15.87 +0.02 (0.13%)
After hours: 6:57PM EDT
|Bid||15.80 x 4000|
|Ask||15.91 x 3200|
|Day's Range||15.02 - 15.97|
|52 Week Range||5.61 - 25.10|
|Beta (3Y Monthly)||4.15|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Actor & comedian Tommy Chong weighs in on CBD outlook. This coming as Texas legalizes hemp production. Yahoo Finance's Zack Guzman & Sibile Marcellus, along with 'BigEyedWish' founder Ian Wishingrad join in on the conversation.
The House of Representatives is expected to pass a bill making it legal for marijuana companies to use banks in states where weed is legal. Former U.S. Securities and Exchange Commission Attorney Ron Geffner warns it may go up in smoke in the Senate. He talks to Yahoo Finance's Adam Shapiro, Julie Hyman, and Entrepreneur Magazine Editor Jason Feifer.
A good rule of thumb in the stock market is to not buy stocks just because they are cheap or low. Cheap stocks, or stocks that trade at discounted valuation multiples, are often cheap for a reason. The same is true for low-price stocks, or stocks that trade in the under-$10 and under-$20 ranges.As such, when dealing with super cheap stocks or super low-price stocks, investors should exercise caution. These stocks are at these levels for a reason, and it's not usually a good reason.Having said that, this group of beaten up stocks does offer significant upside potential. These stocks are priced for death. Thus, if anything good happens, these stocks will rise by a lot, and quickly. But you need something good to happen first, and something good only materializes for a handful of these sub-$10 and sub-$20 stocks.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Top-Rated Biotech Stocks to Invest In Today With that in mind, I've put together a list of high quality stocks in the under $20 bucket which are supported by healthy fundamentals, and have a realistic opportunity to rally in a big way from their current prices. Which stocks made the list? Let's take a deeper look. Luckin Cofffe (LK)Source: Shutterstock Stock Price: $18The first stock on this list is freshly public Luckin Coffee (NYSE:LK), the hyper-growth China retail coffee chain which many dub the Starbucks (NASDAQ:SBUX) of China.The core growth narrative here is very favorable. Luckin is the fastest growing and second largest retail coffee operator in China, and is on track to soon become the largest player in the space. At the same time, the China economy is rapidly urbanizing and expanding, and the coffee market in that economy is surging higher, rising by over 30% last year. That makes Luckin the hyper-growth leader in a rapidly expanding market, a combination which ultimately implies tremendous long-term growth potential.The numbers underlying LK stock are equally favorable. Luckin Coffee has a market cap of about $4 billion. Starbucks has a $100 billion market cap. To be sure, Luckin Coffee will never be as big as Starbucks. But, if the company does become a leader in what projects to be a $25 billion-plus China retail coffee market, then today's $4 billion market cap looks like a steal.Starbucks has about 40% market share in the U.S. Luckin can maybe do 20% share in China. A 20% share in a $25 billion market implies $5 billion revenue potential. On 10% operating margins and after a 20% tax rate, that equates to $400 million in net profits. A market average 16 multiple on that implies a potential future valuation target of over $6 billion. That's way bigger than $4 billion. Aurora Cannabis (ACB)Source: Aurora Cannabis Stock Price: $7.50In the under $10 category, one of the more attractive stocks to buy is undervalued Canadian cannabis producer Aurora (NYSE:ACB).No matter which way you slice it, Aurora is one of the more undervalued pot stocks in the market. It's cheaper than most peers on a trailing sales basis, forward sales basis, volume basis, and on pretty much every other important operating metric. That relative cheapness in ACB stock comes despite Aurora having many strengths. Aurora is the second largest player in the Canadian cannabis market behind Canopy Growth (NYSE:CGC), is one of the fastest growers in the market, is behind some of the top selling products across Canada and has one of the largest production capacities.Why, then, is ACB stock cheap relative to peers? Balance sheet. Cronos (NASDAQ:CRON) and Canopy are loaded up with billion dollar investments from consumer staples giants, which simultaneously shore up their balance sheets and give those companies ample firepower to grow rapidly. * The 7 Best Tech Stocks to Buy for the Second Half of 2019 Aurora has no such investment. But if the stock stays this cheap for long, it's only a matter of time before they get a big investment. Also, the company is tapping into the debt markets to raise sufficient capital to compete, meaning that in the big picture, this valuation disconnect has no reason to exist. If it gets wiped out -- as it should -- ACB stock could fly higher. Vipshop (VIPS)Source: Shutterstock Stock Price: $7.75Another hidden gem in the under $10 category is Chinese e-retailer Vipshop (NASDAQ:VIPS).Although China's economy is slowing, it is still growing at a robust mid single digit rate. At the same time, the digital economy remains red hot, with e-retail sales projected to rise 30% this year. Vipshop is at the heart of this robust e-retail sales growth narrative. Further, Vipshop is a discount retailer, and if the U.S. retail landscape has shown us anything, it is that off-price retail is a winning strategy. See the stocks of Ross Stores (NASDAQ:ROST), TJX (NYSE:TJX), Walmart (NYSE:WMT) and Five Below (NASDAQ:FIVE), versus the stocks of Nordstorm (NYSE:JWN) and Macy's (NYSE:M).Thus, Vipshop finds itself at the convergence of two favorable trends. On one end, you have robust growth through expansion of China's e-commerce landscape. On the other end, you have sustained popularity through an off-price retailing strategy.Net net, that means Vipshop projects as a sustained big grower for the foreseeable future. That sustained big growth should shoot VIPS stock materially higher from today's sub-$10 price. American Eagle Outfitters (AEO)Source: Mike Mozart via Flickr (Modified)Stock Price: $17A bunch of mall retailers trade in the under $20 range. But, only one retail stock is really worth buying at these levels and that stock is American Eagle Outfitters (NYSE:AEO).Put simply, American Eagle is a winning retailer. They are succeeding where others are not. American Eagle has transformed into the king of the denim category, and denim has made a strong comeback over the past several years. At the same time, American Eagle's Aerie brand has been one of the hottest stories in retail because the brand has aligned itself with body positivity tailwinds. Because of these favorable dynamics, American Eagle demand has remained resilient in the face of broader mall retail demand turbulence, which has allowed American Eagle to report far better than peer numbers over the past several quarters.The numbers speak for themselves here. American Eagle has rattled off 17 consecutive quarters of comparable sales growth, and 6 consecutive quarters of 5%plus comparable sales growth, including a 6% comp last quarter. In the overlapping period, peer mall retailers Nordstorm, J.C. Penney (NYSE:JCP), Gap (NYSE:GPS), Express (NYSE:EXPR) and many others pretty much all reported negative comps. The norm was also big gross margin compression. American Eagle's gross margins only fell back 30 basis points. * 5 Red-Hot IPO Stocks to Buy for the Long Run Broadly, American Eagle Outfitters is significantly outperforming its retail peers. This is nothing new. This has been the trend for a long time. It also projects to remain the trend for the foreseeable future. Consequently, if you're gonna buy a mall retail stock in the under $20 category, AEO should be your first choice. Ford (F)Source: Jens Mayer via Flickr (Modified)Stock Price: $10The last stock on this list is another stock in the sub-$10 category which has compelling upside in a medium to long term window.We all know Ford (NYSE:F), the U.S. automotive giant that makes great pick-up trucks and a variety of other good cars. Naturally, that sounds like a stable business, since auto demand is fairly stable, and Ford has been a relevant player in that space for what seems like forever. But the narrative supporting Ford stock has weakened over the past several years, mostly because the auto space is shrinking thanks to ride-sharing, and because Ford is losing share thanks to the emergence of electric vehicles.These headwinds are very real. But they are also overstated. Sure, some urban residents will chose to forego car ownership as a result of increased ride-sharing prevalence. But most won't, because no matter how good ride-sharing gets, it won't ever parallel the convenience of car ownership. Further, electric vehicles are ramping. But, Ford isn't just sitting on its hands while consumption pivots. They are pivoting into the EV space, too, and the company should be able to command respectable EV share at scale.Overall, then, the fears dominating the Ford narrative at present are overstated. Ultimately, they will pass, and when they do, Ford stock will rally from today's depressed levels.As of this writing, Luke Lango was long LK, ACB, CGC, TJX, WMT, FIVE, and JWN. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * The 7 Best Tech Stocks to Buy for the Second Half of 2019 * 7 Top-Rated Biotech Stocks to Invest In Today * 4 Semiconductor Stocks to Sell Compare Brokers The post 5 Stocks to Buy for $20 or Less appeared first on InvestorPlace.
Canopy Growth Corp (NYSE:CGC) closed down 2.29% on Thursday, with CGC stock at $41.86 -- nearly one dollar lower than its Monday open after spiking over $44 on Tuesday. What caused the latest slide in CGC stock price? Besides the usual cannabis industry volatility (more on that shortly), the world's largest cannabis company announced on Thursday that it will release its Q4 results on June 20. And that comes just two days after the company's CFO gave an interview where he said his company will continue to lose money "for the foreseeable future."Source: Canopy Growth Why the Latest Slide in CGC Stock Price?In its Q3 earnings, Canopy Growth reported a surprise net income of $74.8 million CAD, however the company also posted an operating loss of over $157 million. It turned that loss into a positive only because of a change in the fair value of assets and liabilities -- which added over $233 million to its bottom line for the quarter. Naturally, CGC stock got a nice boost based on those results. * 7 First-Half IPO Stocks That Will Falter in 2019's Second Half In Q4, the company is expected to once again show an operating loss, but it won't have a repeat of last quarter's accounting boost. On the contrary, Canopy Growth's CFO told Bloomberg that CGC will likely be generating negative income "for the foreseeable future." The question there is whether the operating loss is shrinking -- showing a move toward eventual profitability -- or growing.InvestorPlace - Stock Market News, Stock Advice & Trading TipsRevenue is also something investors are nervous about. The Canadian recreational cannabis market has not taken off as quickly as expected. Marijuana sales dropped early in the year as the legalization excitement wore off, and unsold inventory built up. And just last week, Canopy Growth's Tweed cannabis retail operation was forced to lay off 12% of staff in the province of Manitoba in what it described as "growing pains."The dip in CGC stock reflects uncertainty about what is going to be seen in those Q4 (and full-year fiscal 2019) financial reports. CGC Stock Also Reflects Volatility in the Cannabis IndustryInvestors in CGC stock may be happy to see this week come to a close, however other cannabis stocks have also had a bumpy ride. In particular, Cronos Group Inc (NASDAQ:CRON) dropped 4.33% on Thursday, while Aurora Cannabis Inc (NYSE:ACB) repeated its pattern of last week, starting off up and then losing ground through the week (it dropped another 2.26% on Thursday). While this week has been up and down for CGC stock price, it reflects a 12-month period that's been a veritable roller coaster ride: below $25 last August to nearly $57 by October, dropping to the $27 range in December, back over $50 in January, topping $52 in April, and now just under $42.The overall theme is that the cannabis industry is still a relatively new one with recreational marijuana in particular in the early stages of growth.That means cannabis companies are still dealing with large expenditures as they open new production facilities. Retail outlets and supporting supply chain operations are still ramping up in most markets, and actual consumer demand for the product can be tough to judge accurately. Regulations can vary wildly in the different markets cannabis companies operate in, adding a high level of complexity to their business.In addition, many recreational marijuana producers are still perfecting methods for growing, harvesting, packaging and distribution.And then there's the hype surrounding the cannabis industry. It's not just the prospect of legalization in another state or even at the federal level that get's investors excited and buying up Canopy Growth stock. Headlines about cannabis products like CBD and its potential health benefits can cause big spikes in cannabis stocks as investors stampede to get in early. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 All of these factors mean costs and revenue can vary significantly from quarter to quarter. And until the industry matures, CGC stock and other cannabis stocks are best for patient investors who are willing to wait and ride out the rocky weeks and wild swings.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post CGC Stock Continues Week of Losses for Pot Stocks appeared first on InvestorPlace.
Cannabis stock traded broadly lower Friday, putting the sector on track for a fourth-straight loss, as Hexo Corp. shares extended losses toward a 3-month low in the wake of disappointing quarterly results. The ETFMG Alternative Harvest ETF dropped 2.1%, as 31 of 38 components sold off, and the Horizons U.S. Marijuana Index ETF shed 3.2%. The ETFMG ETF has now lost 5.2% over the past four sessions. Among the sector's more-active components, shares of Hexo Corp. dropped 4.1%, after losing 8.8% on Thursday, to put them on track for the lowest close since March 12. Elsewhere, shares of Aurora Cannabis Inc. inched up 0.1%, after losing 4.7% over the past three days; Cronos Group Inc. dropped 5.7%; Aphria Inc. shed 2.0%; and Canopy Growth Corp. declined 2.0%. The ETFMG ETF has now shed 15% over the past three months while the S&P 500 has gained 2.7%.
[Editor's note: This story was previously published in March 2019. It has since been updated and republished.]Often, when analysts or bloggers talk up the potential of marijuana stocks, the focus is on the consumer side of the industry. But some of the best stocks in the pot sector may be medical marijuana stocks.Indeed, it's on the medical side where growth likely is to be largest in the near term. Canada did legalize recreational marijuana in October, but investors promptly sold the news in response. U.S. legalization is likely to be a long slog. Attitudes are mixed in Europe -- but even in legalized markets anywhere, black market (and untaxed) operators will be able to take share.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMeanwhile, approval of medical marijuana (in the U.S. and elsewhere) seems to be moving at a faster pace. In such a highly regulated market, black market and even smaller producers likely will be shut out. Quality and consistency will be key. Here, scale will matter. And those companies that win early have the best chance of becoming market leaders -- and providing big gains for investors. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 As always -- and particularly in this space -- investors need to mind the risks and size positions accordingly. But for investors who see medical marijuana stocks as the next big thing, these three are the best stocks to buy for investors enamored with weed.Source: Shutterstock Charlotte's Web (CWBHF)Charlotte's Web (OTCMKTS:CWBHF) has become one of the leading players in CBD oil (cannabidiol). And though Charlotte's Web products are made from hemp -- at least for now -- instead of marijuana, the stock still looks like one of the best plays in the sector.InvestorPlace's Matt McCall named CWBHF (the stock also trades on the Canadian Securities Exchange, ticker CWEB) as his pick for our list of the best stocks for 2019. And the case makes some sense. CBD oil sales are soaring, and Charlotte's Web is a market leader. As McCall pointed out, the federal farm bill in the U.S. provided a catalyst by legalizing hemp.With so many customers yet to try CBD oil -- and so many existing users attached -- market growth should be huge. And while CWBHF isn't cheap from a valuation standpoint, its position as a market leader should allow it to grow into its valuation.Source: Shutterstock Cronos (CRON)Of late, marijuana producer Cronos Group (NASDAQ:CRON) has made the headlines for its consumer business. Most recently, tobacco giant Altria (NYSE:MO) invested some $1.8 billion in the company. The combination of Altria's advertising and distribution reach and Cronos' production capabilities would seem to be the best fit for the consumer side of the business.But investors can't ignore that Cronos is a medical marijuana stock as well. In fact, it's that business that drives the majority of its revenue at the moment. And it also has given the company a beachhead in multiple markets around the world, from its home market of Canada to Germany, Israel and Poland. * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 I wrote after the Altria deal that investors should stay patient with CRON stock. And in this market, that might still be wise advice.Source: Shutterstock CannTrust (CTST)CannTrust (NYSE:CTST) has been one of the biggest victims of the post-legalization selloff. The stock lost more than half its value and touched a 52-week low in the process last year. And it's been in an almost continuous slump again since March.Unlike many peers, the company usually posts gross profits. And its established leadership in the Canadian medical marijuana industry should drive consistent growth and allow CannTrust to stay profitable. There is some retail exposure here as well, but unlike peers, CannTrust seems to have room to drive upside on the medical side alone.CannTrust also was able to get a listing on the New York Stock Exchange this year. Admittedly, uplisting hasn't helped pot stocks in and of itself (most notably Aurora Cannabis (NYSE:ACB) took a lot longer to take off than was expected), but it certainly didn't hurt.From a profitability standpoint, at least, CNNTF seems like one of the best stocks in the pot sector. And with valuation near the lows, at least some of the risks here likely are priced in.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Buy That Wall Street Expects to Soar for the Rest of 2019 * 7 Value Stocks That Are Flying Under the Radar * 6 Mouth-Watering Fast Food Stocks for Growth Investors Compare Brokers The post 3 Medical Marijuana Stocks to Buy appeared first on InvestorPlace.
Shares of Cronos Group Inc. (NASDAQ:CRON), the Canadian medical marijuana producer, have been on a roller coaster ride this year. In the first quarter, Cronos stock more than doubled, but as the quarter drew to a close, investors departed the name, sending the shares tumbling over the course of April and May.Source: Shutterstock This month, Cronos stock seems to have found round-number support at $14 and is rallying hard off that level. While the stock was pinched on June 11, to the tune of a 2.42% loss, it is still up 28% over just the past week.One of the obvious catalysts this month for Cronos stock was an upgrade by Bank of America analyst Christopher Carey coupled with an epic, upward price target revision by that analyst. Earlier this month, Carey lifted his rating on Cronos stock to "buy" from "underperform," the equivalent of a "double upgrade" because there is usually a rating in between "buy" and "underperform." Additionally, the analyst boosted his price target on Cronos stock to $20 from $13, implying a decent amount of upside from Tuesday's close of just under $17.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Cronos ControversyAs is the case with so many cannabis stocks, opinions differ on Cronos stock. While Cronos has its share of supporters, there are also skeptical voices. At least one analyst prefers Aphria (NYSE:APHA) to Cronos, though the former is about $1.3 billion smaller than the latter in terms of market value. * 7 Stocks to Buy for the Coming Recession Jefferies analyst Owen Bennett said Aphria's strengths in extraction, capacity and its international strategy are attractive qualities, while noting Cronos stock is richly valued relative to its cannabis equity peer group.Contributing to the debate on Cronos stock, Stifel analyst Andrew Carter recently initiated coverage of the name with a "tepid" hold rating. However, Carter notes a sector-wide pullback could enable financially sturdy marijuana companies, including Cronos, to possibly scoop up some rivals at discounted valuations.Cronos has $1.8 billion in cash, one of the more impressive cash hoards in the legalized marijuana industry and one that really stands out when considering the company's market capitalization is just over $3 billion. That $1.8 billion is the sum tobacco giant Altria Group (NYSE:MO) previously invested in Cronos, and Altria CEO Howard Willard has been open about his company making that investment in Cronos to help medicinal marijuana firm make the moves it needs to make to bolster market share. Bottom Line on Cronos Stock: Looking South of the BorderCronos is a Canadian company and while recreational marijuana is legal across that entire country, the real opportunity for the company may lie south of the border in the U.S., where the company is looking to enter the fast-growing cannabidiol (CBD) market.CBD is the most popular cannabis-based derivative.Currently, much of the enthusiasm for CBD revolves around hope and speculation. Supporters believe it can be elixir for various medical ailments and other uses, but there is not much in the way of empirical scientific evidence to support those claims. The good news for Cronos stock, assuming the company can effectively execute a foray into the U.S. market, is that the segment is expected to deliver exponential growth.A recent study by BDS Analytics and Arcview Market Research says the U.S. CBD market could swell to $20 billion by 2024."In fact, BDS Analytics is predicting an compound annual growth rate of 49 percent by 2024 across all distribution channels," reports Forbes. "Also, they expect that the CBD market, combined with THC products, will create a total market of $45 billion for cannabinoids by 2014." * 7 High-Quality Cheap Stocks to Buy With $10 Bolstering the long-term case for Cronos stock are the various distribution channels for CBD, many of which are mainstream. The ride will include some volatility -- that is just the name of the game with cannabis stocks -- but Cronos stock is a compelling long-term idea if management executes the CBD opportunity the right way.As of this writing, Todd Shriber did not own any of the aforementioned securities.Compare Brokers The post Cronos Stock Could Be Worth the Bumpy Ride appeared first on InvestorPlace.
Despite the market's hearty rally last week wasn't a good one for Aurora Cannabis (NYSE:ACB) because Aurora stock is stuck in a technical downtrend.Source: Shutterstock Even as a number of stocks in the cannabis industry were bouncing higher as well, the recent underperformance vs. the overall market has investors wondering if Aurora is set to breakout or breakdown.Late last week, Stifel analysts initiated Aurora Cannabis stock with less-than-enthusiastic coverage. They slapped a hold rating and a C$10 price target on ACB ($7.47 USD). From current levels, that implies a slight downside but not much. At the very least, some investors may read that as a positive note. After all, it could have been a sell rating with a target that implied a big downside.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Dark Horse Stocks Winning the Race in 2019 Still, it doesn't paint the most optimistic picture. The analysts argue that Aurora's "international medical-use growth opportunities are limited outside of Canada and Germany." They remain cautious as ACB due to execution concerns and the company's "lack of definitive strategy."So what do the charts say? Trading ACB Stock Click to EnlargeShares of Aurora stock are stuck in a tough downtrend (blue lines), with channel resistance squeezing it lower. Last month the 20-day and 50-day moving averages began acting as resistance, while Aurora is flirting with losing its 200-day moving average as well.Once ACB stock lost the $8.25 to $8.50 area last month, more selling pressure took hold. This area was resistance from October through March, but after turning to support it looked as if it would buoy the name going forward. Keep in mind, Aurora had just about doubled from the start of the year through mid-March.So what now?I'm watching a few key areas in the short term, starting with the 200-day. If this area turns from Q1 support to Q2 resistance, there will most likely be more downside to Aurora Cannabis stock. If ACB can reclaim this level, it will set up an important test with resistance. The only problem? Resistance sits between $8.10 and $8.60 and is trending lower. That's where investors will find the 20-day and 50-day moving averages, as well as channel resistance.Below the 200-day, and the 61.8% retracement at $7.29 will be an almost immediate focus. If it fails as to boost Aurora Cannabis, channel support will soon be called upon near $7.So is a breakout or breakdown coming for ACB stock? Until we first see how it handles some of these key levels, we won't have our answer, unfortunately. However, breaking out of this channel can trigger a big move in either direction. For that reason, these are must-watch zones for Aurora stock investors. Until they give way, ACB can remain channel bound. Bottom Line on Aurora StockI consider the cannabis space industry very interesting. On the one hand, it's moving impressively fast with regulation, public acceptance and corporate revenue. That's not to say there won't be bumps in the road, only that it's moving very quickly in the right direction. That said, despite this explosive growth, it's very much a long-term play. That's because the valuations are pretty large already.Take Aurora Cannabis for instance.ACB stock commands a market cap of almost $8 billion, while full-year estimates for fiscal 2019 revenue stand just under $200 million. That leaves Aurora trading at 40 times this year's revenue. Although on the more bullish side, estimates also call for $500 million in sales next year. That's a more palatable 16 times current sales but would also assume that the stock price stays flat over the next 12 months.So in a way, Stifel's coverage makes sense. The stock has upside provided a few things continue to play out. More states and countries need to continue down the regulatory approval path, while Aurora stock needs to execute on its opportunities. Lastly, it needs to show a path to profitability, while continuing its stunning revenue growth over the next few years.That really goes for more companies besides Aurora stock too. Almost all cannabis plays need to. That includes Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aphria (NYSE:APHA), Cronos Group (NYSE:CRON), New Age Beverages (NASDAQ:NBEV) and others. Let's see if they can deliver.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Dark Horse Stocks Winning the Race in 2019 * 6 Chinese Stocks to Sell That Are Suffering From a Digital Ad Slowdown * 4 Technology Stocks Blasting Higher Compare Brokers The post Here's What Needs to Happen for Aurora Stock to Break Out appeared first on InvestorPlace.
Though the bulk of cannabis stock-mania to date has focused on Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY), Aurora Cannabis (NYSE:ACB) and Cronos Group (NASDAQ:CRON),arguably the most compelling pick in the bunch, Hexo (NYSEAMERICAN:HEXO), has been habitually overlooked.That's changing though, and for good reason. As marijuana-stock mania continues to mature and investors are willing and able to start judging these companies on their individual merits, they're finding HEXO is about as well-positioned for growth as any other name in the business. Although the Hexo stock price feels frothy now, this quiet name may be one of the better options for newcomers looking for exposure to marijuana stocks. * 7 Stocks to Buy As They Hit 52-Week Lows Bank of America's Christopher Carey agrees.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What Makes HEXO Different?At first glance, it's easy to assume all marijuana stocks are the same.Take a closer look, though, and it becomes clear they're not. Aurora, for instance, has made it clear it's first and foremost hoping to make a meaningful shift into the medicinal market, and is steering clear of beverages. Canopy Growth has mastered its appeal to recreational users. Each name in the business, in fact, is now cultivating one or more niche.So what makes HEXO different? A couple of things.One of them, oddly enough, is geography.Though recreational cannabis is now legal everywhere in Canada, one of the proverbial epicenters of the movement has been Quebec, where HEXO sells roughly one-third of all cannabis bought. Its long-term supply contract should keep it positioned as the market leader there for the foreseeable future.The overarching difference between HEXO and its peers, however, is its plans to penetrate the still-budding edibles and beverage market, in the U.S. and Canada, along with its giant partner and its history of innovation.It's a tricky and unproven arena, one of the reasons Aurora Cannabis has no current plans to produce a beverage line. But HEXO will have plenty of competition in that market. Constellation Brands (NYSE:STZ) and Canopy Growth are teaming up on beverages, and New Age Beverages (NASDAQ:NBEV) has already launched a cannabis-infused line, using the brand name Marley (as in Bob Marley).HEXO has something of an ace up its sleeve on this front, though. It's already working with alcohol giant Molson Coors Brewing (NYSE:TAP) to bring beverages to the Canadian market, a market that may be worth on the order of $3 billion, before the end of the year.Though Constellation and Canopy will provide formidable competition, Molson thinks HEXO was the better partner. It would know, too. It held discussions with Aurora Cannabis and Aphria (NYSE:APHA) along with two other unnamed outfits, but Frederic Landtmeters, the CEO of Molson Coors Canada, ultimately concluded it was Hexo's "track record of innovation" that would make it the highest-potential partner.Then there's the detail investors have likely overlooked; Hexo is arguably better prepared to get a foothold in the growing U.S. market than most cannabis companies.Hexo USA was only officially launched a couple of weeks ago, but its CEO, Sebastien St. Louis, has already been in the United States for a while, speaking with investors, laying the groundwork for the company's future in the country.What that future has in store remains unclear, particularly given the fact that recreational cannabis and even medical marijuana remain illegal in much of the United States. But Oppenheimer analyst Rupesh Parikh noted in February, when he first started covering Hexo stock, that he expects HEXO to develop partnerships in non-beverage categories like cosmetics, edibles and vapes. That's important simply because, in the United States and Canada, consumers who are interested in trying cannabis for the first time are more likely to do so by eating or drinking it rather than smoking it.Others are already in the space, to be clear, but no cannabis company has yet entered into an edibles-oriented partnership from a major name. HEXO may be quietly mulling the industry's first such deal, if Parikh's instinct is on target. Looking Ahead for Hexo StockBank of America's Christopher Carey noted in April, "HEXO is our Top Pick in cannabis, screening compelling in our valuation framework vs peers (EV/sales and DCF), and with fundamentals grounded by the most de-risked cannabis supply in Canada (off-take with Quebec), an innovation-forward organization and potential for additional value-add partnerships (beyond that already developed with Molson Canada)."HEXO alluded to such value-added partnerships when Hexo USA was launched, bolstering comments already offered by Oppenheimer. And Molson has already noted how innovative the company has been.The assessments remain largely the same from one impartial observer to the next.Hexo stock may not be the absolute top pick in the cannabis space, as Carey suggests, but there's no denying HEXO is a marijuana stock that's been erroneously ignored.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Hexo Stock May Be the Cannabis Industry's Best-Kept Secret appeared first on InvestorPlace.
When it comes to the Canadian cannabis world, there are four big pot stocks that tend to hog the spotlight. That Big 4 includes Canopy Growth (NYSE:CGC), Aurora (NYSE:ACB), Tilray (NASDAQ:TLRY) and Cronos (NASDAQ:CRON). But those aren't the only four pot stocks playing in the Canadian cannabis market. Indeed, there are a handful of other pot stocks which, for various reasons, aren't followed as closely by Wall Street.Source: Shutterstock One such under-the-radar pot stock is Aphria (NYSE:APHA). For all intents and purposes, Aphria is just like Canopy, Aurora, Tilray and Cronos. The company is a Canadian cannabis producer which sells thousands of kilograms of cannabis into the legal Canadian market every quarter, and is looking to expand its reach into other countries, including the U.S. But, relative to the Big 4, APHA stock has a tiny market cap and is much, much cheaper on a fundamental basis.Does that mean APHA stock is the best pot stock to buy?InvestorPlace - Stock Market News, Stock Advice & Trading TipsNo. Far from it. Instead, Aphria stock is understandably smaller and cheaper than its peers. This company has a relatively small cannabis business. That cannabis business has reported tumultuous and shaky results over the past several months. The optics and news flow surrounding the company have been confusing, at best, and very worrisome, at worst. There's no big money investment. Nor is the balance sheet all that loaded up.In other words, there really isn't anything special about Aphria. Instead, there are few things which warrant concern.As a result, while APHA stock is cheaper than its peers, it is cheaper for a reason -- and that means investors are probably best served to wait on the sidelines until more clarity and stability are injected into this company's narrative and fundamentals. Cheapness Explained By Red FlagsOn its face, Aphria stock is considerably cheaper than any of the Big 4 pot stocks. * 7 Stocks to Buy As They Hit 52-Week Lows Canopy is the biggest player in this market, selling over 10,000 kilograms of cannabis last quarter. Aurora slots in at number two, with just under 10,000 kilograms of cannabis sold last quarter. Meanwhile, Tilray sold about 3,000 kilograms of cannabis. Aphria sold around 2,600 kilograms of cannabis. And Cronos is the smallest in this group, with just over 1,000 kilograms of cannabis sold last quarter.Given how much bigger they are, Canopy and Aurora reasonably have much larger market caps than Aphria. But, despite Aphria having a similarly sized cannabis business as Tilray and Cronos, APHA stock has a significantly lower market cap. TLRY stock has a $3.5 billion market cap. CRON stock is up above $5 billion. APHA stock is down near $1.5 billion.Indeed, on a market cap per kilogram of cannabis sold last quarter basis, Aphria stock is much cheaper than its peers. The median valuation across the Big 4? Roughly $1.3 million in market cap per kilogram of cannabis sold last quarter. Aphria stock's market cap per kilogram of cannabis sold last quarter? Below $650,000.But, this cheapness in APHA stock is easily explained by the company's tumultuous fundamentals and narrative.First, and foremost, Aphria's cannabis business actually declined in terms of both quarter-over-quarter revenue and volume last quarter, due to supply shortages. Second, there have been some notable C-suite departures which have created confusing turnover at the head of the company. Third, there was a hostile takeover offer that didn't pan out… and was very odd from the onset. Fourth, this company hasn't attracted any big-money interest or offers, despite its cheap valuation.Net net, there are reasons why APHA stock is cheaper than its peers, and those reasons should keep investors sidelined for the time being. No Need to Buy Aphria Stock YetMaybe the current cheapness in Aphria stock isn't warranted in the long run. Maybe the cannabis business will stabilize, all the external noise will pass, and the stock will roar higher.All this could happen. But, if it does happen, it will take several months to play out -- meaning there's no reason to buy in just yet while the story is still troubled.The first thing that needs to happen here is the cannabis business needs to stabilize. Next quarter's numbers need to represent growth from this quarter's numbers. Until that happens, investors likely won't buy in.The second thing that needs to happen is all the optical noise needs to pass. The C-suite needs to see some stabilization. Attacks against the company's credentials need to stop. The hangover from the hostile takeover bid needs to pass. * 10 Stocks to Buy That Could Be Takeover Targets If all that happens, then APHA stock will rally in a big way from here. But, until then, this stock will remain understandably cheaper than peers. Bottom Line on APHA StockPot stocks are inherently volatile, and APHA stock is volatile even for a pot stock. This volatility in the stock is the result of volatility in the company's fundamentals and narrative. So long as this fundamental and narrative volatility persists, investors will remain hesitant to buy into APHA.As of this writing, Luke Lango was long CGC and ACB. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Buy As They Hit 52-Week Lows * 4 Antitrust Tech Stocks to Keep an Eye On * 5 Gold and Silver Stocks Touching Intraday Highs Compare Brokers The post Aphria Is an Understandably Cheap Pot Stock appeared first on InvestorPlace.
Bank of America sees 39% upside in this marijuana stock, but a lot would need to go right for that to happen.
Jefferies analyst Owen Bennett likes Aphria and the Green Organic Dutchman, but is less impressed by Cronos Group. Where the marijuana market is going, and how to play it.
Investors who follow marijuana stocks noted two Canadian companies whose tickers were moving in opposite directions Wednesday. Cronos Group (NASDAQ:CRON) notched an impressive 10.9% gain, while Aurora Cannabis (NYSE:ACB) was down 1.8% on the day. Cronos investors celebrated, but if you have ACB stock in your portfolio, there's no need for panic.Source: Shutterstock Cronos stock got a big boost from bullish analyst reaction to the company's announcement it would be pursuing an aggressive launch of CBD products in the U.S. market. For Aurora stock, Wednesday's drop was a continuation of six months of volatility that still has the company up some 47% in 2019.That being said, yesterday's close of $7.53 is a long way off from last fall, when ACB stock nearly hit $11.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's the Deal With Cannabis Companies, and Why Are So Many Canadian?Canada became only the second country (and the first member of the G7) to legalize recreational marijuana use when Bill C-45 passed in June 2018. The legal status in Canada is a key reason why so many of the top cannabis companies are based in that country -- and Aurora stock is one of those Canadian top performers. While medical marijuana is a relatively mature product, recreational cannabis is a new market and that means there are bound to be some ups and downs. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% However, with the current trend toward legalized recreational pot (and related products like the CBD that has CRON investors excited), many analysts think the future is bright for these Canadian cannabis producers. What Does the Future Look Like for ACB Stock?The trajectory of Aurora Cannabis stock closely follows that of the cannabis industry in general. Worth pennies in 2014 when the company first obtained a license to grow and sell medical marijuana, it has steadily increased in value with the march to legalize recreational pot use. ACB stock hit all-time highs (no pun intended) last October as investors rushed to get onboard in the months after Canada legalized recreational marijuana, with anticipation that multiple states were on the verge of doing the same as a part of midterm election ballots. In December, three states did just that (Michigan, Utah and Missouri), bringing the number of states that allow recreational marijuana use to 10. There are even hopes that the U.S. might legalize pot at the federal level. If that were to happen, Canadian cannabis producers would have a head start, with industrial-scale marijuana growing facilities already in production.Aurora stock has experienced some volatility in recent months due to a variety of factors. Its Q3 earnings report delivered a loss that was 724% higher year-over-year, while the Canadian recreational cannabis market has significantly missed expectations so far for 2019. However, despite the current setbacks, in Canada -- which include the challenge of ramping up production, supply chain challenges, delays in retail store openings, and the continued availability of cheaper "black market" pot -- the future looks bright for recreational marijuana. In addition, momentum is building in U.S. states, legalization is likely to happen in Mexico this year and countries on all continents are considering decriminalization of marijuana.Aurora Cannabis has been making the investments needed to be a major producer in both the medical and recreational marijuana industries, in Canada and abroad. With the demand for cannabis accelerating and in the early stages of its expected growth curve, the latest ACB stock drop should not be cause for concern.As of this writing, Brad Moon did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post Aurora Stock Slips, But Volatility Doesn't Mean 2019 Growth Is Over appeared first on InvestorPlace.
Cannabis stocks were mostly lower Thursday, resuming the selloff seen earlier in the week, as investors shrugged off a buy recommendation on market leader Canopy Growth Corp., and news that Delaware is closer to adult-use legalization.
After following the cannabis industry for a couple years, Stifel analyst Andrew Carter launched formal coverage this week of Canada’s large-cap producers. He thinks that Aurora, Tilray, and Cronos Group only merit Hold ratings.
After receiving the backing of Altria Group Inc (NYSE:MO), Canada-based cannabis producer Cronos Group (NASDAQ:CRON) looked like it was headed for significant growth, but it has not delivered. As a result, the performance of CRON stock has been disappointingSince the deal, CRON has not made meaningful strides in production, which is the name of the game in cannabis, nor has the company expanded notably overseas. Without even factoring in the valuation of CRON stock, I have serious concerns about the company.CRON just does not have strong enough fundamentals to propel Cronos stock meaningfully higher. The company continues to lag its competitors in production, R&D, and new markets.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Buy That Could Be Takeover Targets Capacity WoesCronos' production capacity is comparable to the likes of Organigram and CannTrust Holdings (NYSE:CTST), but the market gives CRON stock a substantially larger valuation.However, it is not clear why that gap is justified, since CRON is a less efficient grower and seller than its two competitors.Cronos, Organigram, and CannTrust Holdings all have similar capacity now and similar estimated capacity next year. Looking at recent results, though, Cronos clearly grows cannabis less efficiently and sells it less effectively. Cronos sold just 1,111 kg of cannabis last year, while Organigram sold 4,248 kg and CannTrust sold over 3,000 kg.Cronos is falling behind tremendously. CRON Doesn't Have an Edge OverseasCRON's international push does not seem to be materially different or more successful than that of its peers. Most of its overseas partnerships are in very competitive areas. Other players have been expanding much more aggressively, and CRON has less ground cultivated overseas than the competition, which will be a hindrance to its growth and to CRON stock.In Australia, for example, Cronos is aiming for annual production capacity of 2,000 kg. But that is peanuts compared to what Solaris Nutraceuticals Pty Ltd is doing. Its greenhouse will produce around 100,000 kg per year of medical cannabis.In Latin America, CRON has a 50/50 joint venture with AGI, Colombia's leading agricultural services provider. However, there has been a big increase in the number of cultivators in the region. Again, just as an example. AGI's 207 acres of available land pales in comparison to competitors like Colombia's Pharmacielo, which has over 15 million square feet of land. That translates roughly to production capacity of over 5,000 kilograms.There's also Khiron, a Colombian grower that has been expanding its own cultivation area. Its total area is estimated to be capable of producing 100,000 kilograms of dry flower for extraction and processing into medical cannabis.You get the idea.Europe is even more crowded. Germany and Poland, where many American-listed Canadian companies have been active in M&A and expanding their footprints, are particularly competitive. The Bottom Line on CRON StockThe cannabis industry is a very attractive space to be in, but there are bound to be some duds. At the moment, Cronos Group stock is shaping up to be a good name to short. One caveat is that Cronos does has a decent cash balance.Overall, investors can always generate profits by reducing exposure to the laggards and doubling down on the leaders. Investors should be reducing their exposure to CRON stock.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) * The 4 FANG Stocks Won't Be Bitten By Regulation Threats * 10 Stocks to Buy That Could Be Takeover Targets * 4 Big Bank Stocks Rebounding Compare Brokers The post Cronos Stock Is Lagging Other Marijuana Names appeared first on InvestorPlace.
The South African market is one to watch in the global cannabis landscape. Need more cannabis news? This store will be the first of a number of premium cannabis stores that we intend to open in high-end retail locations across South Africa," Katz said in a statement.