50, Buy)," he said. Aurora is "one of the most aggressive capacity expansion plays" in the cannabis sector, with its aim to become the low-cost provider of premium product. "While some firms are being cautious about expansion with the possibility that the Canadian market may see oversupply, Aurora is taking the view that the market for cannabis will be global and it can export to areas like Europe if the Canadian market sees saturation," he wrote. Turning to Tilray, Mattson said that company is supplying medical cannabis to patients in 15 countries and praised its brand strategy and clinical trials. But the plan of distribution of its big shareholder Privateer will create an overhang on the stock that Mattson expects will weigh for some time. "It remains to be seen what kind of traction TLRY will have with CBD in the U.S. and until then we don't believe an established organic foods company should trade at the same multiple as a high-growth cannabis company," he wrote. The ETFMG Alternative Harvest ETF has gained 21% in 2019 to date, while the S&P 500 has gained 20%.
All pot stocks have been on a roller coaster ride over the past year. But, none have been quite as volatile as Tilray (NASDAQ:TLRY) stock. Over the past twelve months, Tilray stock has gone from $20, to $300, to $100, to $150, to $35.Source: Shutterstock That's a wild ride. Investors should expect it to continue. At their core, almost all pot stocks are high-risk, high-reward investments, given the speculative nature of the cannabis market and its long term growth prospects.TLRY, though, has more risk and more potential reward than peer pot stocks. As such, while all pot stocks project to undergo volatile swings for the foreseeable future, the swings in TLRY stock should continue to be more pronounced.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWhat's the investment implication? Stay away from Tilray stock. For now. If you're looking to invest in the cannabis market for the long haul, there are safer and more reasonable ways to do so -- see market leader Canopy Growth (NYSE:CGC). * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip But, there is a scenario in the foreseeable future where TLRY stock does become a buy. Consequently, while I'm staying away from Tilray for now, I'm also keeping a close eye on it, and am ready to pull the trigger if the stars align for this stock. The Current Dynamics Imply High Risk, High RewardThe present situation surrounding TLRY is defined by a few critical characteristics, all of which imply that TLRY stock's inherent high risk, high reward trading nature will persist for the foreseeable future. Those characteristics are as follows. * One entity holds most of the outstanding stock. Perhaps the most important element of Tilray stock is that one investor (Privateer Holdings) holds nearly 80% of the outstanding stock. To be sure, this one investor has agreed not to unload all of the shares at once, and instead will gradually unload them over the next two years. Still, in the meantime, the trading float here is relatively constrained, and a big portion of that float is short. A small float plus a big short interest implies sustained big volatility over the next few quarters. * No consumer staples giant has invested in Tilray, yet. Another important element of Tilray stock is that, while peers Canopy and Cronos (NASDAQ:CRON) have scored multi-billion dollar investments from global consumer staples giants, Tilray has not. There are two ways to interpret this. Either no one wants to invest in Tilray, or someone will invest in Tilray. There are reasonable investors in both camps. So long as both those competing theories have supporters, TLRY stock will remain volatile. * Tilray is much smaller than the cannabis market leaders. Both Canopy and Aurora (NYSE:ACB) sold over 9,000 kilograms of cannabis last quarter and reported revenues of roughly $50 million or greater. Tilray sold just 3,000 kilograms of cannabis last quarter, with revenues of $23 million. This relative "smallness" means that Tilray could one day gain on its bigger peers, or be eaten alive by its bigger peers. So long as both of those outcomes are possible, TLRY stock will remain volatile.Broadly, so long as the float remains constrained, no consumer staples company has invested in the company, and Tilray remains substantially smaller than the cannabis market leaders, TLRY stock will remain volatile. Tilray Stock Could Become a BuyGiven the enormous volatility inherent to the stock, I think TLRY is best avoided at the current moment. Having said that, there is one thing which could dramatically reduce the volatility and make TLRY stock a buy. That one thing would be a multi-billion dollar investment from a consumer staples giant.Here's the bull scenario. Privateer Holdings is just now starting to offload some of its shares to strategic and institutional investors. In so doing, they are paving the path for a consumer staples giant to inject capital into the business. Consequently, a consumer staples giant that was formerly unable to invest in Tilray because of Privateer's near 80% holding, may now pull the trigger on a big investment.If such a big investment does materialize, Tilray stock will pop, because such an investment will mitigate present stock volatility, shore up the balance sheet, equip the company with the necessary firepower to compete at scale, and add clarity to the long term growth potential of the business.How big will such a pop be? Pretty big. Cronos is much smaller than Tilray in terms of sales and volume. Yet, because Cronos has a multi-billion dollar consumer staples investment and Tilray does not, Cronos has a $5 billion market cap, while Tilray has a $4.4 billion market cap. Thus, if Tilray scores a similar investment, you could reasonably see TLRY's market cap rise to well over $5 billion. Bottom Line on TLRY StockTilray stock has been, still is, and will remain the most volatile pot stock in the market. Because of all this volatility, TLRY stock isn't a buy at the current moment. However, that volatility could subside in the not-so-unlikely event that Tilray scores a big consumer staples investment in the foreseeable future.If that happens, TLRY stock will become a buy, given its undervaluation relative to other pot stocks with similar consumer staples investments.Until then, though, it's best to wait on the sidelines.As of this writing, Luke Lango was long CGC and ACB. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Here's Why Tilray Stock Is a High-Risk, High-Reward Situation appeared first on InvestorPlace.
In the latest trading session, Canopy Growth Corporation (CGC) closed at $35.56, marking a +1.11% move from the previous day.
Most owners of Canopy Growth (NYSE:CGC) stock have embraced micro details like the company's specific acquisitions or macro matters like the slow march towards the legalization of recreation cannabis in the U.S.Source: Shutterstock Most owners of CGC stock, however, have ignored the area in between those two extremes. That's the area where a company takes little building blocks like acquisitions and assembles them on a major foundation, enabling it to earn a profit. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Failure to respect that middle ground ultimately cost the now-former co-CEO of Canopy Growth, Bruce Linton, his job. Booze company Constellation Brands (NYSE:STZ), which is not only a major Canopy Growth stock holder but also has effective control of CGC's board of directors, fired Linton in early July primarily because of CGC's continued heavy losses that have weighed on CGC stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCanopy's other top executive, Mark Zekulin, is also on his way out.At first glance, it would be easy to simply chalk the whole affair up to company-specific, and even personnel-specific, misunderstandings. And there's some truth to that.In a much more meaningful sense, though, the surprising shakeup may be a microcosm of bigger cracks starting to form within the cannabis craze. Not unlike the ultimate fate of rare earth metals stocks in 2010, solar panel stocks in 2007 and 3D printing stocks in 2013, reality is starting to seep into marijuana mania.The owners of marijuana stocks are understandably not liking what they're seeing. Trouble in ParadiseDuring Constellation's most recent earnings call, CEO Bill Newlands explained he was "not pleased with Canopy's recent reported year-end results." For Canopy's fourth quarter that ended in March, the company posted an EBITDA loss of CA$257 million on gross revenue of CA$140.5 million. The total loss of CA$323 million translates into a loss of 22 Canadian cents per share of CGC stock, or 17 U.S. cents per share (U.S.) for the NYSE-listed equity of the Canadian company.The full year was even uglier.Perhaps even worse, sales of recreational marijuana -- which only became legal in Canada as of October -- fell nearly 4% versus Q3Don't think for a minute that Canopy Growth is the only marijuana stock flashing warning signs, though.Take CannTrust Holdings (NYSE:CTST), for instance. CTST stock has been nearly cut in half since July 5th, when it was discovered that its cannabis production was exceeding legal limits.I'm not suggesting that all cannabis companies are secretly growing plants they shouldn't be growing. But CannTrust's actions do point to the growing pressure for production hikes within the fiercely competitive cannabis market. That same pressure may well be inspiring other similarly risky efforts, including ill-advised acquisitions.To that end, Aurora Cannabis (NYSE:ACB) was pegged by Motley Fool's Sean Williams as a name that's exceedingly vulnerable to major writedowns in upcoming quarters. It's sitting on more than $3 billion worth of goodwill added to its balance sheet to account for a wave of dealmaking that's yet to bear fruit. The company must soon start conceding, via writedowns, that it overpaid for those companies.Bloomberg issued the same warning just a few days ago, with Bloomberg Intelligence analyst Kenneth Shea noting that some of the industry's most-loved names had driven an "aggressive pace of acquisitions at prices above book value." Aurora, Canopy Growth and Aphria (NYSE:APHA) were specifically cited as at-risk cannabis stocks.Hexo's (NYSEAMERICAN:HEXO) shares fell sharply last month after it reported that its cannabis sales somehow slumped during its third quarter, while its loss increased again.The list of red flags facing marijuana stocks continues to grow. And those red flags are starting to weigh on cannabis stocks in general and Canopy stock in particular. The Bottom Line on CGC Stock and Other Marijuana StocksOn their own, none of these developments or data nuggets is insurmountable. Indeed, most cannabis investors appear to know they're counting on hype rather than results to drive marijuana stocks higher, and that the cannabis market may not fully gel for years.In the aggregate, however, the paradigm shift in the tone and quality of the headlines not only poses a threat to the CGC stock price, but to all cannabis stocks.For the first time since the cannabis craze took shape in 2017, with Canopy Growth stock largely leading the charge, the industry and its individual components are being asked to justify their heavy spending in the name of future market share.As Charles Taerk, the CEO of Faircourt Asset Management, recently put it, the market is taking note of winners and losers. He explains "Now investors are starting to judge the companies a little differently. They're starting to say, 'Wait a second, how are they profitable and you're so far from profitable?'"An inability to justify the rapid move away from that profitability just cost Canopy Growth's co-CEO his job, serving as a shot across the bow for other cannabis company chiefs.The CGC stock price may have started this week out with a recovery effort, but the bar is quickly being raised for Canopy Growth stock and its peers. As we learned from crazes like 3D printing, rare earth metals and solar panels, not every player survives once the hype fades and companies have to at least move towards, rather than away from, profitability.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post The Firing of Canopy Growth's co-CEO Is Only Part of the Case Against CGC Stock appeared first on InvestorPlace.
In recent weeks, Cronos (NASDAQ:CRON) stock has been one of the strongest players in the struggling marijuana sector. Last Friday, however, CRON stock gave way as the pot stock sector plunged even farther. CRON stock dropped more than 6% and broke technical support.Source: Shutterstock Cronos stock has been one of the strongest in the industry in recent months. It hasn't collapsed like, say, CannTrust (NYSE:CTST) or Aphria (NYSE:APHA). But the overall weakness in pot stocks as a whole has caught up with CRON stock, even though it is arguably the best positioned for the current industry malaise. Cronos: Slow and Steady Wins the RaceIn my previous article about Cronos, I described how the company was interesting, but that patience was required. Canopy has been running a deliberate and gradual growth strategy. That's in contrast to many of its rivals that are spending money to boost their capacity and marketing as fast as possible.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor quite awhile, many investors viewed Crono's approach as a negative. Marijuana, like say dot-coms in the 1990s, was about having the first mover advantage. Cronos was seemingly allowing its rivals to get ahead by growing more quickly. * 5 STARS Stocks Smashing the Market (FANG Stocks, Too) What a difference a few months make, however. CRON stock has held up better than almost all its immediate marijuana peers. Why's that? Because Cronos hasn't been spending boatloads of money to pursue every revenue growth avenue possible. Instead, it has focused on its core business and is seemingly developing a sustainable and profitable business.It's interesting to note the contrast between Cronos and Canopy Growth (NYSE:CGC). Both have superstar backers. Cronos has its alliance with tobacco heavyweight Altria (NYSE:MO) while Canopy teamed up with Mexican beer giant Constellation Brands (NYSE:STZ). Altria has seemingly instilled Cronos with its methodical approach to business. Meanwhile, Canopy had an ugly falling out with its backer Constellation that resulted in Canopy's founder and co-CEO Bruce Linton getting ousted. Seemingly, Constellation grew tired of Canopy's business strategy which, so far, has led to massive losses. Cronos is One of the Only Pot Companies Making MoneyA recent Bloomberg article noted that the marijuana companies, as an industry, are running into big trouble. Instead of massive profits after legalization, instead inventory is piling up while prices plunge and losses mount. This had led analysts to suggest that a massive wave of writedowns is coming for the industry.Cronos seems to avoid the worst of it, however. The article notes that Cronos is the only one of the biggest five Canadian firms that is expected to make a profit this Q4. Cronos also made a huge profit in its most recent quarter. That comes with an asterisk as most of it came due to non-operating income. However, Cronos, unlike most pot firms, also turned an operating profit in at least some of its quarters in both 2017 and 2018.When the industry was booming, people were giving Cronos a hard time for not putting its cash to work faster. But that decision is looking more and more wise as the rest of the industry drowns in a massive flood of excess cannabis. Massive Marijuana Inventory Sinking ProducersAccording to data from Health Canada, the marijuana industry is facing a veritable deluge of cannabis inventories. In October 2018, when regulators permitted recreational use, Canada had 115,000 kilograms of dried marijuana inventory. As of April, that figure has skyrocketed to 215,000 kilograms.Meanwhile, actual consumer demand for dried marijuana only rose from 6,300 kilos a month to 8,900 kilos over the same period. When inventories nearly double but demand rises less than 50%, you know you have a major problem brewing. In fact, even if the marijuana producers stopped growing any more product tomorrow, there'd still be a massive glut. At a rate of 9,000 kilos a month of consumption, it'd take more than two years for Canadians to use up the already existing supply of dried marijuana.The situation, incredibly, is even worse yet for CBD oil. Since October, the inventory of CBD oil has spiked by 150%. Meanwhile, monthly consumer demand has risen less than 40%. This left the Canadian market with 120,000 liters of CBD oil inventory in April, against monthly demand of just 8,200 liters.How's this going to end? Like most speculative booms do: With most of the higher-cost and levered producers going bust. Tons of entrepreneurs started, and investors funded, marijuana businesses with the hopes of easy profits. Unfortunately, it wasn't to be. The supply of new marijuana is far exceeding actual consumer demand. The industry will have to cut supply and consolidate to improve pricing and achieve profitability. CRON Stock VerdictCronos is playing the long game. And that's the place to be. Many of its competitors bet the farm on sales growth spiking after legalization. Instead, it seems a lot of "medicinal" users simply transitioned to recreational use in Canada once full legalization occurred. The overall market is growing a bit, but not nearly enough to absorb the mountain of marijuana supply coming online. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Like with any speculative boom, there will be a massive shakeout ahead where the weaker players fold. Cronos, with its strong balance sheet and Altria backing, will be a survivor. In fact, it can probably do well. Oftentimes, industry leaders can buy their former rivals for pennies. But that doesn't mean you need to buy CRON stock today. Even the dot-com survivors, like Amazon (NASDAQ:AMZN) ultimately dropped 90% from their peak bubble prices. Cronos has a sound business strategy, but CRON stock will still slide with the rest of the industry until the marijuana supply glut improves.At the time of this writing, Ian Bezek owned MO stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Even Cronos Isn't Safe From the Pot Stock Implosion appeared first on InvestorPlace.
When it comes to the cannabis industry, the only real debate seems to be around how big it's going to get. Modest estimations put the industry at $40 billion by 2024. And there are few cannabis companies that catch the eye of investors quite like CGC stock.Source: Shutterstock But Canopy Growth (NYSE:CGC) hit a snag last week after it came out that the former CEO and co-founder Bruce Linton was fired. The company issued a press release saying that Linton has stepped down from his role as CEO and from the Board of Directors. Then in an interview with CNBC, Linton revealed that he was fired.Many investors were surprised to learn that Linton was let go, but this doesn't change the fundamentals of the company. Canopy Growth is still one of the most valuable cannabis stocks in Canada. Here are three reasons why Linton's firing was good news for CGC stock:InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Numbers Just Weren't ThereLinton did many things right during his run at Canopy. He secured a $4 billion investment from Constellation Brands (NYSE:STZ) and oversaw a number of important acquisitions. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip However, when Constellation Brands made this investment, it earned a 37% stake in the company. It also earned the right to nominate four members to the six-member board. And when Canopy Growth reported losses of C$98 million during its fiscal fourth quarter, this hurt Constellation's bottom line as well. According to Constellation's fiscal first-quarter results, the company reported losses of $54.4 million tied to Canopy Growth. Going forward, Constellation Brands will likely find a replacement that is more interested in improving Canopy's bottom line. CGC Stock Is Ready for New LeadershipCanopy's recent financial performance probably had a lot to do with Linton's firing. But the company may also be looking to transition to new leadership, which isn't uncommon for a maturing company. After all, it takes a different skillset to build a company than it does to run a billion-dollar global brand. According to the press release, Mark Zekulin will act as sole CEO of the company while the board looks for outside leadership. This seems to indicate the company is looking for a new leader going forward, not Zekulin or another co-CEO. The company needs to prove it can find the right person to build on Canopy's momentum going forward. The Cannabis Industry Is ChangingLinton's firing will result in a major leadership change going forward. The change caught most investors off guard and the company's shares dropped roughly 5% that day. However, the stock quickly rebounded. After all, Linton is not the first CEO to be ousted from a cannabis company he founded. Aphria (NYSE:APHA), CannTrust Holdings (NYSE:CTST), and Organigram Holdings (NASDAQ:OGI) all replaced their original CEOs with more seasoned management.The cannabis industry as a whole is changing as it moves from its entrepreneurial beginnings to becoming a major consumer products industry. As the industry continues to change, investors will begin holding these companies to a different standard where profitability is the biggest determination of success. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Reasons Lintonas Firing was Good News for Canopy Stock appeared first on InvestorPlace.
It's a news item that may have nonchalantly passed over many traditionally minded investors' radars. In a few days, Hexo (AMEX:HEXO) will trade on the grandest stage of all: the New York Stock Exchange. Therefore, even though the HEXO stock price incurred ugly volatility in recent months, that could soon change for the better.Source: Shutterstock After a tough earnings report, Hexo could use some good news. This is the positive development that embattled stakeholders have been looking for.Getting listed on the top exchange is a significant event for any publicly traded company. But what makes the promotion for HEXO different is that it also positively impacts the broader marijuana industry. That's because, from day one, all cannabis players searched for one thing: credibility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith the "upgrade" in Hexo, the organization joins powerhouse names like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And this in turn gives the green sector one more name within the elite circle.Now, I'm not suggesting that mere inclusion in the NYSE is the end all, be all. Over the years, we've seen the top exchange delist several names that didn't meet its standards. But that's also the draw for Hexo stock: the NYSE won't let just anyone in. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Among many other factors, a prospective corporation must demonstrate broad demand and value of its equity. Furthermore, they must submit financial documents proving their viability. Given every opportunity to find something wrong, the NYSE gave HEXO stock a pass.That's got to be worth something! Good News Is Gold for HEXO StockDespite the above points, I may still have some doubters regarding the NYSE move's importance. At the end of the day, critics might argue, it's just a change of scenery for Hexo.Nevertheless, it's still a positive development for the budding company, and good news in this sector is worth its weight in gold. Unlike most other investment markets, cannabis-based securities primarily are not driven by the fundamentals. Instead, they're narrative-driven, which can be good and bad.On the negative end of the spectrum, you just need to look at the recent earnings season for marijuana firms. Company after company tumbled over the past several weeks, and for what? Failing to meet consensus expectations for earnings per share and revenue growth?As I explained regarding Aurora Cannabis' bout with volatility, Wall Street is not playing fair with marijuana businesses. Analysts know that due to a murky legal environment in the U.S., cannabis operators have limited options. Thus, the poor earnings results don't accurately reflect demand. Rather, they reflect unnecessary market inefficiencies due to myopic laws.Yet HEXO falls because most investors are trained to look at the numbers. Admittedly, they don't look good.But the numbers don't matter now as much as the narrative. Because for botanical advocates, the main goal was never about Canadian legalization. Instead, the grand prize is full legalization in the U.S.And stories like HEXO being listed in the NYSE add more leverage and credibility to this prospect. With enough positive headlines, the narrative can quickly shift from cannabis firms not making their numbers to potentially advantaging an unprecedented opportunity.That's why I'd advise against panicking: we're just getting into the good stuff for Hexo Corp stock. Ample Evidence Points to Full LegalizationSeveral years from now, I'm almost certain that we'll look back on names like Hexo stock with regret. Not because their shares did poorly but because they catapulted to unbelievable heights.Think I'm high on something? Consider that right now, cannabis is the fastest-growing job market in the U.S. Remarkably, this is true despite the fact that many states still haven't legalized marijuana to any degree.Moreover, several European countries are shifting favorably to weed. Late-last year, South Korea legalized medical marijuana. The concept was so groundbreaking - because the country is socially very conservative -- that it caught observers by surprise.I could go on and on. But the point is that the world is gravitating toward marijuana legalization. Eventually, the rest of the markets will catch up to this fact. And this is the ultimate narrative that can push Hexo Corp stock to crazy levels.Josh Enomoto is considering buying Hexo stock in the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post The NYSE Listing Means Legitimacy and Bigger Things for Hexo Stock appeared first on InvestorPlace.
Cannabis stocks need to fight their way out of their funk. That's true for names like Canopy Growth (NYSE:CGC) and New Age Beverages (NASDAQ:NBEV), but it's critical for Cronos Group (NASDAQ:CRON). CRON stock is not only down by a third since its March high, but is on the verge of breaking under a crucial technical support level.Source: Shutterstock Some -- perhaps most -- would argue that the shape of a chart is irrelevant. A chart's history shouldn't dictate its future. Rather, a company's results and prospects are reflected in its stock's movement.The fact is, however, the movement of a marijuana stock shapes the rhetoric about that company as much as it's shaped by the rhetoric. If Cronos stock slips any further, it would become alarmingly easy for the masses to view it as a liability.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Charting CRON StockIt's not difficult to see.After an overheated rally in January and February set the stage for significant profit-taking in March and April, the 200-day moving average line (plotted on the white line on the chart below) began to serve as a technical floor. It's not yet become a pushoff point, though, and it doesn't appear it's going to. Just within the past several days the sellers have tested the pivotal 200-day moving average line as support again, and it's failing to even modestly repel the effort.The 200-day moving average line is regarded by some as the most important of all the trend indicators. It's admittedly simplistic, but still has significant psychological implications because so many traders still see it as a make-or-break level. * 7 Retail Stocks to Buy for the Second Half of 2019 There's modest encouragement in the fact that the weakness since March's high has been on relatively low volume. That suggests there's not necessarily a great deal of conviction behind the selling; investors are just biding their time.Conversely, the fact that the other aforementioned names, like most marijuana stocks of late, are falling is a red flag. Group-wide movement tends to indicate longer-lived, philosophical doubt. Analysts Still in DoubtStill, Cronos Group stock is a standout for all the wrong reasons. Chief among them is the fact that among all cannabis stocks, CRON stock remains one of the analyst community's least favorite.As of the most recent look, analysts collectively rate Cronos at a little less than a Hold … tiptoeing into Sell territory. Rivals New Age Beverages and Canopy Growth, for perspective, are considered a Buy and something that's almost a full Buy, respectively. Hexo (NYSEAMERICAN:HEXO) is also closer to a Buy than a Hold. Click to EnlargeReasons for the pessimism range from lack of clear capital spending plans to a sheer lack of story in an environment where a company's story is a powerful marketing tool. Given that the $1.8 billion investment Altria Group (NYSE:MO) made in CRON stock has now been closed for weeks as well, one would have expected a more definitive direction for a partnership than we've seen yet.More than anything though, analysts still take issue with the stock's crazy valuation.Cronos sports a $4.8 billion market cap, and though revenue of $6.5 million was only a fraction of what the company could be driving in just a few quarters, even the most optimistic of plausible output levels will fall short of justifying that sort of price. It's a reality made even more amazing considering analysts have cared little about other similarly frothy valuations among cannabis stocks. Wait and See on CRON StockIt's certainly possible CRON stock could dig its way out of trouble and use its 200-day moving average line as a launchpad rather than a trigger for more trouble. The stock's yet to break below it. * 10 Stocks to Sell for an Economic Slowdown Those hopes are fading fast though, as the broader realities of the legal marijuana business sink in. The most overvalued names in the business also make for the most susceptible targets. That's Cronos, to be sure.Whatever's in the cards, it's certainly not a time to step into the pot name. Newcomers will want to wait for a little more clarity before doing anything.The world will get a big dose of that clarity in the first half of August, when Cronos will be reporting its Q2 numbers.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Cronos Needs to Show the Market Something to Pull Stock Out of Funk appeared first on InvestorPlace.
The stock market is slowly but surely pushing higher. It seems as though the bulls are reluctant to run too far, too fast. At the same time, the bears simply can't garner any staying power when it comes to pushing this market lower. At least not while rate cuts are on the way. Let's look at a few top stock trades for next week. Top Stock Trades for Monday 1: Johnson & Johnson Click to EnlargeShares of Johnson & Johnson (NYSE:JNJ) were smacked lower on Friday, falling over 4%. The stock is approaching the same level we flagged earlier in the year, near $130.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis level is currently acting as support, but has played a key role over the past 12 months. If JNJ stock falls down to this level, it may be worth investors nibbling at on the long side. Keep in mind, J&J reports earnings next week. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond If it hold this mark on an earnings decline, that's even better. Top Stock Trades for Monday 2: Square Click to EnlargeWe had Square (NYSE:SQ) on watch for a break higher, and that's exactly what we've gotten this week. The stock is up big over the past four trading sessions, rallying over 10%.For the short-term traders in this name, it would be prudent to book some of these gains with SQ stock heading straight into prior resistance.From here, let's see how SQ stock behaves. Does it pullback and consolidate a bit? Do shares push through resistance, which turns to support?I would love to see SQ stock coil under this level for a few days while holding up above $80. A breakout could Square flying higher, but the more rest it has before the breakout, the more powerful the move can be. On a decline, see that $78 holds as support. If it doesn't, $75 is on the table. Top Stock Trades for Monday 3: Illumina Click to EnlargeIt was a tough day to be a shareholder in Illumina (NASDAQ:ILMN). The stock plunged more than 15% after management warned about a big shortcoming in earnings.The action on Thursday spoke clearly. However, investors used the pullback to the 21-day moving average as an opportunity to get long rather than an opportunity to exit the name once steep channel support gave way.Given how big of a run ILMN has been on, you can't blame dip-buyers too much on this one. One day later and the stock is down huge. Its inability to stay above the 200-day moving average near $317 or the 61.8% retracement near $311 doesn't bode well for bulls. Under prior downtrend resistance (purple line) just adds salt to the wound.The longer shares stay below $311, the worse off bulls are. Let's give this one a few days to see where it settles down at. If it reclaims the $311 mark quickly, then we at least have a point of reference to use on the downside. Top Stock Trades for Monday 4: Aurora Cannabis Click to EnlargeYesterday we wrote about the bearish setup in Canopy Growth (NYSE:CGC) with its descending triangle formation. On Friday the stock plunged more than 7% and Aurora Cannabis (NYSE:ACB) isn't doing much better, down more than 5%.ACB is setting up the same descending triangle formation that CGC is and it's playing out exactly the same. Below the $7 to $7.25 area is very troubling for ACB. A rally back to this area and a failure to reclaim it sets it up for more downside. * 7 Stocks to Buy for Monster Growth in the Second Half of 2019 Be careful with this one. I wouldn't touch this one on the long side with a chart like this.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 * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post 4 Top Stock Trades for Monday:JNJ, SQ, ILMN, ACB appeared first on InvestorPlace.
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Canopy Growth shares are getting walloped today just over a week after Canopy's Co-CEO Bruce Linton was ousted from the job. Yahoo Finance's Zack Guzman & Emily McCormick, along with Media Entrepreneur and Author Charreah Jackson discuss.