CRON - Cronos Group Inc.
| Previous Close | 15.60 |
| Open | 15.66 |
| Bid | 16.15 x 800 |
| Ask | 16.17 x 800 |
| Day's Range | 15.40 - 16.55 |
| 52 Week Range | 5.61 - 25.10 |
| Volume | 4,809,247 |
| Avg. Volume | 7,946,287 |
| Market Cap | 5.431B |
| Beta (3Y Monthly) | 4.03 |
| PE Ratio (TTM) | N/A |
| EPS (TTM) | -0.03 |
| Earnings Date | N/A |
| Forward Dividend & Yield | N/A (N/A) |
| Ex-Dividend Date | N/A |
| 1y Target Est | N/A |
- CNBC Videos•19 hours ago
Cramer goes off the charts to get a deeper look at cannabis stocks
Jim Cramer takes a look at his colleague and technician Tim Collins' interpretation of the cannabis sector.
Yahoo Finance Video•5 days agoWhy the son of the late Notorious B.I.G says cannabis-related products can be used as tools for wellness
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.
- Market Realist•3 hours ago
How Cronos Group and Aurora’s Valuations Compare with Peers
How Do Cannabis Stocks' Valuations Stack Up in May?(Continued from Prior Part)Cronos GroupCronos Group (CRON) saw a big spike in its forward EV-to-EBITDA valuation multiple compared to its historical average as shown in the chart below. The company
- CNBC•18 hours ago
Cramer Remix: The cannabis stocks I'm eyeing
Jim Cramer turns to the charts to reveal that cannabis companies like GW Pharmaceuticals and Village Farms could be good additions to your portfolio.
- InvestorPlace•23 hours ago
Cronos Stock Is Less Attractive Than Many Other Marijuana Names
Cronos Group (NASDAQ:CRON) has established its own trend. Thanks to the $1.8 billion investment that CRON received from Altria (NYSE:MO) in December, Cronos is one of the few pot stocks whose 52-week high didn't come right before marijuana became legal in Canada in October.After that announcement, CRON stock began a bull move that peaked in March. Unfortunately, CRON stock has fallen since that time. Since there's no apparent upcoming catalyst that can break that downtrend, traders don't have an incentive to take a chance on Cronos Group stock. CRON Stock Can't Become a Market LeaderSince reaching a near-term peak of $24.37 per share on Mar. 6, CRON stock has steadily slid. Now many wonder when the decline will end.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for Over 20% Upside Potential Many people were bullish on CRON stock after U.S. tobacco giant Altria acquired a stake in the company. Because the cannabis and marijuana industries have certain similarities. I think this alliance will give Cronos some added expertise in the areas of production, distribution, and marketing. It also reminded many of Constellation Brands' (NYSE:STZ) investment in Canopy Growth (NYSE:CGC) that made CGC a market leader.However, for all of the talk about CRON stock, analysts only expect CRON to produce about 130,000 kg of pot this year. That trails smaller firms such as Aphria (NYSE:APHA) and The Green Organic Dutchman (OTCMKTS:TGODF). Valuation, Charts Show Little Reason to Buy Cronos StockMarijuana stocks remain highly speculative. For traders to take a chance on a marijuana stock, they need some reason to believe that they can sell it at a higher price later. Because CRON lags some smaller firms in production, it has little chance of leading the industry. Today Aurora Cannabis (NYSE:ACB) and Canopy Growth have emerged as industry leaders.The multiple of CRON stock also doesn't give investors a reason to buy the shares. Cronos stock currently trades at around 355 times CRON's sales. While that might appear elevated, it compares well to other cannabis equities in today's market.CRON does deserve credit for earning a profit. Cronos Group reported a first-quarter GAAP profit of 48 Canadian cents (36 cents) per share. CRON predicts that its 2019 EPS will come in at 52 Canadian cents (39 cents). That would gives CRON a price-earnings ratio of about 35.6. However, due to an expected decline in CRON's EPS to 7 Canadian cents (5.2 cents) in 2020, its forward PE comes in at 290.That valuation leaves investors with little incentive to buy Cronos stock. I have made successful short-term trades in the past in both Aphria and CannTrust Holdings (NYSE:CTST), due to their relatively low multiples. It is possible to find stocks with attractive valuations in the cannabis space. Unfortunately, that does not apply to CRON stock at this time.Finally, the recent price movements of Cronos Group stock also won't help traders much. From a technical perspective, InvestorPlace columnist Bret Kenwell thinks that Cronos stock has support in the $13-$14 per share range. However, if CRON falls below that level, it could return to the single digits. Over the last year, it has appeared to build a floor in the $6 per share range. Cronos stock would be attractive at that level. Still, it will probably not reach that price anytime soon. Final Thoughts on CRONThere's nothing attractive about Cronos Group stock for investors or speculators. I can see a lot to like about Cronos Group's business. Its alliance with Altria should help it with production, distribution, and marketing. Also, the fact that it earns a GAAP profit will place CRON in a strong position compared to many of its peers.Unfortunately, none of those advantages make Cronos Group stock attractive. Cronos' production levels lag those of market leaders such as Aurora and Canopy. The valuations of those names are also more favorable than that of CRON stock, closing off any chance that CRON could be seen as a relative bargain. Moreover, while Cronos stock could bounce off of key resistance points, the stock's floor is well below its current levels.I have stated on many occasions that marijuana equities like CRON stock will eventually become low-multiple, dividend-paying equities like the Altria of today. Until CRON develops those characteristics, or at least finds a more solid floor, I would look to own other equities in the cannabis space.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 for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Cronos Stock Is Less Attractive Than Many Other Marijuana Names appeared first on InvestorPlace.
- InvestorPlace•yesterday
Canopy Growth Stock Has to Overcome an Important Obstacle
At least in the current, early stages of the legal marijuana sector, Canopy Growth (NYSE:CGC) is the clear leader. Canopy Growth stock has by far the highest market capitalization among marijuana stocks, and Canopy has the largest peak production capabilities.As a result, the CGC stock price is somewhat of a weather vane for investor sentiment towards the cannabis sector more broadly.That's good news, and bad news, for CGC stock. On the plus side, CGC is simple. The company's reach is broad and continues to grow. However the industry's growth plays out, Canopy Growth is going to play a significant role in it and generate significant profits. If the marijuana sector exceeds investors' expectations, the CGC stock price likely will do the same.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe flip side is that it's unlikely that Canopy Growth stock will be the best marijuana stock over time. Smaller niche plays might have more room for growth and are more likely to become M&A targets. Canopy's wide reach guarantees at least a few wins, but some of its myriad initiatives will fail to bear fruit (or, more accurately in this case, flowers). * 7 Stocks to Buy for Over 20% Upside Potential Overall, the outlook of CGC stock is pretty simple. If an investor believes in cannabis, CGC stock remains the simplest play, as I've argued in the past. But with the CGC stock price still not too far from its highs, it's worth remembering that an awful lot of belief, and potential success, looks priced into Canopy Growth stock. Canopy Growth Expands Its ReachThe $4 billion-plus investment Canopy Growth received from Constellation Brands (NYSE:STZ,NYSE:STZ.B) gave the company an unparalleled war chest. Only Cronos Group (NASDAQ:CRON), which received $1.8 billion from tobacco giant Altria (NYSE:MO), comes close.Canopy is putting that cash to work. It negotiated a complicated deal with Acreage Holdings (OTCMKTS:ACRGF) to enter the U.S. market, including a $300 million upfront payment. (An activist Acreage shareholder could scuttle that purchase, however.) CGC is adding production capability. Canopy brought a German cannabinoid compounder into the fold earlier this month. Its smaller deals include a buyout of a U.S. hemp manufacturer and a stake in a '"cannabis beauty brand."Those acquisitions add to the company's already-strong portfolio. Canopy Growth sells marijuana under six different brands. Its existing production capabilities appear to exceed 500,000 kilograms annually. Canopy produces oil and softgels in addition to dried flower. The Constellation partnership should give the company an edge in cannabis-infused beverages and edibles.Canopy already has a reach that far exceeds that of any other cannabis company. Aurora Cannabis (NYSE:ACB) is probably its closest rival in terms of breadth of geographic and market exposure. But even Aurora doesn't reach Canopy's levels, and ACB doesn't have an extra few billion dollars on its balance sheet that it can use to take advantage of more opportunities along the way. CGC or an ETF?At this point in the market's evolution, one key argument for Canopy Growth stock is that it can function like an ETF. The point of an ETF is to capitalize on a trend without making the effort or taking the risk that investing in single stocks requires. There are, by one count, over 400 marijuana stocks at the moment. As is usually the case with a "hot" trend, many of those stocks will decline or go bust. (Think, for instance, of the dot-com bubble, or more recently, cryptocurrency/blockchain plays.)In fact, I'd rather own CGC stock than the largest marijuana ETF, the ETFMG Alternative Harvest ETF (NYSEARCA:MJ). Two marijuana pharmaceutical plays, GW Pharmaceuticals (NASDAQ:GWPH) and Corbus Pharmaceuticals (NASDAQ:CRBP), together make up more than 12% of Canopy's assets. And, again, Canopy's reach means it should have at least some success, no matter how the marijuana industry develops.If oversupply makes production less profitable, CGC's distribution and retail operations should benefit. If consumption moves towards edibles and away from flowers, it should be well-positioned for that shift. That's not the case for many smaller plays, including those that make up the MJ ETF. The Risks Facing CGC StockThere's one obvious catch for Canopy Growth stock, however. Even if Canopy can capture marijuana growth in myriad ways, that growth needs to support the current CGC stock price. And I've become increasingly cautious about that recently.At its December lows, CGC was available for less than the price that Constellation paid. (Constellation handed over roughly $35 per share, depending on how warrants Constellation received as part of the deal are valued). But now that CGC stock price has reached the mid-40s, that's no longer the case. As the Acreage activist noted, CGC trades at a stunning 178 times its estimated 2020 EBITDA.That multiple isn't out of line for the sector, but that's precisely the point. Current valuations in the industry, including that of Canopy Growth stock, suggest that massive industry growth is all but a foregone conclusion. And I'm skeptical about whether it will play out quite that way.For instance, recreational sales in Canada already are starting to flatten out., so the explosive rallies of marijuana stocks are going to end. Marijuana prices have plunged in the few regulated U.S. markets. And legalization, given the size of the existing black market (and the relative ease of using it for most consumers), won't necessarily lead to higher sales.Those trends suggest that the initial optimism toward marijuana, and the enormous valuations assigned to marijuana stocks, may have gone a bit too far. That, in turn ,suggests that the CGC stock price may have done the same. For marijuana bulls, there's no simpler play than CGC stock. But for CGC stock to rise further, those bulls must be right.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 for Over 20% Upside Potential * 5 Large-Cap Stocks Holding Steady Amid Trade War Concerns * 7 ETFs for Healthy Healthcare REITs Compare Brokers The post Canopy Growth Stock Has to Overcome an Important Obstacle appeared first on InvestorPlace.
- InvestorPlace•yesterday
Even at These Prices, Tilray Stock Still Has Too Much Success Priced In
Shares of Tilray (NASDAQ:TLRY) dropped in mid-May after the Canadian cannabis company reported first quarter numbers that didn't quite live up to expectations. Revenues topped estimates, but profits missed estimates. Despite the profit miss, all the growth trends moved in the right direction. Revenues rose big sequentially. So did cannabis sales volumes. Gross margins improved, too. Broadly, the numbers looked good, but Tilray stock still had people disappointed.Source: Shutterstock The big story for the past year is that Tilray has simply been priced for much more than just good. For context, TLRY has always been richly valued relative to peers for no reason outside of market hype. This is the pot stock that went extra parabolic during the mid-2018 cannabis craze. At one point in time, Tilray touched $300. It has since consistently retreated. Now, shares trade hands under $50. * 7 High-Yield REITs to Buy (Even When the Market Tanks) Naturally, the question following earnings is whether or not TLRY stock has finally bottomed. Ostensibly, the answer appears to be yes. The numbers missed expectations, but were pretty good. The stock dropped. But, not by much. The valuation now makes sense relative to peers.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIn other words, the numbers, the price action, and the valuation all imply that Tilray stock could indeed bottom here just below $50.But, will it? I'm not sure. As such, I think this is a wait-and-see situation. TLRY has been a falling knife for some time. Reversing the course of this falling knife will take some time, too. There's no rush to buy in just yet. Tilray's Numbers Were Pretty GoodDespite the headline profit miss, Tilray's first quarter numbers were actually pretty good, and broadly much better than most observers anticipated.Both revenues and kilograms of cannabis sold rose nearly 50% quarter-over-quarter. Relative to peers Cronos (NASDAQ:CRON) and Aurora (NYSE:ACB) (both of which have reported early 2019 numbers) that near 50% sequential revenue and volume growth rate is very impressive. The growth rates at Cronos were below 20%. Over at Aurora, they were between ~20% and ~40%.To be sure, Tilray is growing from a small base, but the takeaway nonetheless remains clear. Tilray gained share in the cannabis market in early 2019. On top of that market share expansion, gross margins also improved sequentially, so Tilray importantly gained share without sacrificing margins.Overall, then, Tilray's first quarter numbers actually underscore that this company is making material progress in the potentially enormous cannabis space. From that perspective, these numbers could help Tilray bottom here. Tilray Stock Could Bottom Here, but Will It?I've shied away from Tilray stock over the past several months for one reason: valuation. Quite simply, after this stock popped all the way to $300 on hype alone, it needed to do a lot of compressing before it became even somewhat reasonably valued. On top of that, Tilray reported number in late 2018 which implied that it was growing more slowly than peers, only adding to the stock's valuation concerns.But, as stated earlier, Tilray is now growing more quickly than many of its peers. Further, the valuation is now more reasonable, as each kilogram of cannabis produced at Tilray last quarter is being valued at roughly $1.5 million, which is in-line with the valuation for Canopy (NYSE:CGC).As such, there's reason to believe that TLRY stock could bottom here. The numbers are reversing course, and the stock is finally trading at arguably reasonable valuation levels.But, while there's reason to a believe a bottom is in, I'm not convinced. CGC and TLRY now feature similar valuations. But, Canopy has a $4 billion investment on its balance sheet from Constellation Brands (NYSE:STZ). Tilray has no such investment. They have a few partnerships, but no big money investment.Thus, one should ask: does TLRY deserve a CGC-like valuation? I don't think so. But, let's see what the market says. Bottom Line on Tilray StockIt has been a long fall from $300 for TLRY stock. Certain indicators suggest that this fall could be over. But, I'm not convinced. As such, I think this is a wait-and-see situation with Tilray.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 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Even at These Prices, Tilray Stock Still Has Too Much Success Priced In appeared first on InvestorPlace.
- Motley Fool•yesterday
Aurora Cannabis, Cronos Group, and Tilray Earnings Results Are In: Here's What They Could Mean for Canopy Growth
Based on its peers' results, Canopy Growth could be in for a pretty good quarter.
- InvestorPlace•2 days ago
Why Strong Q3 Numbers Make Aurora Stock Worth Buying
Aurora Canncbabis (NYSE:ACB) stock traded higher in mid-May after the Canadian cannabis giant reported third-quarter numbers that, while short of expectations, broadly confirmed that ACB is benefiting from favorable underlying trends. Investors cheered the favorable results, and ACB stock traded slightly higher in response to the report.Context is important in this case. Many expected Aurora's third-quarter numbers to be pretty bad. There was an overwhelming amount of data which suggested that the Canadian cannabis market had flat-lined in the early parts of 2019. Consequently, expectations were low heading into the print. * 7 High-Yield REITs to Buy (Even When the Market Tanks) But Aurora didn't report bad third-quarter numbers. Instead, Aurora reported pretty good third -quarter results. Across the board, everything from revenues to volumes to margins improved sequentially, implying that while the Canadian cannabis market may have flat-lined in early 2019, Aurora did not.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's bullish for ACB stock. For a long time, Aurora stock has been the most undervalued big name Canadian pot stock. Two things have held it back. Specifically, concerns that its current leadership position in the Canadian cannabis market is slipping and the fact that the company doesn't have a big-time investment from a consumer-staples giant.The first of those concerns was addressed by the company's strong third-quarter numbers. The second concern should be addressed later this year. As a result, now seems like a good time to get bullish on ACB stock, since the relative valuation discount of Aurora Cannabis stock won't last forever. Aurora Reported Strong NumbersFrom head to toe, Aurora's third-quarter earnings report was pretty good. Despite the headline misses, every single metric rapidly moved in the right direction for Aurora. This confirms that Aurora is not only a leader in the Canadian cannabis market, but also that it's widening its lead.Its total revenues rose 21% sequentially, as its revenue from consumers surged 37% quarter-over-quarter and its medical revenue increased 8%. Meanwhile, the number of kilograms of cannabis that it produced rose nearly 100% quarter-over-quarter, while the number of kilograms it sold rose over 40%. Production cost per gram of cannabis dropped more than 25% quarter-over-quarter, and its gross margins rose four points sequentially.Across the board, Aurora's operations improved from late 2018 to early 2019. In the wake of murmurs that the Canadian cannabis market was flat during that stretch and the muted growth numbers Cronos (NASDAQ:CRON) reported not too long ago, it's clear that Aurora is accelerating its leadership position in the Canadian cannabis market.This acceleration of leadership, coupled with the large investment that the company should receive soon, pave the path for ACB stock to head way higher in 2019. Aurora Stock Can Rise MeaningfullyThe relative undervaluation of ACB stock, which won't last too long, creates a compelling opportunity for investors in 2019.The market currently values each kilogram of cannabis that Tilray (NASDAQ:TLRY) and Canopy (NYSE:CGC) sold last quarter at about $1.5 million. The market simultaneously values each kilogram of cannabis that Cronos sold last quarter at more than $4.5 million. But when it comes to Aurora, the market thinks each kilogram of cannabis sold last quarter is worth less than $1 million.The disparity has nothing to do with growth. Aurora's revenues, production capacity, and sales volumes are growing as quickly as anyone else's in the industry. It has nothing to do with size, either, as Aurora is the second-biggest player in the market behind Canopy. Nor does it have anything to do with profitability, as Aurora has one of the highest gross margins in the sector.Instead, it has everything to do with two things. First, investors question the longevity and sustainability of Aurora's current leadership position. Second, investors question how Aurora can compete with companies that have received billion-dollar investments from consumer-staples giants.The first concern was addressed by ACB's strong third-quarter numbers. The second concern will be addressed later this year. Aurora didn't receive a large investment like Canopy or Cronos, yet But, considering this company continues to expand its production footprint and leadership position, and that ACB stock trades at a huge discount to its peers, it's only a matter of time before some big consumer-staples giant steps in and pours in a few billion dollars.Once that happens, there will be no reason for ACB stock to trade at a lower valuation than other major marijuana stocks. The discrepancy will go away, and as it does, Aurora Cannabis stock will fly higher. The Bottom Line on ACB StockAurora's third-quarter numbers were actually much better than most expected, and imply that Aurora is extending its leadership position in the Canadian cannabis market. The longer its position in the market improves, the higher the odds that the company will receive a huge investment from a consumer-staples giant. The higher those odds go, the higher ACB stock will go.As of this writing, Luke Lango was long ACB and CGC. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Yield REITs to Buy (Even When the Market Tanks) * 5 Great Blue-Chip Stocks to Buy Today * 7 Tech Stocks to Buy That Are Also Perfect for Retirement Compare Brokers The post Why Strong Q3 Numbers Make Aurora Stock Worth Buying appeared first on InvestorPlace.
- Motley Fool•3 days ago
How Did Tilray Stack Up to the Competition?
Here's a look at Tilray's recent performance compared with its largest competitors.
- Barrons.com•3 days ago
A Top U.S. Pension Loads Up on Alibaba, Cronos, and Zillow Stock, Sells PG&E
The Wisconsin Retirement System, one of only two fully funded state pensions, also slashed its holdings in PG&E, the struggling California utility, last quarter.
- Investor's Business Daily•5 days ago
Are These Marijuana Stocks A Good Buy Now? Look Past The Hype
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.
- InvestorPlace•5 days ago
Without a Better Story, Cronos Stock May Have Further to Fall
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.
- InvestorPlace•5 days ago
How Trade War 2.0 Benefits Struggling Cronos Stock
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.
- InvestorPlace•5 days ago
The Bullish Thesis for Tilray Stock Is Still Alive and Well
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.
- InvestorPlace•6 days ago
Cronos Stock Peaked But It Still Holds Promise
Cannabis stocks are starting to lose their shine. Ever since Altria Group (NYSE: MO) took a $1.8 billion stake in Cronos Group (NASDAQ: CRON) in December 2018, Cronos, and stocks in this sector are trending lower. With reality setting in following an uninspiring quarterly earnings report, what will it take for Cronos stock to stop falling?Source: Shutterstock Altria's $1.8 billion investment in Cronos is frighteningly big relative to the current revenue generation. In the first quarter, Cronos reported revenue of just CAD $6.5 million (USD $4.8 million). Q1 GAAP earnings-per-share came in at CAD 48 cents (USD 36 cents). Still, Altria's large investment is a bet on the future potential revenue from Cronos.The tobacco giant is bringing its decades of experience in navigating through a complex regulatory landscape. As it handles government regulatory affairs, licensing and other legal issues, Cronos will need Altria's expertise in marketing and developing a scalable cannabis supply chain.InvestorPlace - Stock Market News, Stock Advice & Trading Tips First Quarter HighlightsCronos reported an EBITDA loss of $8.9 million, with losses up 13% sequentially from Q4 2018. Higher expenses were partially offset by the higher net revenue of $6.5 million. Revenue increased due to dry flower wholesale revenue, which faced no excise tax reduction for the year. Supply constraints limited the revenue growth but the company expects additional production capacity arriving in the second half of this year. * 7 Stocks to Buy that Lost 10% Last Week Looking ahead, the adjusted EBITDA will still decline throughout 2019. Cronos plans on increasing R&D spend; this will lead to accelerated growth in 2020. Favorable Product MixASP (average selling price) rose 7% to $5.73 sequentially, due primarily to higher revenue from CBD oil. This product does not carry an excise tax reduction, lifting revenue. The 42% increase in gross profit, to $3.5 million, is due to the cost of sales falling 11% sequentially to $2.69. Building Supply ChannelIn the first quarter, Cronos secured listings with private retailers in Saskatchewan. This adds to its established distribution in Ontario, British Columbia, Nova Scotia and Prince Edward Island. Together, the five provinces account for 58% of the Canadian population.Thanks to the additional liquidity provided from Altria's investment in the company, Cronos continued scaling its business. It plans on increasing its capital investments to the production related to the Peace Naturals facility expansion. It also plans to invest in automation equipment at GrowCo and at the Israel facilities. Increasing OutputInvestors have high expectations for Cronos ramping up output. Its output was around 1,000 kilos in the first quarter but it aims for 40,000 kilos next. In its next quarterly earnings report, investors will look for evidence that the supply chain and distribution model supports the higher output.Cronos is prioritizing hemp over marijuana, which should lower the regulatory risks investors face in holding the stock. CBD regulations may still limit the market size in the near term in places like Germany or in the E.U. Still, expanding the output of CBD-based products take priority over THC because the market for the former will expand more rapidly. * 10 Stocks to Sell Before They Tank Your Portfolio Cronos is bullish on its partnership with Ginkgo Bioworks. From the balance sheet, investors will notice the R&D spend, in which some of it is related to its payments to Ginkgo. Cronos reached its milestones with Ginkgo and the latter continues to make progress in the area of synthetic biology. Valuation and Your TakeawayAfter Cronos reported first-quarter results, only one of the nine analysts covering the company updated their rating to a "hold." Per Tipranks, the average price target on CRON stock is $21.50, which implies an upside of over 42%. Cronos stock traded recently at $15.15.From a charting perspective, CRON stock looks like it peaked at between $22 - $24 in February. Selling pressure continues to pull the stock lower. But with billions in cash on its balance sheet, Cronos has plenty of resources to build its business. If it gets ahead of its competitors in getting its supply chain at full capacity, it will grow market share quickly. For that reason, the long-term prospects for Cronos appear bright.As of this writing, Chris Lau 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 Sell Before They Tank Your Portfolio * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Low-Priced, High-Potential Tech Stocks to Buy Compare Brokers The post Cronos Stock Peaked But It Still Holds Promise appeared first on InvestorPlace.
- InvestorPlace•6 days ago
Why Aurora Cannabis Stock Could Break Out From Its Trading Range
Since Aurora Cannabis (NYSE: ACB) stock surged in March, ACB stock has been stuck in a narrow trading range between $8.00 and $9.00. Had the markets not sold off due to U.S.-China trade tension worries, Aurora stock would probably not have fallen to $8.38 recently.But it was reported that cannabis sales in Canada had been unchanged over a three-month period. That should not sit well with the owners of ACB stock. * 7 Stocks to Buy that Lost 10% Last Week Cannabis Sales FlatStatistics Canada reported that cannabis sales in January and February were $79 million, flat from September and October 2018. And the 15,000 kilograms of production during that period, down from 22,000 kilograms in the December quarter, should dishearten those owners of ACB stock who expected growth of at least 10%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAurora Cannabis should get singled out because the company has announced that it will significantly increase its production capacity between now and mid-2020. Aurora expects its production to soon reach 150,000 kg/year, up from 150,000 kg/year in 2018. By mid -2020, it expects its output to surge five-fold to 500,000 kg/year. Low Production CostsAurora has touted its unique cultivation process that it says delivers mass scale, high quality and low production. Yet if cannabis demand is weak in Canada,the owners of ACB stock cannot be sure that global demand for cannabis is growing.In the second quarter, Aurora reported net revenue of $54.2 million. The company's revenue grew 83% quarter-over-quarter. But Aurora stock has an $8 billion market cap, and ACB stock has a price/sales ratio of around 20 times. To retain that high multiple, Aurora must continue reporting strong growth for several quarters. As long as Aurora keeps bringing new product to market, it should have no trouble growing sales and its patient base. (It had a patient base of 73,000 in Q2). $200 Billion Addressable MarketAurora believes the addressable market for medical and global adult-use cannabis is $200 billion. But some may worry that the weak Canadian data indicates that the targeted global market size may not materialize ever or at least for some time. Still, cannabis has the potential to disrupt many markets, including beverages, pharmaceuticals, and tobacco.It is not surprising that Altria (NYSE: MO) invested CAD $2.4 billion (USD $1.78 billion) in Cronos Group (NASDAQ: CRON) last December. That investment lifted the valuations of nearly all cannabis stocks, including ACB stock. So, as cannabis companies report their quarterly earnings, the owners of Aurora stock will look for proof that growth is still in the cards for the cannabis sector. High Expectations for AuroraAurora reported that its revenue had soared 260% in the second quarter, while its average selling price came in at $8.39. But it reported a net loss of CAD $158.3 million (USD $117 million).Though the number of the company's registered medical patients grew 69% to 77,136, the company still lost money. But as Aurora leverages its R&D efforts to develop high-margin products, it will be profitable sooner than most think. That should be a positive catalyst for ACB stock. The Bottom Line on ACB StockAurora Cannabis stock is at a crossroads. Aurora stock may drift lower if markets grow wary of cannabis stocks. Conversely, strong revenue growth could lift Aurora Cannabis stock back to the $9 - $10 range.As of this writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 10 Stocks to Sell Before They Tank Your Portfolio * Top 7 Dow Jones Stocks of 2019 -- So Far * 5 Low-Priced, High-Potential Tech Stocks to Buy Compare Brokers The post Why Aurora Cannabis Stock Could Break Out From Its Trading Range appeared first on InvestorPlace.
- InvestorPlace•6 days ago
Should You Buy Canopy Growth Stock? 3 Pros, 3 Cons
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.
- Motley Fool•6 days ago
This Pot Stock Has Turned Into Wall Street's Pinata
Wall Street has handed out not one, two, or three... but seven price-target cuts to this marijuana stock since the month began.
- InvestorPlace•6 days ago
After Investors Ignored It, Is Hexo Stock Now Getting Too Much Attention?
The case for cannabis producer Hexo (NYSE:HEXO) has been based in part on the idea that investors have missed the story. When pot stocks started taking off early last year, the HEXO stock price still languished.More recently, pot plays like Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) have dominated the headlines; Hexo seemed to get a fraction of the coverage of those peers.That's clearly starting to change. The story behind Hexo is gaining a broader reach -- and the Hexo stock price is responding in kind. The question at this point is whether that's a good thing -- and whether a strong YTD is starting to price in at least some of the opportunity here.InvestorPlace - Stock Market News, Stock Advice & Trading Tips HEXO Stock Price SoarsWhile cannabis stocks soared in 2018, HEXO mostly was left out of the gains. The stock gained just 5% for the year, as a rally that began in September quickly fizzled.It's been a different story in 2019. HEXO has gained 101% YTD as of this writing. And there are some fundamental reasons for the gains. The announced acquisition of Newstrike Brands (OTCMKTS:NWKRF) was well-received. Hexo raised cash at the beginning of the year, putting its balance sheet in good shape. Second-quarter results in March looked impressive: sales increased over 1,200%. * 7 Dividend Stocks to Buy as the Trade War Reignites But a big part of the story with HEXO stock in 2019 is that its story has spread. That's most apparent when looking at the stock's trading volume. At the end of last year, 30-day average daily volume was under 400,000 shares. Four and a half months later, it's at 5.3 million.The company's listing on the New York Stock Exchange has been a huge driver of that volume. And it's helped the HEXO story become more widely known. That, along with the Newstrike deal and the strong Q2, has been why HEXO stock has outperformed other pot stocks.CGC shares are up 70% so far this year, and Aurora Cannabis (NYSE:ACB) about the same. (Interestingly, an NYSE listing had the opposite effect on ACB stock, albeit in a very different market for marijuana stocks.) Cronos Group (NASDAQ:CRON) is up 47% in 2019; TLRY shares actually have declined 30%. Is There Juice Left in HEXO?So the interesting question here is whether there's more outperformance on the way with HEXO -- or if the market has caught up with the story at this point. Josh Enomoto wrote last month, with the HEXO stock price not far from current levels, that the stock still looked compelling.And Enomoto makes several solid points. The Newstrike deal adds capacity. The combined companies' total production capacity is 150,000 kilograms of cannabis annually.But the company's focus on edibles and beverages -- including a joint venture with Molson Coors Brewing (NYSE:TAP) -- also limits its exposure to oversupply concerns I've previously highlighted.Increasingly, it appears that simply producing weed isn't going to be the path to enormous profits. Cannabis plays need to be differentiated. Hexo's goal of becoming "the premier branded ingredients for food cannabis company", as it put it in a recent presentation, creates that differentiation.At the same time, the gains in HEXO stock have moved its valuation to the nosebleed levels seen elsewhere in the space. Its market capitalization, pro forma for the Newstrike deal, is likely nearing $2 billion. (It's not clear exactly how many shares will be issued to Newstrike shareholders. Hexo's most recent filing with Canadian regulators also cites nearly 50 million shares subject to warrants not included in the current diluted share count of nearly 200 million.) * 6 Trade War Stocks With a Lot of Risk Meanwhile, Q2 net revenue, as impressive as growth was, came in at just C$13.4 million (~$10 million). HEXO stock, then, is trading at something like 50x its current revenue run rate. Just Another Pot Stock?The combination of valuation and trading volume suggests that HEXO no longer is an "under the radar" play. And that makes the case a bit tougher from here.At this point, investors have no shortage of options when it comes to investing in cannabis. And the choice largely comes down to how an investor sees the space playing out. Those looking for scale should choose Canopy or Cronos, both of which are backed with billions of dollars from Constellation Brands (NYSE:STZ) and Altria (NYSE:MO), respectively.Tens of smaller, high-risk plays still sit on over-the-counter markets. Aurora offers the most diversification. Tilray might be getting cheap after its long decline. Another alternative is the 40-pot-stock ETFMG Alternative Harvest ETF (NYSEArca:MJ), which includes HEXO stock among its top 10 holdings, at 3.76% of the portfolio. CRON is the largest holding, at 8.71%.The case for HEXO is intriguing, particularly for those (like Enomoto) who see big growth in edibles and beverages. But the story is out there -- and the edge might not be quite what it was just a few months ago.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 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 After Investors Ignored It, Is Hexo Stock Now Getting Too Much Attention? appeared first on InvestorPlace.
- InvestorPlace•7 days ago
3 Reasons Not to Sell Canopy Growth Stock
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.
- Motley Fool•7 days ago
Is Tilray Finally a Buy?
Is Tilray's strong first-quarter report a good reason to buy this flagging pot stock?
- Market Exclusive•7 days ago
Cronos Inks $30 Million Supply Agreement with Medipharm
Cronos Group Inc (NASDAQ:CRON) through its subsidiary Peace Naturals Project, has signed a multi-year supply agreement with Medipharm, an affiliate of Medipharm Labs Corp (OTCMKTS:MEDIF) on May 13, 2019. Under the terms of the agreement, Medipharm Labs will supply Peace Naturals $30 million worth of high-grade private label cannabis concentrate for over 18 months. The […]The post Cronos Inks $30 Million Supply Agreement with Medipharm appeared first on Market Exclusive.
- Motley Fool•7 days ago
Could This Be Cronos Group's Most Logical Acquisition Target?
Instead of acquiring additional production, Cronos may choose to fortify the strongest aspect of its business.
- InvestorPlace•8 days ago
5 Top Stock Trades for Wednesday: RL, GPRO, CRON
Stocks are seeing a solid bounce on Tuesday, after taken a pretty serious beating on Monday. The bounce went through a few key technical levels on the short term. Now it gets a little trickier to navigate as we approach the middle of the recent range -- especially since many investors feel that another leg down is likely here. Let's look at some top stock trades for tomorrow. Top Stock Trades for Tomorrow No. 1: Ralph Lauren Click to Enlarge Shares of Ralph Lauren (NYSE:RL) are being hit on Tuesday, falling 4.25% but are off the lows of the day after the company reported earnings. It's promising to see RL bounce, but it's not out of the woods yet.I would feel better about RL if it clawed its way back above $115. That's particularly true if we start getting more selling pressure in the broader markets. The stock is now below the 20-day and 50-day moving averages and if it can't reclaim this area, lower prices may be in store.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI'm watching the $101 area, near the 200-week moving average. Below $100 and the 2018 lows near $95 are on the table. * 6 Trade War Stocks With a Lot of Risk RL is sort of in no-man's land here. I need to see more selling or a further rally to get more interested. Top Stock Trades for Tomorrow No. 2: GoPro Click to Enlarge Shares of GoPro (NASDAQ:GPRO) are ripping higher on Tuesday, climbing almost 10% on the day. The move emphasizes an important breakout.Less than two weeks ago we asked if GPRO stock could run 20% to new 2019 highs. I guess we have our answer. But now what? Shares broke through multi-year downtrend resistance (blue line) in March and then pulled back and tested that level this month. Prior resistance held as support and here we go.In the short-term, bulls have won the battle. But for the momentum to continue, GPRO has a tough test ahead of it. Shares need to push through this $7.60-to-$8 area to really get a sustainable move higher. If it can, perhaps a move up toward the 200-week moving average is possible.On a pullback, I prefer to see the 10-week moving average hold as support, but need to see the 50-week hold. Below and we get a retest of prior downtrend resistance. Top Stock Trades for Tomorrow No. 3: Cronos Group Click to Enlarge Where Cronos Group (NASDAQ:CRON) is bouncing from comes as little surprise to InvestorPlace readers. However, be careful as it approaches channel resistance and a declining 20-day moving average.If it can close above the 20-day, then a breakout could get underway. Short of that though, resistance could knock it back down to $14 or down to the 200-day moving average. Top Stock Trades for Tomorrow No. 4: Take-Two Interactive Software Click to EnlargeTake-Two Interactive Software (NASDAQ:TTWO) is finally starting to move higher, this time on earnings, and is repairing some of the technical damage it suffered in Q4 2018 and Q1 2019. Shares are over downtrend resistance, as well as the 50-day and 20-day moving averages.Now what?The next test will seemingly come from the 200-day near $110. But keep in mind that the 38.2% Fibonacci retracement for the 52-week range rests at $105.61. Failure to hurdle this level could stop TTWO relatively soon. Either way, see that $100 and/or the 20-day moving average hold as support. Top Stock Trades for Tomorrow No. 5: Tanger Factory Outlet Click to Enlarge Tanger Factory Outlet Center (NYSE:SKT) has been disastrous and recently hit a new 52-week low. Its dividend yield is now north of 7.5%, although the payout appears to be safe.The 10-week moving average continues to pressure shares lower, so until SKT can close above that, it remains a tough buy from a trading perspective. The $19 level also acted as a floor for SKT in the past. Ideally we will get the stock above both levels, which will show that it's got at least a little bit of momentum.If it can't get back above $19 and its 10-week moving average continues to pressure it lower, see if its lows hold. A close below $18 likely sends SKT to new lows.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 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 5 Top Stock Trades for Wednesday: RL, GPRO, CRON appeared first on InvestorPlace.
