|Bid||0.00 x 800|
|Ask||0.00 x 1800|
|Day's Range||44.33 - 45.33|
|52 Week Range||24.21 - 59.25|
|Beta (3Y Monthly)||3.87|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Think BIG, a new brand of cannabis, is out to raise awareness for criminal justice reform — all while paying homage to hip-hop legend The Notorious BIG. The California-based social movement strives to promote art and creativity through the sale of recreational marijuana use. Think BIG Founder CJ Wallace and Co-Founder and President Willie Mack sat down with Yahoo Finance’s Julie Hyman and Adam Shapiro to break down how the company got started and what’s next for Think BIG.
Canaccord Genuity's Daniel Daviau on whether more pot M&A is ahead. With CNBC's Aditi Roy and Melissa Lee, and the Fast Money traders, Tim Seymour, Chris Verrone, Steve Grasso and Guy Adami.
As the presidential race continues to heat up, Democratic contender and former Vice President Joe Biden has come out in support of decriminalizing cannabis — but not of full legalization. “Nobody should be in jail for smoking marijuana,” he said. A myriad of cannabis-related bills were submitted in the House of Representatives, most of them aimed at protecting certain groups using medical marijuana, from military veterans to students.
LONDON, ON , May 17, 2019 /CNW/ - Tweed, Canada's leading cannabis brand has just arrived in London ! A local London licensee has collaborated with Alimentation Couche-Tard to bring the Tweed brand retail experience to the city, and we are proud to announce that our doors are now open! With a commitment to best-in-class customer service, quality assurance and a wide variety of products and accessories, Tweed has set the standard for recreational cannabis and we are so excited to bring the very first Tweed branded retail cannabis store in Ontario to London .
The "Cannabis Craze" had everyone and their brother buying up marijuana stocks. These cannabis stocks didn't have enough free-floating shares to cover the massive amount of buy interest leading them to skyrocketed at the end of 2018 far above their fair value.
Now here's something you don't see every day.Up in Canada, investment banker Seaport Global just announced a first of its kind offer to cart its investor clients around Canada aboard a "magic bus" -- they didn't call it that, so we will -- as part of a tour of cannabis production facilities operated by Canadian marijuana companies Aurora Cannabis (ACB), Hexo (HEXO), Canopy Growth (CGC), and Aphria (APHA).("Paging Willie Nelson. Your bus is about to depart the station.")Seaport's "inaugural get on the Bus tour" will depart Quebec on June 3 and continue cross country to Ontario, eventually ending on June 4, and provide investors a chance to quiz management teams on such fascinating subjects as "about forward capital allocation, potential market oversupply, global expansion plans, anticipated product/market development, and strategies for the US market."No word on whether refreshments will be provided.That's the headline news -- but seeing as this offer is limited to folks who know an "SGS salesperson" or "analyst team" to contact, it would appear that space on this magic bus will be limited to very well-heeled Seaport Global clientele. As for the rest of us, the great unwashed of marijuana investing, we may find more of interest in Seaport's executive summary of the state of the marijuana market that Seaport and its clients will be delving into next month.To wit, Seaport's Brett Hundley notes that right now, the Canadian cannabis market is worth about $1 billion, with demand for about 600,000 kilograms of marijuana (in all its forms) per year. (Which works out to one kilogram of generic pot product costing about $1,700 -- or about a buck-seventy per gram).Hundley sees this market growing about 10 times in size "over time," to $10 billion in annual sales, with eventual demand by weight equaling 5.5 million kg. (Or put another way, $1,800 per kilo, or a buck-eighty per gram).Now, we can see the economics students in class waving their arms and objecting that this doesn't sound right -- that as the marijuana market matures and supply of legal pot explodes, demand should go up and prices should come down. And we agree with you -- but this is Hundley's show. Hundley may also be factoring inflation into the picture, in which case, it's entirely possible that $1.80 a gram seven years from now will be a cheaper price than $1.60 a gram is today.Other points related by the analyst in his write-up, which may be of interest to investors lacking tickets to ride the magic bus: Hundley notes that currently, Canadian pot companies are producing pot at the rate of about 725,000 kg per annum -- which means more than 20% oversupply for a market that's currently only demanding 600,000 kg a year. The analyst thinks that over time, this oversupply will moderate. However, he also notes that producers plan to eventually produce more than 6 million kg of pot per year -- which is also more than Hundley estimated end-market demand of 5.5 million kg, seven years from now.Long story short: Marijuana is in oversupply right now, and could very well remain so in the future. Cannabis investors would like to snag a seat on Seaport's magic bus, and ask Aurora, Hexo, Canopy, and Aphria how they plan to rectify this situation.Good luck with that.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more on the stocks mentioned: * Analyst Sees Some Challenges in Aurora Cannabis (ACB) Stock * Hexo: The Cheapest Way to Invest in a Giant Market for Marijuana? * Is This Breakout the Time to Be Buying Canopy Growth (CGC) Stock? * Aphria (APHA): Growing Pains in the Cannabis Industry More recent articles from Smarter Analyst: * Gene Munster: Key Takeaways From Nvidia (NVDA) Earnings * Trade War? Top Analyst Says Alibaba (BABA) Stock Still a Buy * Why Cannabis Stock HEXO Has a Bright Future * The Green Organic Dutchman (TGODF) Stock -- Not Sinking Exactly, But Not Sailing Anywhere Fast
Only a few days after Canopy Growth (CGC) acquired a Spanish licensed cannabis producer, the company has announced a proposed deal to enter the U.S. market via the right to purchase Acreage Holdings (ACRGF) in the future. The move has high hopes for the U.S. government to approve cannabis at the federal level and makes the multi-state operators (MSOs) in the U.S. as the most attractive stocks going forward.A Right That Might Not HappenDue to listing requirements by the Toronto Stock Exchange and the NYSE, listed companies can’t own illegal operations. Since cannabis is illegal at the federal level, Canopy Growth is prevented from owning a U.S. cannabis company. The recent Farm Bill allows the company to enter the hemp market and CBD, but not pot.For this reason, Canopy Growth has to make a deal that involves the right to purchase Acreage once federally approved. The company is paying $3.4 billion to buy Acreage with an upfront cost of $300 million for this future right.The deal involves a $2.55 per share upfront payment to investors for waiting plus an agreement to receive 0.5818 shares of Canopy Growth once the deal closes. At the current stock price of $46, Acreage shareholders have a right to a Canopy Growth stock worth $26.76 plus the $2.55 payment. The stock only trades right above $23 on the deal.The problem for shareholders is that the outcome is unknown. The U.S. is likely to approve cannabis in the future, but no guarantee exists. Not to mention, where Canopy Growth trades at that point is another high risk as the company has aggressive global expansion plans such as the recent deal in Spain.Other U.S. MSOs. While Acreage is listed as a leading MSO in the U.S., the company trails other companies like Harvest Health & Recreation (HRVSF). Acreage is listed as having agreements for cannabis-related licenses in 20 states with rights to 87 dispensaries and 22 cultivation and processing sites.Harvest Health has a deal pending with Verano that gives the combined company the right operate up to 200 facilities in 16 states with 123 dispensaries. Harvest Health expects to have 70 dispensaries and 26 cultivation and manufacturing facilities open by the end of 2019.The backing of Constellation Brands (STZ) provides Canopy Growth with the cash and shares to promote Acreage to offer up to $1.4 billion worth of shares for future acquisitions. The proposal suggests that the company will look to rollup smaller companies during the waiting period likely placing a premium value on sub $1 billion cannabis companies in the U.S.TakeawayThe key investor takeaway is that Canopy Growth is making the anticipated splash to enter the U.S. cannabis market, though via a highly delayed right to buy Acreage in the future. Investors shouldn’t expect other U.S. MSOs to accept similar deals in the future with such deals locking in values based on current prices.Canopy stock went up on the news and could breakout to new all-time highs above $60. Regardless, the better stocks remain the pure plays on the U.S. cannabis market. Acreage is now on the acquisition trail and the inevitable U.S. entry by the other large Canadian LPs either via similar rights to purchase deals or once the cannabis if federally legal will make the U.S. companies more valuable.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Disclosure: The author has no position in Canopy Growth stock.Read more on CGC: * Canopy Growth (CGC): Piper Jaffray Wishes Upon a Marijuana Star (But Will Its Dreams Come True?) * Canopy Growth (CGC): Is This Spanish Acquisition Too Good to Be True? * Canopy (CGC): Seaport Cuts Estimates, Reiterates Neutral on the Cannabis Stock More recent articles from Smarter Analyst: * Gene Munster: Key Takeaways From Nvidia (NVDA) Earnings * Trade War? Top Analyst Says Alibaba (BABA) Stock Still a Buy * Why Cannabis Stock HEXO Has a Bright Future * The Green Organic Dutchman (TGODF) Stock -- Not Sinking Exactly, But Not Sailing Anywhere Fast
Are marijuana stocks on U.S. exchanges a good buy now? The marijuana industry gets a lot of hype, but look past the smoke and analyze pot stocks on their fundamentals and technicals.
After a revenue beat Tilray Inc (NASDAQ:TLRY) saw its stock jump 5% for the day. However, that optimism has faded rather quickly, and Tilray stock has not been able to capitalize on that momentum.Source: Shutterstock Unequivocally, it has been a wild ride for Tilray investors. Last fall, against a very frothy overall market and marijuana stocks going more mainstream, the stock price exceeded the $200 mark before getting cut down by three quarters, trading at less than $50 per share as of this writing. * 6 Chinese Stocks That Could Pop On a Trade Deal Still though, I remain cautious on Tilray stock. The company hit a major milestone by landing a partnership with Novartis AG (NYSE:NVS), the Swiss pharmaceutical company, late last year. That's certainly been a positive catalyst, but after all the hype, investors need to see meaningful progress toward a more profitable future.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Tilray Stock Has a Mixed First QuarterA lot of the focus immediately after earnings was around revenues. TLRY delivered a massive 195 increase in year-over-year revenues. The legalization of marijuana use in Canada for adults last year in addition to hemp food sales from Tilray's acquisition of Manitoba Harvest were big drivers.Gross margins also saw a slight increase, but despite these positive signs, net losses for the quarter increased dramatically. Last quarter $5 million to $30 million most recently. For a growth company, it's not necessarily unexpected. Expansion costs money as companies need to lay the foundation for future endeavors, but the point is that it's naive to look only at the revenue beat and think TLRY stock is headed for the sky.Total kilogram equivalents sold did double to 3,012 kilograms, but compare that to fellow competitor Canopy Growth (NYSE:CGC) that sold 10,102 kilogram equivalents in the most recent quarter and has a higher pricing structure.TLRY is still doesn't have pricing figured out seeing as average net selling price per gram decreased over the prior year period. As the space gets more and more competitive, TLRY needs to optimize this quickly as increasing supply toward medical and consumer purposes will put pressure on prices. The trend is not going in the right direction. Tilray Stock Is OvervaluedUltimately, TLRY stock looks lofty in terms of valuation. This, of course, does not mean the stock cannot get more expensive from here, but it's not a screaming buy despite some decent first quarter numbers.Tilray's consensus forward P/E is the kind of number that makes you triple check because you don't think it can be right: 1,111x. Compare that 357x for CGC. It's a relative game with P/E ratios, so even though 357x may also sound extraordinarily rich, it goes to show that 1,111x is completely irrational.There is just so many ways for that multiple to get rerated downward, again and again. Final Note on Tilray StockThe first quarter earnings was a bit of a mixed bag. The market gave credit where it was due but no more than that, recognizing the weak points in the financials.Tilray has made progress on expansion via M&A, which may bolster future earnings, but only time will tell. There is a lot of success already built into the current valuation, meaning that TLRY can't miss a beat. As of this writing, Luce Emerson 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 that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Don't Let the Great Q1 Numbers Fool You into Buying Tilray Stock appeared first on InvestorPlace.
Marijuana stocks like Cronos (NASDAQ:CRON) look a bit creaky at the moment, and CRON stock may be Exhibit A in the case that the group is stalling out. Cronos stock has dropped by over one-third just since early March, with the near-term question whether a recent bottom can hold.Source: Shutterstock I'm skeptical it will. Valuation is a bit more reasonable than it was earlier this year, when I thought Cronos Group stock was overvalued. But CRON is hardly cheap. Analysts have turned bearish. And that bearishness seems to coincide with the core problem here.Cronos simply hasn't driven the right kind of narrative for a marijuana stock at this valuation. Looking around the sector, there are concise, obvious bull cases for most of the well-covered stocks. Outside of the nearly $2 billion in cash coming in from Altria (NYSE:MO), Cronos lacks that case. And until that changes, Cronos is likely to struggle.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 6 Chinese Stocks That Could Pop On a Trade Deal The Need for a StoryInvesting in cannabis stocks at the moment isn't about the fundamentals. This is an industry at the very beginning of its growth. Price/earnings and even price/sales multiples are enormous and not necessarily comparable. The fundamental toolkit an investor might use to value a mature company simply doesn't apply in the sector at the moment.And so both the decision to invest in the sector at all, and which cannabis stock to choose, come down largely to long-term projections and even feel. Will the industry grow for years, as proponents argue? Is the oversupply already seen in legalized U.S. markets like Oregon a long-term risk? When does broader U.S. legalization arrive? Who of the myriad publicly traded cannabis plays wins and who loses?In that type of investing environment, a stock needs a succinct bull case, an elevator pitch so to speak. And most of the well-covered cannabis plays have that type of case. Canopy Growth (NYSE:CGC) is the early leader, and thanks to Constellation Brands (NYSE:STZ,NYSE:STZ.B) has the largest war chest. Aurora Cannabis (NYSE:ACB) is taking so many shots on goal that it's likely to score on at least one of them. Charlotte's Web (OTCMKTS:CWBHF) is the pure play on CBD (cannabidiol) oil. Even struggling Tilray (NASDAQ:TLRY) may have positioned itself to win if capacity gets overbuilt. And so on. What Is the Story Behind CRON Stock?What's the story behind CRON stock, however? The company has a ton of cash coming in, to be sure. But its production capabilities aren't particularly impressive: as The Motley Fool noted, Cronos isn't even in the top ten in terms of available capacity. Its Spinach retail brand doesn't appear as strong as those from Canopy or Hexo (NYSE:HEXO). Its positioning in the Canadian adult-use market seems behind that of many peers.Even analysts somewhat favorable to the stock aren't sure what to make of it, as James Brumley noted earlier this month. CIBC World Markets analyst John Zamparo wrote that the company hadn't given much colors on its plans for actually using that capital. Cannacord Genuity cited "a number of strategic initiatives that could eventually unlock longer-term value."Those aren't compelling points in favor of Cronos stock. Rather, they're something more akin to a "poke and hope" strategy. Cronos has a lot of cash, and the marijuana industry should grow, so the company will eventually figure something out. That kind of case might work in the middle of 2018, or the beginning of 2019, when marijuana stocks on the whole are soaring. As we've seen of late, however, it can't work forever. Cronos Group Stock Isn't CheapMeanwhile, Cronos remains priced in line with those peers who have better stories - and better growth. Cronos' Q1 report wasn't particularly impressive either fundamentally or in terms of management commentary. The company did turn a profit but only thanks to non-cash benefits, some of which related to the Altria deal. On an operating basis, Cronos continues to lose money.That's not a problem on its own: most stocks in the space are posting operating losses as they build out production, processing, and supply chain capabilities. But CRON, relative to revenue, continues to be valued roughly in line with the leaders of the space.That's not going to hold if Cronos can't prove that it will be a leader long-term. Right now, it's not making a good enough case - and until that changes, Cronos stock is going to underperform. And with marijuana stocks right now seeming to stall out, that in turn suggests that CRON is headed below $15.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) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Without a Better Story, Cronos Stock May Have Further to Fall appeared first on InvestorPlace.
As things stand now, cannabis firm Cronos Group (NASDAQ:CRON) is a two-faced investment. CRON stock recovered well from late last year's volatility, as CRON stock is up nearly 49% since the beginning of January. But Cronos stock shed 30% since March 1, putting a sour taste in recent buyers' mouths.Source: Shutterstock Fundamentally, Cronos has the same split personality. Last week, the company reported its first-quarter results. On paper, Cronos delivered a strong beat. Analysts' consensus estimate pegged earnings per share at a loss of two cents. Instead, EPS came in at 36 cents on the positive end of the scale.Moreover, Cronos rang up 6.47 million CAD, or $4.8 million, of net sales. That was a massive 120% increase from the year-ago quarter. But as The Motley Fool's Sean Williams noted, the cannabis firm benefited from multiple one-off events. All things considered Cronos Group loses money on its operations.InvestorPlace - Stock Market News, Stock Advice & Trading TipsInvestorPlace Managing Editor John Kilhefner has also joined in on the fun. Kilhefner bought CRON stock because, in his words, he was "greedy." He wanted a "quick short-term boost" and what better place to get that than with marijuana? * 6 Chinese Stocks That Could Pop On a Trade Deal However, Kilhefner now regrets buying Cronos stock. For one thing, after clearing his thoughts, he doesn't view marijuana as an investment but rather, pure speculation. More critically, the reality of cannabis hasn't come anywhere close to the hype. For instance, Canadian cannabis stores are selling fewer botanical products than previously anticipated.With that negative backdrop, it's no wonder why investors are have mixed views on CRON stock. Still, I think Kilhefner and others may want to consider another massive catalyst: China. CRON Stock Has Received a Massive TailwindOne of the more surprising developments in geopolitics recently is that the trade war is back on. For weeks, it appeared that the Trump administration and its Chinese counterpart were ready to make a deal.But the deal appears to have fallen through. This latest freeze in U.S.-China relations may not thaw for quite some time. As InvestorPlace's William Roth explained, our military exercises in the South China Sea appeared to have been carefully orchestrated.What does that have to do with CRON stock? Everything. Trump has pushed himself into a corner economically. The initial round of tariffs already hurt many businesses across multiple sectors. With the President threatening even harsher penalties, astute market observers are bracing themselves for a rough landing.Of course, one sector that has absorbed substantial damage is agriculture. Already weakened from demographic challenges, American farmers have been put in a vice grip by tariffs. Since much of this country's agricultural base is located in conservative regions, Trump can't play hardball with the Chinese without incurring political penalties.That is where CRON stock and other major marijuana names like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB) come into the picture. If this "trade war 2.0" worsens - again, Roth forwarded evidence that it will - full recreational legalization is on the table.Despite growing political momentum, getting rid of the federal government's Schedule I classification appeared to be a pipe dream. Even during the Obama administration, marijuana tip-toed a delicate balance between states' rights and federal oversight.But right now, there's a good chance that our economy will enter a recession. Trump will either have to give in to the Chinese or make concessions on the cannabis legalization front. I'd say that's a long-term benefit to CRON stock. Don't Give Up on Cronos Stock!If Kilhefner hasn't dumped his shares of Cronos Group stock, I'd recommend he bite the bullet and wait. Politically, what's currently happening is the best thing ever for the marijuana industry.If I know anything about the Chinese, they hate losing face. If I know anything about Trump, he hates losing, period. Both Trump and his counterpart, President Xi, are egomaniacs who are unwilling to concede an inch to each other.In this situation, China must rely more on its allies, Russia and North Korea. We, on the other hand, are in a great position: we don't need dictators and despots to prop up our economy. Instead, we just need to convince roughly half our citizens that they won't be condemned to eternal damnation for their botanical indulgences.While religion has been historically very strong in this country, that goes away in a recession. The easy fix is legalization, or at least a much more tolerant (and transparent) policy.I agree with Kilhefner that CRON stock is a gamble. However, I disagree with his conclusion. Now is the best time to consider making that bet.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 6 Trade War Stocks With a Lot of Risk * 7 Bond ETFs to Buy * 10 Stocks That Could Squeeze Short Sellers, Including CGC Compare Brokers The post How Trade War 2.0 Benefits Struggling Cronos Stock appeared first on InvestorPlace.
Every so often, Wall Street experiences a craze that is fascinating like Bitcoin in 2017. But now it's the cannabis stocks and Tilray (NASDAQ:TLRY) has been a wild one to watch. It went public last year and within two months it had rallied 1,000%. 2019 has not been kind to TLRY stock as it's down 32% year-to-date, yet it is still up 110% since its inception. Compare that to the S&P 500, which is barely up 2% in a year.Source: Shutterstock Today's write up is to encourage those who like the stock to hold it and to also discourage those who want to short it. For full disclosure, I am not long Tilray nor am I an uber fan or a perma-bull of it.While the IPO was orderly, the period that followed was bonkers. In September it spiked to its $300 all-time high from $93 in three days. Clearly, it was a massive short squeeze where buying begot buying until the equilibrium was restored.InvestorPlace - Stock Market News, Stock Advice & Trading TipsUnfortunately for the Tilray stock bulls that was the high mark and it has traded horrendously since then. It is now below $50 and it can't sustain a rally. It's not so much that the fundamentals have deteriorated greatly. It is simply that the stock trade broke from the massive artificial rally. It takes time to restore the natural price action.TLRY still has not grabbed the attention of major corporations. Canopy Growth (NYSE:CGC) and Cronos (NASDAQ:CRON) got billions from Constellation Brands (NYSE:STZ) and Altria (NYSE:MO). Tilray is still going at it alone and it's struggling. It will need better alliances or it risks falling behind.Before you send me hate mail on this, I am not calling TLRY stock dead. Cannabis stocks are a special breed in this early stage. They are trying to establish the industry on Main Street and they may not be able to always impress Wall Street in the short term. There will be ups and downs but the bullish thesis is too diverse in scope to call it dead now. * 10 Baby Boomer Stocks to Buy So what's a fair value for TLRY stock? There is none because at this point they all carry massive market capitalization but with a tiny fraction of it in sales. TLRY's cap is $6 billion and it recently reported $23 million in sales.To that, management reported a big top line beat and 195% growth year over year. The stock spiked 6% on the headline and it is holding the zone decently given the overall stock market jitters. More importantly, its deliveries doubled year-over-year and that is the focus of many experts. They can't grow into their potential if they cannot deliver it as well as improve their margins along the way.The cannabis industry is still trying to adjust to its new legal status. This is a trend that is spotty for now but will grow its ubiquity with time. The U.S. market is an important one and many states will soon follow the ones that have already legalized it. But on the federal level, it may not be that easy. Luckily there are dozens of other countries for TLRY to potentially serve. Bottom Line on TLRY StockThe hoopla around cannabis stocks like Tilray is that they will disrupt so many huge markets that their upside potential should also be massive. The recreational use is what first comes to mind to most people but there are so many more like medicinal applications, potables and edibles. Maybe one day pot-based drinks will replace some of the soda, wine and beer consumption. * Top 7 Dow Jones Stocks of 2019 -- So Far Skeptics would call it a craze. Maybe, but unlike bitcoin where the concept escapes 99% of all people, everyone knows what cannabis is and is immediately interested in learning more about it. The allure of it is undeniable as I see evidence of the interest everywhere I go.So the bottom line is that although the experts can dismiss Tilray based on valuation and its distance from its all-time high, they would be making a mistake. Because as big as the potential of this multi-headed future area of business is, it will be impossible to quantify here let alone judge it right. Either avoid it altogether or plug your nose and buy the stock for the long term.We saw the skeptics lose fortunes trying to short Amazon (NASDAQ:NFLX) and Netflix (NASDAQ:NFLX). Netflix still gets a pass on profitability because of its global expansion potential as should most cannabis stocks … including TLRY stock.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. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post The Bullish Thesis for Tilray Stock Is Still Alive and Well appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) moved higher after announcing a deal with its investment arm, Canopy Rivers (OTCMKTS:CNPOF). This offers some relief to CGC stock, which had returned to levels not seen since before they announced their buyout intentions on Acreage Holdings (OTCMKTS:ACRGF).Source: Shutterstock Unfortunately, Canopy Growth stock seems to need more. CGC has again sold off after briefly crossing the $50 per share mark in late April. While the deals with Canopy Rivers and Acreage boost the long-term prospects of Canopy Growth Corporation, they also show the difficulty of breaking CGC stock out of its current trading range. Canopy Growth Continues to Improve Market PositioningCanopy Rivers announced that the portfolio company it owns, PharmHouse Inc., will commit more of its production to Canopy Growth. CGC will now buy an additional 20% of PharmHouse's output for the next three years. PharmHouse had previously committed 10% of its flowering space to Canopy Growth.InvestorPlace - Stock Market News, Stock Advice & Trading TipsStill, despite what the PharmHouse deal means to Canopy Growth, much of the focus has settled on mergers and acquisitions (M&A). The latest M&A deal for Canopy involves a buyout of New York-based Acreage Holdings. However, in reality, one could better describe this "agreement" as an option. The deal will not close until recreational weed becomes legal across the U.S. * 7 Stocks to Buy that Lost 10% Last Week I agree with my InvestorPlace colleague Tom Taulli that the alliance with Constellation Brands (NYSE:STZ) alliance holds Canopy Growth in good stead. I also believe the company has positioned itself for a leadership position in the U.S. in both hemp and cannabidiol (CBD). This benefits the firm without regard to what happens with the Acreage deal. I also see Canopy Growth remaining the market leader in North America when U.S.-based companies can operate with full legal status. Investors Should Separate Canopy Growth, CGC stockStill, what helps Canopy Growth may or may not boost Canopy Growth stock. The current hype regarding marijuana stocks renders the price-to-sales (P/S) ratio of around 135X meaningless. However, it also leaves investors without a valuation-based metric with which to evaluate CGC stock.Hence, this leaves investors with the charts as a guide. For all of the hype, Canopy Growth stock has twice pulled back after spiking above $55 per share in intraday trading. In recent weeks, even the Acreage deal could not keep CGC stock above $50 per share. Moreover, since Jan. 15, it has rarely moved below $40 per share or above $50 per share. CGC Stock Has Become Range-BoundDespite its elevated multiple, I do not think it will break through the lower end of the range unless a recession occurs, or the U.S. suddenly makes cannabis legal.For now, traders have focused on when and how CGC stock will break through on the high end of the range. The elevated P/S ratio will struggle to go even higher without further stimulus. However, seeing the rally fizzle after the stock moved past $50 per share could make one wonder whether stimulus truly helps. Moreover, seeing marijuana stocks (including CGC) tank after weed became officially legal in Canada remains fresh on investor's minds. It also shows the strange and powerful phenomenon of illegality driving cannabis equities.Like most, I believe CGC stock will trade at higher levels years from now. However, until we see the stock stay above $55 per share, I do not think that the higher stock price will come in the near term. Final Thoughts on CGC StockCGC stock trades near the high end of its range, and I expect CGC will stay in the range. The PharmHouse deal serves as yet another confirmation that the growth story remains intact for Canopy Growth. However, it will likely not have a material effect on Canopy Growth stock. * 10 Stocks to Sell Before They Tank Your Portfolio Moreover, before the company announced this deal, CGC had fallen back to levels it saw before they announced the Acreage Holdings deal. Simply put, CGC stock has become range-bound.The prospects of the cannabis industry should keep Canopy Growth stock at an elevated multiple in the near term. However, even a major coup such as the Acreage deal has failed to put CGC stock back on a growth trajectory.The Acreage and the PharmHouse deals show that Canopy Growth has both the strategic vision and the product needed to lead the marijuana industry. Unfortunately, translating this insight into near-term growth for Canopy Growth stock will prove more elusive.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Why Canopy Growth's Deals May Not Translate Into Gains for CGC Stock appeared first on InvestorPlace.
There may very well be at least three reasons to not sell Canopy Growth (NYSE:CGC) stock. But the price chart is warning investors that they shouldn't buy CGC stock now. Let me explain.I enjoy reading InvestorPlace contributor Luke Lango's take on the markets. His analysis personally turned me on to both Shopify (NYSE:SHOP) and Twilio (NYSE:TWLO) long ago when many other traders and financial pundits were warning of their downside risks well before their subsequent, massive, triple-digit-percentage gains. KAAACCHHINGG! * 6 Chinese Stocks That Could Pop On a Trade Deal But getting back to Canopy Growth stock, this week Luke wrote that investors shouldn't sell Canopy Growth. The first reason he cited was trade-war headwinds being overblown and not really an issue for CGC. I totally agree with that. Still, that doesn't make Canopy Growth stock worth buying.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLuke also wrote that the slowdown in Canada's cannabis market isn't actually terribly alarming and discussed the tailwind of the still-untapped U.S. market. Those points are good reasons to not sell CGC stock, but they fail to make Canopy Growth stock worth buying at the moment.Now don't get me wrong. My caution on Canopy Growth stock doesn't mean that I'm advocating shorting CGC. I'm nowhere near ready to put Canopy Growth stock in the same boat as Tilray (NASDAQ:TLRY) whose fortunes have gone up in smoke over the past several months. However, considering the volatility of the cannabis market and the CGC stock chart, the shares aren't close to worth buying if history is any indicator. CGC Stock's Daily ChartThe volatile and some might say temperamental behavior of CGC stock has foiled bulls' attempts to exploit its positive trend using breakout strategies. That is illustrated by higher and above-average volume buy signals sent by triangle patterns, a classic short-handle consolidation and a very recent failed breakout as relative highs were cleared.But Canopy Growth stock has also been somewhat of an equal opportunity trap for bears too.The chart of CGC stock depicts a couple of breakdowns of CGC that were reversed. There was last summer's out-of-left-field explosive gain on partnership news with beverage giant Constellation Brands (NYSE:STZ). And earlier this spring a bear flag similarly failed after breaking down courtesy of a rally a short while later.Of course, some bulls might be quick to point out that, during both bearish patterns, CGC did not fall below the support provided by its 200-day simple moving average. That incidentally made CGC stock ripe for buying. That's true, but there's always a technical line on the price chart somewhere that drive buy decisions which work out favorably. The Bottom Line on CGCIn our view, CGC stock's squiggly price line is a tricky one to trade. And given the shares' history of volatile failures in the wake of breakdowns and breakouts, today's pullback pattern isn't a reason to sell Canopy Growth, but it does not make CGC worth buying just yet.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 that Lost 10% Last Week * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Service Stocks That Can Win the Trade War -- According to Goldman Sachs Compare Brokers The post Why Canopy Growth Stock Isnat Worth Buying Yet appeared first on InvestorPlace.
In the latest trading session, Canopy Growth Corporation (CGC) closed at $45.05, marking a -0.77% move from the previous day.
Since their inception, marijuana stocks attracted significant attention. Due to both investment sentiment - and let's face it, raw emotions - the cannabis sector absolutely skyrocketed. But now, the segment is attracting attention for failing to live up to analysts' expectations. Is the honeymoon phase over for weed?Hardly! While cannabis firms have produced some disappointing results during earnings season, that's no reason to abandon them. For one thing, the resurgent U.S.-China trade war is incredibly favorable for marijuana stocks to buy. Prolonged tensions will almost surely cause us economic damage. An easy fix here is to legalize weed and fully open the door to a multi-billion dollar industry.Another reason to stay the course with marijuana stocks to buy is the medicinal-cannabis market. Currently, 33 states have legalized medical marijuana, which is indirectly an indictment against the pharmaceutical industry. As I've argued many times before, pharmaceuticals must take at least some responsibility for the opioid crisis. This story alone has converted many people who have realized the benefits of all-natural treatments.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, medical marijuana is becoming a popular and potentially profitable exported good. We all know that progressive Europe is receptive to cannabis-based therapies. But more shocking is that conservative Asian countries notorious for their draconian anti-drug policies have demonstrated tolerance. Thailand became the first Southeast Asian country to legalize medical marijuana, while South Korea is the first East Asian country to jump onboard. * Top 7 Dow Jones Stocks of 2019 -- So Far No matter how you look at it, this development strongly benefits the "botanical" industry. Here are the best three marijuana stocks to buy right now: Aurora Cannabis (ACB)Source: Shutterstock Aurora Cannabis (NYSE:ACB) recently issued its earnings results for the first quarter of 2019. Let's just say the print wasn't exactly great for ACB stock. Although Aurora Cannabis' net-revenue haul of 65.2 million CAD exceeded the year-ago quarter's tally by a country mile, it missed analysts' consensus target of 67.6 million CAD.Also a miss was earnings per share. Wall Street expected a loss of 4 cents per share, but Aurora instead delivered a loss of 16 cents. With such a wide gap, conventional wisdom dictates that you should avoid ACB stock.Actually, though, even if Aurora Cannabis hit its metrics with flying colors, I wouldn't pay much attention. Why? Because this is a marathon investment toward an unprecedented sector. As such, you'll find nearer-term noise. Ignore it.The key here is that the management is positioning itself for dominance in the lucrative medical-marijuana market. Its acquisition of Whistler Medical Marijuana indicates that the focus is on quality, not quantity. When weak marijuana stocks get flushed out, ACB will remain standing. Canopy Growth (CGC)Source: Shutterstock Undeniably, a motivating factor to buy shares of Canopy Growth (NYSE:CGC) is the company's international presence. Primarily, it puts up a strong showing in the European mainland. Currently, Canopy is pushing both westward and eastward in the region. However, the ultimate prize for CGC stock and others is the U.S. market.Of course, this is seemingly a pipe dream due to our country's (misguided) Schedule I classification of marijuana. Still, CGC stock jumped mid-April when Canopy announced a contingent offer to buy out Acreage Holdings (OTCMKTS:ACRGF). Canopy will pay $300 million upfront if the U.S. legalizes marijuana.Many botanical advocates argue that Schedule I is a relic of the ignorant and racist past. However, it's still federal law, which means cannabis firms in green-friendly states are still technically at risk. * 7 Stocks to Buy that Lost 10% Last Week But thanks to the U.S.-China trade war, I genuinely believe that full legalization is nearing reality. A prolonged conflict with the world's second-biggest economy will invariably hurt our own fiscal health. That's why the U.S. has to explore marijuana if they insist on playing hardball with China. If so, look for CGC stock to soar. Hexo (HEXO)Source: Shutterstock If you're like most folks who learned about marijuana stocks to buy late in the game, you're probably hesitant on exposing yourself to the top-tier names. After all, we see them splattered on investment headlines all over the internet. If that's you, you might want to check out Hexo (NYSEAMERICAN:HEXO).For starters, Hexo is an understated name. It generates interest, of course, but not nearly as much as the top dogs. I believe that benefits HEXO stock and is partially the reason why shares have steadily made robust gains. Year-to-date, the cannabis firm's equity is up over 113%.That said, HEXO stock has much more upside remaining over the long term. Renowned alcoholic beverage-maker Molson Coors Brewing (NYSE:TAP) has a partnership with Hexo to develop cannabidiol (CBD) infused, non-alcoholic drinks.CBD recently gained mainstream recognition because it offers the cannabis plant's health benefits, but without levering a negative psychoactive effect. In other words, the compound is a perfect gateway for consumers to try other cannabis-based products.This is a partnership that provides multiple natural synergies. Even though it's not quite a household name, you should put Hexo on your list of marijuana stocks to buy.As of this writing, Josh Enomoto 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 Retirement Stocks That Won't Wilt in a Bear Market * 5 Consumer Stocks Ready to Push Higher * 3 of the Best ETFs to Buy for a Play on Gold Stocks Compare Brokers The post The 3 Best Marijuana Stocks to Buy Right Now appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) just isn't getting as high as it used to. But CGC stock isn't alone. The marijuana stocks have lost a lot of their buzz lately. The sector fund, the Alternative Harvest ETF (NYSEARCA:MJ) has dropped roughly 15% from its recent highs in March. On top of that, its current $33 share price is well off the $45 level where marijuana stocks peaked just before Canada's legalization went into effect last fall.Source: Shutterstock CGC stock has fared better than many of its rivals. But its stock hasn't been able to hit new highs in awhile either, as the $50 price level has been key resistance. With the company making major acquisitions ahead of earnings and short sellers betting the farm against the stock, expect CGC stock to make big moves in coming weeks. CGC Stock ConsAcreage Deal Isn't A Standard Acquisition: Canopy Growth recently announced a deal to purchase Acreage Holdings (OTCMKTS:ACRGF). This deal is a rather odd one for a number of reasons.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy that Lost 10% Last Week To start with, the deal is contingent on the U.S. legalizing marijuana federally. The deal is structured with a 90 month (7 and a half years) time limit. It will be terminated if federal legalization doesn't occur within that time frame. As it is, Canopy is taking some risk. That is because it is paying a not insubstantial $300 million upfront for the deal, along with far more than that in CGC stock once the deal closes.Given that the deal could take ages to close, Canopy could be giving up a lot of value with its shares. That will depend on where the share price is in coming years. Additionally, there's a risk that Acreage shareholders will oppose the deal, as Canopy is offering a rather modest premium for the acquisition.CGC Stock Hitting Major Resistance: From a technical analysis standpoint, Canopy Growth stock is starting to get itself into trouble. For the better part of a year now, CGC stock has stopped dead in its tracks every time it reaches near the $50 mark.Canopy Growth stock first hit the $50 level last fall. It spent the better part of September trading around that figure. Shares subsequently dumped all the way to $25. But CGC stock bounced back, hitting $50 again in January. That rally petered out, and shares declined 20%. In April, CGC stock again briefly reclaimed the $50 level but has already dropped back almost 15% since that point. $50 is turning into a major resistance point for Canopy stock. Going forward, bulls need to get the stock to close above $50 before serious trading momentum can get going again.Valuation Is Still Strained: Canopy Growth -- and most of its publicly traded rivals that focus on recreational marijuana -- have yet to deliver compelling earnings. In fact, for many firms, free cash burn has actually gotten worse. Companies keep ramping up their growth expenses without enough revenues to offset those costs just yet.Already, we're starting to see issues on the revenue side. The price of recreational marijuana keeps dropping, sales volumes are flattening out, and producers seemingly have a huge oversupply of marijuana on hand. Canopy still has time to find its way to profitability thanks to the Constellation (NYSE:STZ) cash infusion. But it's burning through that money awfully quickly.Not only are the operations losing money, but it keeps making big purchases like Acreage and the German deal announced earlier this month for close to another $250 million. CGC Stock ProsDeals Could Pay Off Big: While these latest deals certainly come with risk, they could pay off for Canopy. The German deal, acquiring the C3 Cannabinoid Compound Company looks interesting in particular. C3 has developed various products to treat pain in cancer patients, among other uses.C3 already has a healthy $30 million or so in annual revenues. This suggests that Canopy only paid about 8x annual sales for the deal. Compared to many of the deals going off in the hyped-up marijuana space, that's a defensible valuation. $30 million in (presumably fast-growing) annual revenues will be enough to move the needle for Canopy Growth more generally as well.CGC Stock Holding Up Better: Canopy Growth stock is having a mighty difficult time trying to break out above the $50/share level. But at least it is still somewhere near its recent trading highs.Other pot stocks have gotten crushed lately. Cronos (NASDAQ:CRON), Aurora (NYSE:ACB) and Aphria (NASDAQ:APHA) have all fared worse than Canopy. There's a lot of value in being the strongest performing major stock within the industry. When marijuana stocks rally as a group, it may be enough to power CGC stock past that $50 barrier and onward to new all-time highs.Short Squeeze Potential: As I sometimes warn, you generally shouldn't base a whole investment thesis on the potential for a short squeeze. That said, if you are already considering taking a long position, high short interest could be the thing that causes the stock to run in the short term.Canopy Growth's stock has an incredible 75 million shares shorted (on its U.S. listing). That makes up 35% of the float. This is among the highest short ratios you'll find out there for a large widely-traded stock today. Clearly short sellers are betting on Canopy's next earnings report being a dud. That would be in line with what other pot players have produced recently. But if they're wrong, the stock could make a violent move higher. CGC Stock VerdictI don't see this as a great time to get into CGC stock. The firm has outperformed its other marijuana peers recently. But a poor earnings report could drive CGC stock right back down with the rest of the pack. Given how strong the $50 resistance level has been, bears are logically pressing their bets here. * 3 Reasons Not to Sell Canopy Growth Stock If Canopy Growth can deliver a strong earnings report, that would change everything. But until investors see a clearer path to profits and a more stable business trajectory, odds will continue to favor the bears. I'd stick to the sidelines in Canopy stock for the time being.At the time of this writing, Ian Bezek held no positions in any of the aformentioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Retirement Stocks That Won't Wilt in a Bear Market * 5 Consumer Stocks Ready to Push Higher * 3 of the Best ETFs to Buy for a Play on Gold Stocks Compare Brokers The post Should You Buy Canopy Growth Stock? 3 Pros, 3 Cons appeared first on InvestorPlace.
Aurora Cannabis Inc (NYSE: ACB) shares bounced back Wednesday after a mixed fiscal third-quarter earnings report. Carey said Aurora’s third-quarter results were a bit soft compared to his expectations, but investors should expect the company’s numbers to be volatile on a quarter-by-quarter basis in the near term. The most important takeaway from the quarter is Aurora reiterated its fourth-quarter guidance for 25,000 kg of cannabis ready for sale, positive EBITDA and improving margins heading into fiscal 2020.
Trade War Intensifies, Huawei In Crosshairs Continuing to employ the excuse of national security, US President Donald Trump has upped the ante on his personal trade war with China by practically banning Chinese telecom carrier Huawei from doing business in the US. The Commerce Department will add Huawei to its “entity list” where it judiciously […]The post Market Morning: Huawei Heckled, Alibaba Winning, Aurora On US Market appeared first on Market Exclusive.
has been recommended by Jim Cramer and it was mentioned again last night on his Mad Money program. In the daily bar chart of CGC, below, we can see prices in a large ascending triangle formation. CGC shows higher lows in December and April and roughly the same highs in the $50-$55 area going back to September.
After years of hype, pot stocks finally went parabolic in mid-2018 after big money started to enter the space. Some called the parabolic move higher in pot stocks a bubble. Others called it an opportunity. The latter group was right. Turns out, pot stocks aren't Bitcoin 2.0. Instead, pot stocks have great long term growth fundamentals, rooted mostly in the fact that current trends imply that recreational cannabis will one day be as big as (if not bigger than) the $500 billion-plus global alcoholic beverage and tobacco markets.Source: Shutterstock At the head of the group is Canopy Growth (NYSE:CGC). Canopy is the unparalleled leader in the fully legal Canadian cannabis market. They also have one of the largest production footprints in the cannabis industry, a $4 billion investment from Constellation Brands (NYSE:STZ) on the balance sheet, and a deal in place to acquire big U.S. cannabis company Acreage once cannabis becomes fully legal in the U.S.In other words, Canopy Growth is the runaway leader in the global cannabis market, and projects to be the leader of this potential $500 billion-plus industry in the future. That's why CGC stock is up 60% year-to-date, and 90% over the past year.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Retirement Stocks That Won't Wilt in a Bear Market But CGC stock has run into some turbulence recently. Over the past three weeks, CGC stock has dropped nearly 20% off its late April all time highs.Investors shouldn't be concerned about this weakness. Instead, they should embrace it. This weakness is nothing more than an opportunity to accumulate a long-term winning stock at a winning price. Why? There's three big reasons why investors shouldn't sell Canopy Growth stock here. Those reasons are as follows. Trade-Related Headwinds Could Reverse CourseThe first big reason not to sell CGC stock here is that the headwinds which have sparked the sell-off aren't all that relevant -- and they could reverse course pretty soon.CGC stock didn't fall in isolation. It dropped alongside a market meltdown which was sparked by escalating trade war tensions and a fresh round of tariffs. But none of this is all that relevant to Canopy Growth, which is a Canada-based cannabis company that gets most of its revenue from Canada and doesn't have much U.S-China trade risk or exposure. Thus, macro headwinds are creating unnecessary weakness in Canopy stock.Further, these headwinds could reverse course soon. U.S. President Donald Trump has married himself to the stock market, and this fresh round of tariffs has a grace period for in-transit goods. That combination ultimately implies that the U.S. wants to get a deal done soon. China does, too, since the entire 2019 rebound in their economy has been predicated on improving trade conditions. As such, it's fairly likely these two nations reach a trade agreement fairly soon, in which case current macro headwinds will soon turn into macro tailwinds, and the current sell-off in CGC stock will turn into a rally. The Canadian Market Will Be Just FineThe second reason not to sell CGC stock is that concerns related to a Canadian cannabis market slowdown are overstated.There have been some concerns that the Canadian cannabis market is slowing. Those concerns stem from Canadian cannabis company Cronos (NASDAQ:CRON) reporting weaker-than-expected first-quarter numbers, as well as new survey from Dalhousie University which implies that enthusiasm for legal edibles isn't all that high. There are also some new licensing rules at play in the Canada market which could exacerbate the ongoing supply shortage problem, which has led to unimpressive cannabis sales ramp in early 2019.But, these are all near-term concerns. In the big picture, young consumers globally like to smoke weed more than they like to drink alcohol, and that will ultimately manifest itself into big demand globally. Sure, demand may be fickle today, but that's probably because the industry is so new, consumers don't know how to buy cannabis legally at scale, and there are supply shortages everywhere. All these things will get fixed over time. As they do, near-term headaches will turn into long-term gains, and that will ultimately power CGC stock way higher. The Big U.S. Market Tailwind Has Yet to ArriveThe third reason not to sell CGC stock is that the stock's biggest catalyst hasn't even arrived yet.In the cannabis world, the Canadian cannabis market is small peanuts. Most analysts peg it as somewhere around a $10 billion potential market. The golden goose here is the U.S. cannabis market, which is pegged at a $100 billion potential market, or roughly tenfold that of the Canadian market. Thus, all these near-term concerns surrounding supply shortages in the nascent Canadian cannabis market are really small in the big picture.In that big picture, it's all about the U.S. market, which Canopy is set to dominate thanks to its deal to acquire Acreage upon legalization of cannabis in the U.S. That huge catalyst hasn't even arrived yet. Selling a stock before its big catalyst has even arrived is short-sighted. * 7 Forever Stocks to Buy for Long-Term Gains Bottom Line on CGC StockCGC stock has been a big winner over the past year and in 2019 for a reason: this is a global cannabis company that is in the first inning of a huge, long-term growth narrative that could one day produce a $100 billion company.Canopy stock has dropped over the past few weeks. But nothing about that long term growth narrative has changed. Consequently, investors should embrace recent weakness as an opportunity add on the dip.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Retirement Stocks That Won't Wilt in a Bear Market * 5 Consumer Stocks Ready to Push Higher * 3 of the Best ETFs to Buy for a Play on Gold Stocks Compare Brokers The post 3 Reasons Not to Sell Canopy Growth Stock appeared first on InvestorPlace.
On Monday, when the markets were falling off a cliff from fears of the tariff war with China, the headlines were about Aurora Cannabis (NYSE:ACB) tumbling ahead of earnings. But on Tuesday, the stock closed up 4.5% into the earnings event. This morning ACB is down 1.2% on the earnings headline, though it dipped lower earlier. Clearly it's an emotional stock, and investors have strong opinions on either side of the ledger.Overnight, ACB reported earnings and Wall Street did not like what they saw. This was the opposite reaction to Tilray's (NASDAQ:TLRY) earnings last night, which was up around 3.5% before falling back to a -3%.The sellers stepped into ACB because they missed on both the top and bottom lines. Earnings were three times worse than forecast but that's not the big problem as this is a growth stock and profits are not too big a concern for now. But they also missed on the revenue forecast. Luckily their sales were four time bigger than last year, they just failed to deliver what investors were expecting.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe bottom line is that traders wanted pizzazz and ACB did not deliver it this quarter. This doesn't change the long term bullish thesis for it. What Now for ACB Stock?While 2019 has been good for stocks as the S&P 500 is up 13%, the year has been great for cannabis stocks. ACB came into the earnings up 36% year to date, for example, and it's not even the star of the sector. Cronos (NASDAQ:CRON) and TLRY are up more than double that. Clearly there is froth, but in this case it's not a reason to avoid the stocks. The thesis to own them is not value.Fundamentally the metrics for cannabis stocks do not make sense. ACB sells at a 150 price-to-sales and carries a market capitalization of $8 billion for tiny sales sales. While this sounds like lunacy, this is a budding industry so we don't have yet the right metrics to properly judge the value. * 10 Retirement Stocks That Won't Wilt in a Bear Market For now, production and deliveries are important to the experts and Aurora kept their 25,000 kilos fourth quarter goal. Think of it as an asset that is in demand and that they can't source enough of it to satisfy the demand. And here the demand is insanely strong.I have rarely seen such excitement over a commodity like cannabis. It is a strong draw regardless of the format. There is tremendous interest in the products but also for the cannabis stocks too. The chat rooms are packed if they are discussing pot stocks. Yes, it's not all about the pot but it's the original draw.Since the cannabis companies stepped on the global platform, the experts started to speculate on applications for the stuff. We already knew about the edibles, but then the potables quickly grabbed the attention of the large corporations that sell sodas and booze. The chatter was that drinkable pot was going to disrupt the recreational beverage markets.The mainstream mega-caps quickly saw the threat, and they, too, are trying to turn it into an opportunity. For example Constellation Brands (NYSE:STZ) gave $4.5 billion to TLRY and Altria (NYSE:MO) invested similarly in ACB.These capital investment headlines are infectious among corporations and the retail investors. This reminds me of the bitcoin mania of 2017. Hopefully the cannabis sector has more runway than bitcoin. There are similarities, but cannabis has more buy-in from a much larger section of the population. Everyone knows what cannabis is but few can explain what's a crypto-coin.So fundamental metrics aside, you own this stock because you believe that the industry has tremendous growth ahead. The concept behind that is that cannabis companies will disrupt several industries, including the medical community, so the sky is the limit for now.That's why the traditional ways to measure valuation do not apply here. The best recent example of this is Netflix (NASDAQ:NFLX). Investors gave it a pass on valuation for the longest time because of the global growth potential. So as long as it had the opportunity to expand into a massive market they didn't care about how expensive NFLX was.Even though management said that they will be EBITDA positive soon, ACB stock here is in an industry that has the same profitability pass. The potential market for cannabis seems endless, so it's only logical to expect that early movers like Aurora Cannabis will be huge beneficiaries and that it's only a matter of time.So I don't judge and I simply plug my nose and own it. They do have tremendous regulatory headwinds but those will also eventually be a huge part of the incremental opportunities.Technically, there are a few levels to note for the short term. The $8 area has been pivotal for almost two years. These tend to be support on the way down so from here the bulls should have solid footing to target new highs. And in fact, this week's selloff was hard and tested the support and $8 held on the button.Conversely, if the bears eventually manage to break below $8 they could invite momentum sellers to retest $6.80 where they next major level of support lies. This is not a forecast but a scenario unfolding. There are other micro levels but if the thesis is to own ACB stock for the long term then it's futile to waste time dissecting the micro time frames.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. You can follow him as @racernic on Twitter and Stocktwits. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Retirement Stocks That Won't Wilt in a Bear Market * 5 Consumer Stocks Ready to Push Higher * 3 of the Best ETFs to Buy for a Play on Gold Stocks Compare Brokers The post For Aurora Stock, The Bullish Bet Is Still On appeared first on InvestorPlace.
The Canadian cannabis producer appears to be set to make its mark in the potentially lucrative U.S. hemp market.