|Bid||0.0000 x 2200|
|Ask||0.0000 x 4000|
|Day's Range||0.0000 - 0.0000|
|52 Week Range|
|Beta (3Y Monthly)||4.74|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
I've always regarded publicly traded marijuana companies like Canopy Growth (NYSE:CGC) as transformative investments. Prior to the legalization movement, an equity like CGC stock would have been impossible to materialize. Therefore, an entire industry is enjoying revenue streams that simply didn't exist several years ago.Source: Shutterstock But as much as I continue to emphasize the description "transformative," the CGC stock price is unfortunately not cooperating. After getting off to a great start in January, shares had only extracted brief moments of upside. However, since late April, the trajectory is decidedly negative, with Canopy Growth stock shedding roughly 30%.So what explains this mismatch between longer-term fundamental potential and the current volatility in Canopy stock? First, the company's fiscal fourth quarter of 2019 earnings report wasn't great. Although Canopy beat its revenue target, it widened per-share earnings losses much more than analysts expected.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, the markets didn't appreciate certain details. For instance, Canopy's recreational marijuana sales were down from the year-ago quarter. So too was the volume of cannabis sold. Shortly after the disclosure, the CGC stock price tumbled badly.And we haven't recovered from the turmoil. For the month so far, Canopy Growth stock is down 14%. * 7 Stocks Top Investors Are Buying Now More bad news comes in the form of revised profitability expectations. According to an interview between Jefferies' covering analyst Andrew Bennett and Canopy's CFO Mike Lee, CGC stock won't be profitable in its fiscal 2020 (April 1, 2019 - March 31, 2020).Of course, the counterargument is that we should give Canopy stock some time. However, since marijuana stocks are inherently emotional investments, the profitability downgrade represents a serious distraction. Why You Can Still Trust CGC StockBefore you give up on Canopy Growth stock, though, you should know that its volatility is not isolated. Other major cannabis firms, such as Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY), have faltered as well this year.That's not to say you should feel good about this or any other portfolio loser. Certainly, other investments' losses have no bearing on your target asset's decline. However, the shared fallout demonstrates that the issue is systemic rather than individualized.And what's causing cannabis stocks to shed so many percentage points in the markets? Mostly, it's institutional traffic jams. Specifically, Health Canada, our northern neighbor's department of national public health, is inundated with cannabis-licensing applications.Unfortunately for most sector players, Health Canada will need substantial time to process all the paperwork. In the meantime, viable projects just sit, waiting for approval. Obviously, this presents a massive dark cloud on the CGC stock price.However, I don't expect this situation to continue without some kind of resolution. At worst, Health Canada will just roll up its sleeves and crank out the application approvals. This would mean that Canopy Growth stock would likely enjoy a delayed bull run.But at the same time, I can envision emergency support at Health Canada. As long as those licensing applications sit, the Canadian government is needlessly throwing away cannabis-related tax revenues. Essentially, this would void the entire economic case for going green.Moreover, the health agency's backlog is a known headwind. While I can't say this bearish factor has been completely priced into CGC stock, I believe we're getting close.If it's any comfort, I'm putting money where my mouth is, having recently picked up Hexo (NYSE:HEXO) stock. We've Seen This Before …Another reason why I'm not panicking on names like Canopy Growth is that we've seen this narrative before.Prior to Canada becoming the first G7 nation to legalize recreational marijuana, demand for cannabis stocks spiked dramatically. Again, the markets had that transformative investment idea in their heads.But as we all know from retrospect, the investment community couldn't support the wild valuations that cannabis firms received. As a result, marijuana stocks tumbled.I think we're seeing the sequel to this movie: speculators love the potential of marijuana stocks, but then they encounter an operational or other fundamental challenge (like Health Canada). Those same speculators panic out of the markets, wreaking havoc on the CGC stock price and similar investments.However, these outside challenges will eventually fade. The Health Canada backlog is an external pressure that has nothing inherently to do with cannabis demand. If you think cannabis stocks are wild, just wait until they have a clear road ahead.As of this writing, Josh Enomoto is long HEXO. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post Why I Still Believe in Canopy Growth Stock and the Weed Market appeared first on InvestorPlace.
When the year started, Hexo (NYSEAMERICAN:HEXO) stock got off to a nice start. The shares went from $5 to $8 -- riding the cannabis bull wave spurred by the legalization in Canada. But unfortunately, the expectations were too exuberant. Since late April, the HEXO stock price has gone into reverse; right back to $5.Source: Shutterstock But the company is not alone. Various other cannabis stocks have also been in the downtrend, such as Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB) and Cronos Group (NASDAQ:CRON). For the most part, all have had challenges in scaling up for the enormous demand in the industry.Now in the case of Hexo Corp stock, the latest earnings report was particularly disappointing. The company reported revenues of 13.02 million CAD, compared to the Street estimate of 14.8 million CAD. In fact, there was a quarter-over-quarter drop of nearly 9%. There was also weakness in the average price of adult-use dried grams as well as the average gross selling price per gram.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet the choppiness should not be a surprise. The cannabis is still in the early stages and there will be growing pains. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip But despite all this, I still think HEXO stock represents an interesting opportunity. And to see why let's take a look at the following catalysts: HEXO Stock: ScaleWhile at an investor conference, Tilray (NASDAQ:TLRY) CEO Brendan Kennedy and CFO Mark Castaneda provided some interesting insights about the cannabis opportunity. One of their main contentions was that there will ultimately be a handful of major winners in the market. After all, a company will need a global platform to realize economies of scale so as to provide competitive pricing.Granted, as for HEXO, the company has struggled to ramp up production. Yet this should prove temporary. The company already is the dominant player in the Quebec market (which is the second largest in Canada). What's more, HEXO has began construction of a 323,000 square-foot facility in Greece. The acquisition of Newstrike Brands should also be a boost.Keep in mind that Hexo's management has reiterated its aggressive growth for revenues. For fiscal 2020, the forecast is for 400 million CAD. HEXO Stock: Strategic PartnershipHEXO has entered a 50-50 strategic relationship with Molson Coors (NYSE:TAP). Both parties will develop drinks that are infused with cannabis. Consider that the goal is to begin selling in Canada on Dec. 17.Gauging the potential impact of this is tough. But having the expertise, marketing capacity and distribution of TAP will be significant.But this is likely to just be one of the major deals for HEXO. During the latest earnings conference call, CEO Sebastien St.-Louis noted that he is talking to over 60 potential partners - and that there should be another deal announced by the end of the year. HEXO Stock: Liquidity and ValuationHEXO stock will soon be listed on the venerable New York Stock Exchange. This will put the company in a rare group, with only two other cannabis operators (CGS and ACB). The new listing will provide more visibility for the company - helping to snag partnerships and deals. But it will also mean more liquidity for the shares.Oh, and the valuation on HEXO stock is at fairly reasonable levels, at least compared to its other large rivals. For example, Bank of America (NYSE:BAC) analyst Christopher Carey believes it is the most attractive within his coverage universe - and he has a juicy $10 price target on the stock.Tom Taulli is the author of the upcoming book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Reasons Investors Should Be High on Hexo Stock appeared first on InvestorPlace.
NYSE: HEXO) announces that HEXO co-founder, Adam Miron, has decided to step down from his position as Chief Brand Officer. Adam Miron co-founded HEXO six years ago with Sebastien St-Louis and has played a key role not only in building the company, but as an innovative leader in the cannabis industry.
HEXO (HEXO) has a lot going for it, as it has 600,000 square feet of manufacturing and extraction facilities ready to go, and an annual run-rate of 150,000 kilograms after it acquired Newstrike Brands.While its most recent earnings report was a weak one, the company will finish the fiscal year ending next June, with approximately C$400 million in revenue.With two of its major competitors - CannTrust and Canopy Growth slowing down, it provides an opportunity for the company to grow sales in a less competitive market.Its major problem at this time isn't primarily from its competitors, but from Health Canada, which stands in the way of short-term growth and momentum.Health Canada and derivativesThe short-term outlook for products that generate a higher margin was recently weakened because of Health Canada announcing the first batch of them reaching retail outlets would be pushed back to the middle of December. Originally the launch was expected to come in the middle of October.Health Canada also said the products, which include concentrates, edibles, infused beverages, and vapes, among others, would be rolled out on a staggered basis, meaning some won't reach store dispensary shelves until early 2020.That will hurt the overall potential for HEXO at a time when the distractions now enveloping CannTrust and Canopy Growth present it with the opportunity to sell at higher prices. It should be able to retain some of its pricing power with existing products, but it's leaving a lot on the table that should have been available in the last quarter of the calendar year.I'm not saying HEXO isn't going to rebound from the last earnings period, only that it could have done much better in the last half than it will with the delay of higher margin products being allowed for sale.With over 600,000 square feet ready for extraction and manufacturing, it will temporarily hold back the potential of HEXO in the short term; especially with revenue, margins and earnings.The good news is it doesn't change the long-term prospects for the company, and patient investors should be rewarded.Canopy Growth and CannTrustWhat some in the market aren't taking into account yet concerning the debacle surrounding CannTrust and the firing of Canopy Growth founder and co-CEO Bruce Linton.CannTrust got busted for producing and selling non-licensed product, resulting in the company halting sales and distribution until everything is cleared up. And Canopy Growth appears to be taking a more measured approach to growth, which means it isn't going to be as aggressive as it was in the past.That opens up an opportunity for competitors like HEXO which will be called upon to fill in some of the supply gap coming from these events and decisions.This in itself should provide HEXO with more pricing power, but again, it won't help it with derivative products until it is allowed to sell them.ConclusionHEXO recently started trading on the NYSE, which over the longer term, should benefit the company. In the near term a number of its peers didn't get the boost from doing the same, in spite of the hype, but after a while started attracting more investors.With its fundamentals remaining in place and several positive catalysts in place that will boost its performance and share price over time, the company is positioned for a nice run over the next 12 to 18 months.Because of Health Canada's delay concerning derivative products, it'll take a little longer for HEXO to get the full benefit of its potential, but once that's in play, it should surprise many to the upside. That said, investors will have to be patient as it will take time to unfold.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on HEXO: * Cannabis Stock HEXO to Benefit from Sector Chaos * Hexo Stock: When the Bulls Aren’t Bullish Enough * A HEXO Bear Says the Stock Has More Room to Fall * Should Cannabis Stock HEXO Be Bought on Weakness? More recent articles from Smarter Analyst: * Can Curaleaf Stock Keep Going After This Week’s 22% Pop? This Analyst Says Yes * Aurora Cannabis: Worrying Outdoor Shift * Aurora Cannabis (ACB): Worrying Outdoor Shift * Organigram (OGI) Growth Experiment Hits Earnings - Long-Term Narrative Remains Solid
There will always be naysayers in the sphere of stock market investing, especially when it comes to cannabis stocks. This is true for the bigger names like Canopy Growth Corp (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And it also applies to today's spotlight name, Hexo (NYSE:HEXO). But does Hexo stock deserve its reputation as a volatile, dangerous investment?I won't deny that Hexo Corp stock is a speculative play. But I wouldn't consider it any more dangerous than the broader cannabis market. You're either a believer in marijuana stocks or you're not. And if you can handle some risk, then Hexo stock could be your ticket to surprisingly impressive returns.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Too Legit to QuitOnce they were marginalized companies, but Canopy and Aurora have since transitioned from thinly traded over-the-counter markets to the major exchanges. In turn, this emboldened other cannabis up-and-comers to likewise move to the bigger exchanges.Hexo would be a textbook example of this. They're now being promoted from the much smaller NYSE American exchange to the New York Stock Exchange. Hexo Corp stock owners shouldn't experience any negative impact. Further, the ticker symbol of HEXO will remain the same. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip CEO and co-founder Sebastien St-Louis rejoiced in this headline-making move. He commented that Hexo Corp is "extremely pleased to list on the NYSE and believe it reaffirms HEXO's strong track-record for exceptional corporate governance and is further proof that we are a valuable cannabis industry partner for Fortune 500 companies."I'd affirm that just like Canopy and Aurora, Hexo deserves to play on the same field as other major-league batters. One of the biggest licensed cannabis companies in Canada, Hexo Corp serves both the adult-use and medical-use Canadian markets through a multitude of popular brands. A Historic First for Hexo Corp StockLest we forget, this once under-the-radar company generated huge headlines. Hexo was the first major cannabis producer to ink a deal with a brand-name beverage company. Moreover, it did so with the explicit purpose of developing and manufacturing cannabis-infused beverages. In a landmark agreement with Molson Coors Brewing Company (NYSE:TAP), Hexo moved even faster than Canopy to map out a definitive plan to bring cannabis-enhanced drinks to the public.And it's not just about beer, as the two companies are also considering cannabis-infused water and hot beverages. According to Molson Coors president and CEO Mark Hunter, the total cannabis market in Canada is approximately valued between $7 billion to $10 billion. Within that figure, beverages account for anywhere from 20% to 30% of the total, or as much as $3 billion. That's a massive untapped (pardon the pun) market for Hexo stock. A Major AcquisitionIn what I believe to be a game-changing expansion, Hexo Corp acquired what was one of my favorite cannabis companies this year, Newstrike Brands, for around $197 million. In so doing, Hexo added another 470,000 square feet of licensed indoor cultivation space. Keep in mind it already has an expansive 1.31 million square feet of grow space.Moreover, Hexo will now have access to the numerous provincial deals which Newstrike already had in place. Altogether, Hexo's management expects the Newstrike acquisition to yield 400 million CAD in net revenues by the year 2020. The Bottom Line on HEXO StockI'm looking forward to watching the cannabis-investing community bid the HEXO stock price up through the end of this year. And probably the party will continue well into next year.If you're in the pot game, don't sleep on Hexo stock: this could be the company to bring legalized cannabis to the masses.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Reasons Why HEXO Stock Is the Real Deal appeared first on InvestorPlace.
Most owners of Canopy Growth (NYSE:CGC) stock have embraced micro details like the company's specific acquisitions or macro matters like the slow march towards the legalization of recreation cannabis in the U.S.Source: Shutterstock Most owners of CGC stock, however, have ignored the area in between those two extremes. That's the area where a company takes little building blocks like acquisitions and assembles them on a major foundation, enabling it to earn a profit. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip Failure to respect that middle ground ultimately cost the now-former co-CEO of Canopy Growth, Bruce Linton, his job. Booze company Constellation Brands (NYSE:STZ), which is not only a major Canopy Growth stock holder but also has effective control of CGC's board of directors, fired Linton in early July primarily because of CGC's continued heavy losses that have weighed on CGC stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCanopy's other top executive, Mark Zekulin, is also on his way out.At first glance, it would be easy to simply chalk the whole affair up to company-specific, and even personnel-specific, misunderstandings. And there's some truth to that.In a much more meaningful sense, though, the surprising shakeup may be a microcosm of bigger cracks starting to form within the cannabis craze. Not unlike the ultimate fate of rare earth metals stocks in 2010, solar panel stocks in 2007 and 3D printing stocks in 2013, reality is starting to seep into marijuana mania.The owners of marijuana stocks are understandably not liking what they're seeing. Trouble in ParadiseDuring Constellation's most recent earnings call, CEO Bill Newlands explained he was "not pleased with Canopy's recent reported year-end results." For Canopy's fourth quarter that ended in March, the company posted an EBITDA loss of CA$257 million on gross revenue of CA$140.5 million. The total loss of CA$323 million translates into a loss of 22 Canadian cents per share of CGC stock, or 17 U.S. cents per share (U.S.) for the NYSE-listed equity of the Canadian company.The full year was even uglier.Perhaps even worse, sales of recreational marijuana -- which only became legal in Canada as of October -- fell nearly 4% versus Q3Don't think for a minute that Canopy Growth is the only marijuana stock flashing warning signs, though.Take CannTrust Holdings (NYSE:CTST), for instance. CTST stock has been nearly cut in half since July 5th, when it was discovered that its cannabis production was exceeding legal limits.I'm not suggesting that all cannabis companies are secretly growing plants they shouldn't be growing. But CannTrust's actions do point to the growing pressure for production hikes within the fiercely competitive cannabis market. That same pressure may well be inspiring other similarly risky efforts, including ill-advised acquisitions.To that end, Aurora Cannabis (NYSE:ACB) was pegged by Motley Fool's Sean Williams as a name that's exceedingly vulnerable to major writedowns in upcoming quarters. It's sitting on more than $3 billion worth of goodwill added to its balance sheet to account for a wave of dealmaking that's yet to bear fruit. The company must soon start conceding, via writedowns, that it overpaid for those companies.Bloomberg issued the same warning just a few days ago, with Bloomberg Intelligence analyst Kenneth Shea noting that some of the industry's most-loved names had driven an "aggressive pace of acquisitions at prices above book value." Aurora, Canopy Growth and Aphria (NYSE:APHA) were specifically cited as at-risk cannabis stocks.Hexo's (NYSEAMERICAN:HEXO) shares fell sharply last month after it reported that its cannabis sales somehow slumped during its third quarter, while its loss increased again.The list of red flags facing marijuana stocks continues to grow. And those red flags are starting to weigh on cannabis stocks in general and Canopy stock in particular. The Bottom Line on CGC Stock and Other Marijuana StocksOn their own, none of these developments or data nuggets is insurmountable. Indeed, most cannabis investors appear to know they're counting on hype rather than results to drive marijuana stocks higher, and that the cannabis market may not fully gel for years.In the aggregate, however, the paradigm shift in the tone and quality of the headlines not only poses a threat to the CGC stock price, but to all cannabis stocks.For the first time since the cannabis craze took shape in 2017, with Canopy Growth stock largely leading the charge, the industry and its individual components are being asked to justify their heavy spending in the name of future market share.As Charles Taerk, the CEO of Faircourt Asset Management, recently put it, the market is taking note of winners and losers. He explains "Now investors are starting to judge the companies a little differently. They're starting to say, 'Wait a second, how are they profitable and you're so far from profitable?'"An inability to justify the rapid move away from that profitability just cost Canopy Growth's co-CEO his job, serving as a shot across the bow for other cannabis company chiefs.The CGC stock price may have started this week out with a recovery effort, but the bar is quickly being raised for Canopy Growth stock and its peers. As we learned from crazes like 3D printing, rare earth metals and solar panels, not every player survives once the hype fades and companies have to at least move towards, rather than away from, profitability.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post The Firing of Canopy Growth's co-CEO Is Only Part of the Case Against CGC Stock appeared first on InvestorPlace.
Anyone with interest in the cannabis sector, or who has some skin in the game, knows that it can be a full-time job to keep up with the endless news flow on the many companies. In fact, to dive right in, perhaps even the most religious followers of the marijuana industry might not know that Canadian cannabis producer HEXO Corp (HEXO) has been trading on the NYSE American––or the AMEX exchange for short––and not the main NYSE exchange.However, HEXO will transfer its listing from the AMEX to the NYSE and will commence trading today. The company’s CEO and co-founder Sebastien St-Louis shared his excitement of the transfer and belief that the listing “reaffirms HEXO’s strong track-record for exceptional corporate governance and is further proof that we are a valuable cannabis industry partner for Fortune 500 companies. HEXO is well-positioned to support consumer packaged goods companies looking to enter the space given our success in the industry, our established infrastructure including a manufacturing center of excellence in Ontario, Canada, our technology to support mass-scale extraction and processing of advanced cannabis products, and our regulatory expertise.” While the CEO’s enthusiasm is certainly clear, what does this mean for HEXO and what are possible outcomes from this listing transfer?What History Tells UsWe have seen many of the big players in the cannabis sector push for American listings including Aurora Cannabis, Canopy Growth Corporation, Cronos, Aphria, and Canntrust, to name a few. This means that HEXO is now officially joining the ranks of the industry leaders in the cannabis sector. While this might seem like a huge win for HEXO, investors should note that anytime a cannabis company has listed on to one of the larger American exchanges, its stock has dropped substantially. In fact, Aurora, Aphria, and Canntrust are three separate examples of companies that saw 52-week lows in the months following an up listing to American exchanges. This might be a strange coincidence, but a more plausible explanation is that many of these companies rallied on the news that they were up listing only to sell off or get caught in a scandal when the up listing eventually occurred. While history may not repeat itself in the case of HEXO, investors would be wise to tread cautiously as trading commences.The Current State of Affairs for HEXOHEXO’s 1-year price performance indicates that the stock is currently sitting right in the middle of its 52-week highs and has substantially pulled back from it 52-week highs over $10 (CAD). HEXO’s CEO mentioned in recent comments that the company’s achievements prove that HEXO is a valuable Fortune 500 company partner, and this could be a hint that more partnerships are on the way. This transfer from the AMEX to the NYSE could be another step for the company in solidifying its position as an industry leader and should serve to enhance the company’s solid reputation. Additionally, HEXO should not be underestimated when it comes to partnerships. The company holds a Joint Venture agreement with Molson Coors for plans to develop cannabis infused beverages. HEXO also has a mid-level production capacity of roughly 150,000 kgs which puts them right in the middle of the largest companies with regards to production capacity.The Fate of HEXOThe coming weeks are going to be interesting for HEXO as the stock officially transfer and commence trading on the NYSE. At current prices HEXO remains a top stock to watch as the company has done a great job maintaining its reputation in what seems to be tough and competitive environment. Potential upside for HEXO is not in the company's current operations. Instead, its value lies within its partnership with one of the most reputable brewing companies in North America. This is where HEXO has a huge advantage over other companies and could dominate the space. It will have the ability to leverage Molson Coors’ distribution channel for the eventual roll out of cannabis infused beverages, which would be a massive stream of revenue in the years to come. This coupled with HEXO’s growing popularity and untarnished reputation puts it as one of the top stocks to watch in the weeks to come.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on HEXO: * Cannabis Stock HEXO to Benefit from Sector Chaos * Hexo Stock: When the Bulls Aren’t Bullish Enough * A HEXO Bear Says the Stock Has More Room to Fall * Should Cannabis Stock HEXO Be Bought on Weakness? More recent articles from Smarter Analyst: * Can Curaleaf Stock Keep Going After This Week’s 22% Pop? This Analyst Says Yes * Aurora Cannabis: Worrying Outdoor Shift * Aurora Cannabis (ACB): Worrying Outdoor Shift * Organigram (OGI) Growth Experiment Hits Earnings - Long-Term Narrative Remains Solid
It's a news item that may have nonchalantly passed over many traditionally minded investors' radars. In a few days, Hexo (AMEX:HEXO) will trade on the grandest stage of all: the New York Stock Exchange. Therefore, even though the HEXO stock price incurred ugly volatility in recent months, that could soon change for the better.Source: Shutterstock After a tough earnings report, Hexo could use some good news. This is the positive development that embattled stakeholders have been looking for.Getting listed on the top exchange is a significant event for any publicly traded company. But what makes the promotion for HEXO different is that it also positively impacts the broader marijuana industry. That's because, from day one, all cannabis players searched for one thing: credibility.InvestorPlace - Stock Market News, Stock Advice & Trading TipsWith the "upgrade" in Hexo, the organization joins powerhouse names like Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). And this in turn gives the green sector one more name within the elite circle.Now, I'm not suggesting that mere inclusion in the NYSE is the end all, be all. Over the years, we've seen the top exchange delist several names that didn't meet its standards. But that's also the draw for Hexo stock: the NYSE won't let just anyone in. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Among many other factors, a prospective corporation must demonstrate broad demand and value of its equity. Furthermore, they must submit financial documents proving their viability. Given every opportunity to find something wrong, the NYSE gave HEXO stock a pass.That's got to be worth something! Good News Is Gold for HEXO StockDespite the above points, I may still have some doubters regarding the NYSE move's importance. At the end of the day, critics might argue, it's just a change of scenery for Hexo.Nevertheless, it's still a positive development for the budding company, and good news in this sector is worth its weight in gold. Unlike most other investment markets, cannabis-based securities primarily are not driven by the fundamentals. Instead, they're narrative-driven, which can be good and bad.On the negative end of the spectrum, you just need to look at the recent earnings season for marijuana firms. Company after company tumbled over the past several weeks, and for what? Failing to meet consensus expectations for earnings per share and revenue growth?As I explained regarding Aurora Cannabis' bout with volatility, Wall Street is not playing fair with marijuana businesses. Analysts know that due to a murky legal environment in the U.S., cannabis operators have limited options. Thus, the poor earnings results don't accurately reflect demand. Rather, they reflect unnecessary market inefficiencies due to myopic laws.Yet HEXO falls because most investors are trained to look at the numbers. Admittedly, they don't look good.But the numbers don't matter now as much as the narrative. Because for botanical advocates, the main goal was never about Canadian legalization. Instead, the grand prize is full legalization in the U.S.And stories like HEXO being listed in the NYSE add more leverage and credibility to this prospect. With enough positive headlines, the narrative can quickly shift from cannabis firms not making their numbers to potentially advantaging an unprecedented opportunity.That's why I'd advise against panicking: we're just getting into the good stuff for Hexo Corp stock. Ample Evidence Points to Full LegalizationSeveral years from now, I'm almost certain that we'll look back on names like Hexo stock with regret. Not because their shares did poorly but because they catapulted to unbelievable heights.Think I'm high on something? Consider that right now, cannabis is the fastest-growing job market in the U.S. Remarkably, this is true despite the fact that many states still haven't legalized marijuana to any degree.Moreover, several European countries are shifting favorably to weed. Late-last year, South Korea legalized medical marijuana. The concept was so groundbreaking - because the country is socially very conservative -- that it caught observers by surprise.I could go on and on. But the point is that the world is gravitating toward marijuana legalization. Eventually, the rest of the markets will catch up to this fact. And this is the ultimate narrative that can push Hexo Corp stock to crazy levels.Josh Enomoto is considering buying Hexo stock in the next 72 hours. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post The NYSE Listing Means Legitimacy and Bigger Things for Hexo Stock appeared first on InvestorPlace.
Cannabis stocks need to fight their way out of their funk. That's true for names like Canopy Growth (NYSE:CGC) and New Age Beverages (NASDAQ:NBEV), but it's critical for Cronos Group (NASDAQ:CRON). CRON stock is not only down by a third since its March high, but is on the verge of breaking under a crucial technical support level.Source: Shutterstock Some -- perhaps most -- would argue that the shape of a chart is irrelevant. A chart's history shouldn't dictate its future. Rather, a company's results and prospects are reflected in its stock's movement.The fact is, however, the movement of a marijuana stock shapes the rhetoric about that company as much as it's shaped by the rhetoric. If Cronos stock slips any further, it would become alarmingly easy for the masses to view it as a liability.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Charting CRON StockIt's not difficult to see.After an overheated rally in January and February set the stage for significant profit-taking in March and April, the 200-day moving average line (plotted on the white line on the chart below) began to serve as a technical floor. It's not yet become a pushoff point, though, and it doesn't appear it's going to. Just within the past several days the sellers have tested the pivotal 200-day moving average line as support again, and it's failing to even modestly repel the effort.The 200-day moving average line is regarded by some as the most important of all the trend indicators. It's admittedly simplistic, but still has significant psychological implications because so many traders still see it as a make-or-break level. * 7 Retail Stocks to Buy for the Second Half of 2019 There's modest encouragement in the fact that the weakness since March's high has been on relatively low volume. That suggests there's not necessarily a great deal of conviction behind the selling; investors are just biding their time.Conversely, the fact that the other aforementioned names, like most marijuana stocks of late, are falling is a red flag. Group-wide movement tends to indicate longer-lived, philosophical doubt. Analysts Still in DoubtStill, Cronos Group stock is a standout for all the wrong reasons. Chief among them is the fact that among all cannabis stocks, CRON stock remains one of the analyst community's least favorite.As of the most recent look, analysts collectively rate Cronos at a little less than a Hold … tiptoeing into Sell territory. Rivals New Age Beverages and Canopy Growth, for perspective, are considered a Buy and something that's almost a full Buy, respectively. Hexo (NYSEAMERICAN:HEXO) is also closer to a Buy than a Hold. Click to EnlargeReasons for the pessimism range from lack of clear capital spending plans to a sheer lack of story in an environment where a company's story is a powerful marketing tool. Given that the $1.8 billion investment Altria Group (NYSE:MO) made in CRON stock has now been closed for weeks as well, one would have expected a more definitive direction for a partnership than we've seen yet.More than anything though, analysts still take issue with the stock's crazy valuation.Cronos sports a $4.8 billion market cap, and though revenue of $6.5 million was only a fraction of what the company could be driving in just a few quarters, even the most optimistic of plausible output levels will fall short of justifying that sort of price. It's a reality made even more amazing considering analysts have cared little about other similarly frothy valuations among cannabis stocks. Wait and See on CRON StockIt's certainly possible CRON stock could dig its way out of trouble and use its 200-day moving average line as a launchpad rather than a trigger for more trouble. The stock's yet to break below it. * 10 Stocks to Sell for an Economic Slowdown Those hopes are fading fast though, as the broader realities of the legal marijuana business sink in. The most overvalued names in the business also make for the most susceptible targets. That's Cronos, to be sure.Whatever's in the cards, it's certainly not a time to step into the pot name. Newcomers will want to wait for a little more clarity before doing anything.The world will get a big dose of that clarity in the first half of August, when Cronos will be reporting its Q2 numbers.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy for Less Than Book * 7 Marijuana Stocks With Critical Levels to Watch * The 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond The post Cronos Needs to Show the Market Something to Pull Stock Out of Funk appeared first on InvestorPlace.
With some of the chaos in the Canadian cannabis sector, HEXO (HEXO) stands to benefit due to reasonable growth plans. The uplisting to the NYSE will provide just the catalyst for the stock to gain further visibility in a crowded sector right when standing out should derive the most benefit.Industry Chaos In the span of a week or so, Canopy Growth (CGC) fired its founding CEO and CannTrust (CTST) reported a failed Health Canada audit. The combination suggests some of the flood of dried cannabis set to hit the market in 2019 will not occur.First, Canopy reported an adjusted EBITDA loss for the March quarter and the firing right after the end of the June quarter suggests another bad quarter are in the cards. The implications of his firing are that Constellation Brands (STZ) doesn’t want the largest company in the industry to aggressively build up production capabilities at the cost of margins. One should expect announcements in the next few months that reign in production growth.Second, CannTrust jumped the gun on growing cannabis in five rooms that Health Canada approved in April 2019. The company has 12,700 kg of dried cannabis held for further inspection due to growing in unlicensed rooms. In addition, some cannabis oil in Denmark has popped up as sourced from the unlicensed batches. CannTrust had plans for 75,000 kg of outdoor cannabis this year that isn’t going to hit the market now.The impact is that HEXO has two competitors that aren’t as aggressive anymore.Ramifications for HEXOHEXO has sold off to $5 following a weak quarterly report, but the company remains on track to reach C$400 million in FY20 sales that ends next June. Having both Canopy Growth and CannTrust in chaos helps the pricing power that HEXO needs to reach this aggressive revenue target.With the acquisition of Newstrike Brands, HEXO is ramping up annual production capacity to 150,000 kg. HEXO only harvested 9,804 grams in the last quarter still leaving them to more than triple quarterly supply.A big key here is the company isn’t cutting corners to reach very aggressive production targets like CannTrust. The additional entry into CBD extraction from 200,000 kg of hemp supply in 2020 positions them to enter the U.S. market in a strong way to balance Canadian growth.All while, the stock is uplisting from the NYSE American exchange to the NYSE. While moving to the NYSE American and obtaining an official four-letter stock symbol helped the stock reach new highs, the NYSE will provide much higher visibility for the stock.TakeawayThe key investor takeaway is that HEXO is trading at the lows as the cannabis sector stocks are pulled down into the dumps from some of the bad press from competitors. The logical thought process from investors should be that some of the aggressive growth plans from competitors will get reined in by the market.The best way to play this transition in the industry is to invest with companies like HEXO that aren’t impacted. The company has the ability to grab more market share while facing less pricing pressure making for a good stock pick at the lows.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Read more on HEXO: * Hexo Stock: When the Bulls Aren’t Bullish Enough * A HEXO Bear Says the Stock Has More Room to Fall * Should Cannabis Stock HEXO Be Bought on Weakness? * Analyst Puts the “Hex” on Hexo Stock Ahead of Earnings More recent articles from Smarter Analyst: * Can Curaleaf Stock Keep Going After This Week’s 22% Pop? This Analyst Says Yes * Aurora Cannabis: Worrying Outdoor Shift * Organigram (OGI) Growth Experiment Hits Earnings - Long-Term Narrative Remains Solid * Can Curaleaf Stock Keep Going After This Week’s 22% Pop? This Analyst Says Yes
The former co-CEO of Canopy Growth (NYSE:CGC) has had a lot to say about the cannabis industry since his sudden departure July 8. One of his comments could ultimately benefit Quebec-based Hexo (NYSEAMERICAN:HEXO) and HEXO stock. Here's why.Source: Shutterstock Bruce Linton wasn't shy about his outing from his role of co-CEO at Canada's largest cannabis company. While the company's board attempted to spin the move as a mutual decision, Linton told CNBC that he was in fact fired from the company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips"I think stepping down might not be the right phrase," he told CNBC, referring to the language in the company press release. "I was terminated."Constellation Brands (NYSE:STZ) CEO Bill Newlands suggested that Linton wasn't the right guy to take Canopy Growth to the next phase. Linton's an entrepreneur at heart, so he's probably not wrong to want more of an operational, globally trained business executive, who can take the company to the next level. "Our board was uniform," Newlands said. "We needed a different leader to take us to the next phase of growth."Although Constellation wasn't happy about Canopy's $39 million loss in its most recent quarter, it denies that had anything to do with Linton's ouster. Whatever the reasons, semantics aside, Linton had something interesting to say about the future direction of the global cannabis industry that could really help HEXO stock. * 7 of The Best Schwab ETFs for Low Fees It starts with "United" and ends with "America." Go South Young ManThe fact that Linton quarterbacked the tentative acquisition of Acreage Holdings (OTCMKTS:ACRGF) before he was summarily turfed says all you need to know about where he thinks the big money is in the cannabis industry. He wouldn't have agreed to spend $3.4 billion on a deal for Acreage if he didn't think the U.S. government would legalize cannabis on a federal level within the seven-year limit required by the proposed tie-up between the two companies. Already, Acreage is making plans to buy other U.S. companies in preparation for the eventual merger. Big money lies south of the border and Linton knows it. "Anybody who's dumb enough to launch a new cannabis company in Canada, I don't know what they're doing, they should have been at it six years ago. Canada is done," he told Bloomberg TV. "You're going to end up with a few winners and a whole bunch of people who wonder why they started."You might wonder what this has to do with Hexo and the U.S. market? Cannabis-Infused Drinks a Big Growth AreaThere is absolutely no possible way that Molson Coors (NYSE:TAP) didn't have a plan for south of the border when it entered into a 50/50 joint-venture with Hexo to make cannabis-infused drinks for the Canadian market last August. Hexo's VP of Strategic Development, Jay McMillan, recently stated that Truss, the name of the joint venture, is going to be ready to sell cannabis-infused drinks on Dec. 17, the first day they can be legally sold in Canada. "We'll have a very large supply so we'll be in a good position to be able to meet the demand of the marketplace and at the same time also ensure that we're meeting the variety that the marketplace wants," McMillan said in an interview at the World Cannabis Congress in Saint John, New Brunswick, in June. The joint venture can move production from one type of product to another based on consumer preference. Think of it as the beverage version of "Fast Fashion."More importantly, it's going to give Molson Coors an understanding of consumer preferences in a smaller market before jumping into a much bigger one south of the border. It plans to have CBD-infused beverages in eight states by 2020. However, I wouldn't be surprised if it was readying for the launch of cannabis-infused products the minute the federal government legalizes cannabis. Having worked with Hexo north of the border, I'd be surprised if the joint venture didn't extend to the U.S. over time. * 10 Best ETFs for 2019: The Race for 1 Intensifies With America being a much bigger market, Hexo could be on the precipice of a serious value-enhancement to HEXO stock. The Bottom Line on HEXO StockIf you're unsure about whether HEXO will follow Molson Coors into the U.S. market, you could always buy both stocks to ensure you're capturing any gains both stocks achieve as a result of their participation in cannabis-infused drinks. As an aside, both Canopy Growth and Cronos Group (NASDAQ:CRON) are ideally positioned for the U.S. market given their significant investments from Constellation Brands and Altria (NYSE:MO).Who knows? Molson Coors could end up owning a big piece of Hexo in the future. Only time will tell.At the time of this writing, Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell for an Economic Slowdown * 7 Marijuana Penny Stocks That I May Buy * 7 of The Best Schwab ETFs for Low Fees The post Why Hexo Stock Is a Promising Buy Now appeared first on InvestorPlace.
HEXO Corp (NYSE: HEXO ) (TSX:HEXO) announced Thursday it has gained approval from the New York Stock Exchange to transfer the listing of its common shares to NYSE from NYSE American LLC. The company expects ...
Canadian cannabis company Hexo Corp. is transferring its stock market listing to the New York Stock Exchange from the smaller NYSE American exchange effective start of trade July 16. The shares will retain their current ticker symbol, "HEXO," and will continue to trade on the Toronto Stock Exchange. Hexo shares were not yet active premarket, but have gained 48% in 2019, while the S&P 500 has gained 19%.
NYSE-A: HEXO) is pleased to announce it has received approval from the New York Stock Exchange (the “NYSE”) to transfer the listing of its common shares from the NYSE American LLC (the “NYSE-A”) to the NYSE. HEXO expects to begin trading on the NYSE effective at the open of markets on July 16, 2019.
Investors that enjoy cannabis investing via the ETF wrapper rejoice: you've got another marijuana ETF to consider. On Tuesday, the aptly named Cannabis ETF (NYSEARCA:THCX) came to market.Source: Shutterstock The new cannabis ETF's issuer, Innovation Shares, frames the rookie marijuana fund as the "first passively managed pure-play ETF solution for investing in cannabis." THCX is the third cannabis ETF to hit U.S. exchanges. The $1.1 billion ETFMG Alternative Harvest ETF (NYSEARCA:MJ) is the seasoned veteran among domestic cannabis ETFs.New competition to MJ arrived in April when the actively managed AdvisorShares Pure Cannabis ETF (NYSEARCA:YOLO) launched. Today, YOLO has around $60 million in assets under management, making it one of the more successful stories among 2019's crop of new thematic ETFs.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * The S&P 500's 5 Best Highest-Yielding Dividend Stocks "As a pure-play cannabis ETF, THCX focuses on companies in the legal marijuana, CBD and hemp industries -- the portfolio does not rely on alcohol or tobacco stocks to provide exposure to this burgeoning global growth story," said Innovation Shares Managing Director Matt Markiewicz in a statement. The New Cannabis ETF's HoldingsThe new cannabis ETF tracks the Innovation Labs Cannabis Index, a rules-based benchmark that rebalances monthly. Home to 36 stocks, the cap-weighted index has a combined market capitalization of about $80 billion and features 19 licensed Canadian producers and 19 US-listed weed stocks, according to issuer data.Index components include some more obscure fare, such as The Green Organic Dutchman Holdings Ltd. (OTC:TGODF) and Toronto-listed OrganiGram Holdings Inc. (TSXV:OGI.V). Well-known cannabis names in the benchmark include Aurora Cannabis (NYSE:ACB), Canopy Growth (NYSE:CGC) and HEXO Corp (NYSE:HEXO), a beaten up Canadian cannabis name."The index currently consists of 35 stocks that are expected to benefit from the rise in value of the global cannabis market which is estimated to reach $630 billion by 2040," according to the index provider.Combined, THCX's aforementioned rivals, MJ and YOLO, have almost $1.2 billion in assets under management. That number does not necessarily jibe with investor demand for a marijuana ETF or interest in the cannabis investment theme. However, that theme is still in its early innings, many cannabis stocks are volatile, plenty are not profitable and some investors are simply waiting for the group's real leaders to emerge while the more financially challenged names peter out.While a myriad of challenges face cannabis stocks and their investors, scores of data and fundamental factors bode well for the long-term trajectory of the industry, potentially paving the way for more acceptance and assets of cannabis ETFs."With several regulatory catalysts on the horizon in the U.S. and abroad, the current cannabis environment presents an exciting opportunity for investors," said Markiewicz. "One area which has witnessed explosive growth since the signing of last year's U.S. Farm Bill is the hemp-derived CBD industry. Several of the companies in the portfolio are actively participating in this CBD boom by cultivating hemp, providing extraction services or by using CBD for applications in the pharmaceutical, health and consumer wellness markets." The Bottom Line on THCXMany new ETFs, regardless of underlying investment objective, struggle. And it is clear THCX entered as still small, but highly competitive arena. That said, the new cannabis ETF has something on its side: a low fee. Sort of."Sort of" because the rookie cannabis ETF charges 0.70%, per year, or $70 on a $10,000 investment. That is not cheap in ETF terms, but it is expensive relative to the 0.75% charged by MJ and YOLO's annual expense ratio of 0.74%. * 7 Retail Stocks to Buy for the Second Half of 2019 At the very least, THCX's low fee is likely to catch a few eyes among investors comparing the cannabis ETFs and that should be good to get some capital flowing into the fund.Todd Shriber does not own any of the aforementioned securities.The post The New Cannabis ETF Is the Market's Cheapest Marijuana Fund appeared first on InvestorPlace.
Among the major cannabis plays, Canada's Aurora Cannabis (NYSE:ACB) has mostly gone its own way. Rivals Canopy Growth (NYSE:CGC) and Cronos (NASDAQ:CRON) have sold billions of dollars' worth of stock for cash to fund their growth. Aurora, instead, has used ACB stock to buy smaller companies. It has issued over 1 billion shares of Aurora Cannabis stock in the last few years.Source: Aurora Cannabis The good news with that strategy is that Aurora may have the broadest reach of any cannabis play. Per a recent investor presentation, Aurora is active in 24 countries across five continents. This is true from a product standpoint as well: Aurora offers not just cannabis flower but softgels, edibles, and CBD (cannbidiol) products.It's an intriguing strategy -- one with huge risk and huge reward, as I wrote earlier this year. The steady issuance of ACB stock has diluted shareholders. This means Aurora needs huge profits in order to post reasonable earnings per share (EPS). The company is expected to generate about U.S. $552 million in revenue next year; it would need over U.S. $1 billion in earnings to get its EPS over $1.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOf course, that type of growth is more likely for a diversified operator. But to achieve that growth, Aurora stock needs help in one key area. It needs marijuana legalization to move beyond Canada and a few smaller markets -- and it needs that to happen relatively quickly. The Market Risk to ACB StockIt would seem like producers have several markets in which to sell cannabis as possession of marijuana is legalized or decriminalized in areas around the world.But production is a different matter. Even in the Netherlands, which has been a destination for marijuana users for some time, growing marijuana is illegal. At the moment, only Canada and Uruguay offer truly legal opportunities for companies like Aurora. * 7 F-Rated Stocks to Sell for Summer The problem is that those two markets aren't enough. There are hundreds of companies in Canada trying to get a piece of what Aurora itself has estimated at just a CAD $12 billion market. The medical market is pegged at CAD $3 billion, and the consumer market at CAD $9 billion.Even adding in medical opportunities in countries like Germany, the problem holds. There are too many companies, too much supply, chasing too few buyers. As we have seen in U.S. markets like Oregon and Colorado, that leads to plunging prices, thin margins, and likely a lower ACB stock price. Markets Really Matter to Aurora Cannabis StockFor most marijuana plays, Canada alone isn't enough. But smaller plays like Hexo (NYSEAMERICAN:HEXO) can manage better in a single market. So can a company like Charlotte's Web (OTCMKTS:CWBHF), whose CBD focus allows it to drive sales in the U.S. and elsewhere.In contrast, Aurora's strategy is based on becoming a major worldwide player. That's why it continues to build its production capacity, rivaling Canopy for the biggest in the world. That is also why it has acquired so many businesses in far-flung destinations like Uruguay, where it made a $290 million acquisition last year.In many cases, Aurora's initial aims are to penetrate the medical side of the market -- and it appears to be building leadership in that category (their competitor, Canopy, has seen its medical sales decline of late).But the bull case for Aurora, as it heads toward a whopping 1 million kilos of capacity, requires the demand match that production. That means recreational legalization on the producer side -- not just decriminalization. Is That a Worry for ACB?It looks like a risk from here. Unlike Canopy, who has a deal to enter the U.S. market, Aurora has no U.S. presence yet. Its growth will rely at least in part on legalization in Europe, Latin America, and the Oceania region.The news in those areas is mixed. Movement in Europe has been slow in part because the continent lacks ballot initiatives. The impact of that absence can be seen in the U.S., where legalization has moved by direct democracy, with politicians reluctant to embrace legalization beyond medicinal use.Spain is a candidate for legalization, however, and Belgium may head in the same direction. Still, European movement overall seems like it will be slow.In Latin America, Mexico may well see legalization after a recent Supreme Court decision. (Aurora has a presence in that market.) Outside of that country, however, there are reasons for caution. Brazil, led by conservative President Jair Bolsonaro, almost certainly will not pass legalization. Smaller countries have moved toward decriminalization -- but not outright legalization of production, particularly in scale.New Zealand has a referendum on the way in 2020 that could open that market. Progress in Australia has stalled out, however.Over time, marijuana will likely gain acceptance. But for Aurora Cannabis stock, the definition of "over time" is exceedingly important.It still trades at about 14.4x fiscal 2020 sales forecast of $552 million. Growth from there may depend on how many new markets open for the company, particularly on the recreational side. If the pace of opening disappoints, ACB likely will too. If marijuana legalization gains steam worldwide, however, there isn't a company better-positioned. Investors should place their bets accordingly.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post Global Legalization Will Determine the Fate of Aurora Stock appeared first on InvestorPlace.
There's no denying that investing in marijuana stocks is one of the hottest trends in the entire market. With commercial legalization around the corner, many marijuana stocks are partnering with big names in the consumer world to bring forth new commercial and medical cannabis products. Canopy Growth's (NYSE:CGC) partnership with spirit maker Constellation Brands (NYSE:STZ) was perhaps the most famous and largest of these deals.However, CGC and STZ aren't the only ones that have caught cannabis fever.There are now several other big consumer firms looking at marijuana stocks for inspiration. As we have said before, these multinational firms are a safer bet on the growth of cannabis than individual marijuana stocks. After all, their diverse product lines can provide safety from the volatility of the sector. They will still benefit from the growth and sales of cannabis-related products.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAt the end of the day, it's a win-win for investors. * The Top 10 Best Sectors in the Market for 2019 With that, here are three consumer stocks hitching a ride to rising cannabis demand. Mondelez International Inc (MDLZ)Source: Shutterstock We already mentioned how Mondelez International's (NASDAQ:MDLZ) portfolio of snack foods, cookies, and candy is a bit on the boring side. Top brands like Nabisco and Cadbury produce plenty of stable cash flows, profits, and sales for MDLZ. And thanks to their discretionary nature, the firm has been able to pass on price increases with relative ease.But that huge stable of brands could mean plenty of pin-action and growth as MDLZ pivots to adding cannabis to its products. During its last earnings call, Mondelez CEO Dirk Van de Put mentioned that the firm was looking into adding CBD-infused snacks to their product line.Mondelez has been working hard to expand into a variety of natural, organic and healthy snack foods. These healthy snacks come with higher margins and are one of the reasons why MDLZ has seen revenues tick higher in recent quarters. Cannabis would be a natural fit to this. Given that consumers already trust and recognize its portfolio of top brands, they could be more willing to try a Nabisco-branded CBD snack than some other unknown brand. This gives the firm an edge in actually getting people to buy cannabidiol-infused foods.While MDLZ hasn't partnered with any marijuana stocks just yet, it will be ready to make the plunge sooner rather than later, which could be great for investors. Molson Coors (TAP)Source: Drew Stephens via FlickrConstellation Brands is not the only spirit maker looking at marijuana stocks. Brewing giant Molson Coors Brewing (NYSE:TAP) has caught the cannabis bug as well. And TAP is going full-bore into the sector.Late last year, Molson Coors partnered with Quebec-based Hydropothecary Corporation (NYSEAMERICAN:HEXO). The duo formed a joint venture -- dubbed Truss -- that will primarily focus on non-alcoholic, cannabis-infused beverages.Canada has already legalized marijuana and cannabis-infused beverages will be available in the country at the end of 2019. For Molson Coors, this is a big opportunity. The firm's size gives it a huge edge in Canada right from the get-go: TAP estimates that this drink market could be worth about $3 billion in annual sales.Molson Coors will be able to score a high percentage of much-needed revenues.In the U.S., analysis from investment bank Cowen determined that states with legal cannabis binge-drink 13% fewer times per month than non-cannabis states. The idea is that TAP can pick up revenues in Canada and then add additional revenues here in the U.S. when cannabis becomes fully legal. * 7 Restaurant Stocks to Put on Your Plate For investors, TAP stock could be a sure thing. It already has a big foothold in key markets and should be able to boost its fortunes with its marijuana stock deal. Diageo (DEO)Source: Mustafa Khayat Via FlickrJohnnie Walker, Smirnoff, Captain Morgan, and Guinness have served Diageo (NYSE:DEO) well over the years. These top booze brands -- along with the rest of DEO's massive staple of spirits -- have continued to rack up billions in annual sales. And they are about to get even better.DEO hasn't been shy about its intentions to add cannabis to their lineup of brands. Around this time last summer, BNN Bloomberg reported that Diageo was conducting talks with several different marijuana stocks for partnerships. A deal hasn't been reached yet, but it could happen soon.For one thing, pot stock Aphria's (NYSE:APHA) chief commercial officer, Jakob Ripshtein, was formerly the chief financial officer of Diageo North America and president of Diageo Canada. Meanwhile, spirit sales have slowed in North America over the last year. This provides plenty of impetus to get a deal done.DEO's brand range includes 14 of the top 100 premium distilled spirits brands and seven of the top 20 premium spirits brands worldwide. Like TAP and MDLZ, this huge portfolio gives Diageo a significant edge in getting consumers to actually try CBD-infused products in the first place. The best part is that these DEO brands are consumed globally. Its moves today could make it the global leader in marijuana sales.Meanwhile, investors can score a respectable dividend of 2% while they wait.At the time of writing, Aaron Levitt did not hold a position in any stock mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post 3 Consumer Stocks Loading up on Marijuana appeared first on InvestorPlace.
Being a Tilray (NASDAQ:TLRY) shareholder hasn't been easy or fun in a long while. Sure, TLRY shares soared out of the gate following its initial public offering (IPO) from nearly a year ago. However, the cannabis firm's equity has been in a decided downtrend since its peak in September.Source: Shutterstock All told, Tilray stock is down more than 30% year-to-date, and is off more than 80% since September's high. That was right before Canada legalized recreational use of marijuana.(Almost) needless to say, the company failed to live up to the hype.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 F-Rated Stocks to Sell for Summer However, some good Tilray news is coming for investors who've held onto their position despite the pullback. Even better, anyone who's kept TLRY on their watchlist but not yet added it to their portfolio may benefit significantly. A solid second act is on the horizon, and it's about to begin. A Looming SlowdownIt would be naive to pretend marijuana-mania didn't get the better of many investors last year. Between the major stake Constellation Brands (NYSE:STZ) took in Canopy Growth (NYSE:CGC) and the self-serving noisemaking several startups initiated, it was easy to dive in.As it turns out though, the cannabis business is just like any other. An organization can't spend haphazardly in the name of growth. Competition does drive prices down. And fiscal success takes far longer than many startups advertise.Most marijuana stocks have suffered to various degrees on the recognition of those realities, though Tilray stock especially so. And we have the one-year anniversary of Canada's recreational legalization in sight, which brings up an uncomfortable point: it's conceivable that the one major growth driver TLRY has leveraged won't be a big growth driver much longer.Indeed, rival Hexo (NYSEAMERICAN:HEXO) reported a sequential decline in last quarter's total revenue. It also disclosed only a modest 9% increase in recreational sales at a time when that usage should still be ramping up. Other pot players still seem to be growing at least this segment of their business.But one can't help but wonder if Hexo simply was the first to run into a growth wall on the recreational front. If so, the markets may well upend Tilray stock again in August. That's when management next posts their quarterly numbers.The company's been quietly building a growth engine to replace the one that will weaken once the one-year anniversary of Canada's legalization arrives and the year-over-year comparisons fade. Sweet Spot in the U.K.Late-last month, reports surfaced of a seemingly boilerplate event. Tilray, in short, has delivered a bulk supply of cannabis-based, orally administered medicines to the U.K. With no clarification on what "bulk" meant, investors could analyze only little. Despite lacking details, it's no small matter for Tilray stock.The U.K.'s cannabis landscape is complicated. Europe's pharmaceutical regulators have generally been more open-minded than their North American counterparts. However, regarding cannabis, the U.K. has proven oddly regressive.That's changing though. Lawmakers there legalized medicinal cannabis in November. That inspired the development of a small number of cannabis-specific clinics meant to treat people which chronic conditions. A couple more are in the works.By and large though, the U.K.'s cannabis market remains immature. Plus, lukewarm support from caregivers is unlikely to break through the nation's still tricky cannabidiol (CBD) and THC rules. However, this situation provides an opportunity for TLRY to establish its presence.The clincher: Although it's now legal to sell CBD products in Britain, it's not legal to manufacture them there. The only way U.K. consumers and caregivers can get their hands on them is with a specific import license. Subsequently, TLRY has it, boosting prospects for Tilray stock.The U.K. is, ironically enough, one of the largest legal cannabis producers on the planet despite the illegality of making CBD products there; the bulk of it was exported. If something could be done with it at home though, such a development could fuel economic growth. As attitudes change, such a shift becomes likely.Change takes time though, which leaves the window of opportunity open right now for a company like Tilray, which is already capable of meeting the need. Looking Ahead for TLRYFor perspective, consultant Prohibition Partners believes Europe's cannabis market will be worth more than $100 billion by 2028. Geremy Thomas, who serves as CEO of the U.K.'s Sativa Investments, recently commented:I do think that the UK medicinal cannabis market will end up being the largest in Europe, which in turn will significantly compete with, if not dwarf, what we've seen in North America.Tilray is well-positioned to plug into that mostly underserved market. For better or worse, they'll operate under the watchful eye of regulators that tend to be slow to change.In other words, imported medical cannabis products may be just enough of a solution to sate the U.K.'s forward-thinking doctors and patients, negating any need or desire to make such medicines there. That sets the stage for a solid second act from TLRY in the near future as Canada's recreational sales decelerate.Such proof of life can't come fast enough for anyone waiting on Tilray stock to recover.As of this writing, James Brumley held no 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 * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post Tilray Prepares a Second Act That Could Rekindle TLRY Stock appeared first on InvestorPlace.
Last month, Bank of America analyst Christopher Carey upgraded Cronos Group (NASDAQ:CRON) from an underperform rating to a buy, sending CRON stock 11% higher on the news. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsSince Carey's June 4 upgrade of Cronos stock, it's gone sideways, finishing the month of June at $15.98, a penny less than where it traded after the single-day good news surge.More critical than Carey's buy rating was his 54% increase in the 12-month price target of CRON stock to $20 from $13. At current levels, we're talking about 27% upside over the next year. In previous articles, I've suggested that Cronos Group stock, along with Canopy Growth (NYSE:CGC) and Hexo (NYSEAMERICAN:HEXO) are the three best Canadian cannabis investments. In recent weeks, I've also begun to take a shine to both Aurora Cannabis (NYSE:ACB) and Tilray (NASDAQ:TLRY). So, it's good to know that at least one analyst believes Cronos Group is worthy of a higher share price. According to The Wall Street Journal, only two analysts have a buy or overweight rating on CRON stock. The other 12 either rate it a hold or worse. Not to worry. Here are three reasons Cronos Group looks like a buy. Altria Knows a Thing or TwoHave you seen those Farmers Insurance ads where actor J.K. Simmons says, "We know a thing or two because we've seen a thing or two?" They're memorable spots. * The 7 Top Small-Cap Stocks Of 2019 Well, the day last December that Altria (NYSE:MO) announced that it would invest $1.8 billion in Cronos for 45% of the company with an option to buy another 10% at $19 a share, I just knew the Toronto-based cannabis company was about to go global in a big way. As a result of Altria's involvement, I've gone as far as recommending risk-averse investors buy MO instead of CRON so you can get paid an excellent 6.6% dividend yield while you wait for its cannabis business to mature. How many cannabis companies are going to pay you a 6.6% dividend yield while their pathways to profitability appear? Zero. As Carey said himself in his upgrade, Cronos Group is going to be a vastly different company in the next few years; Altria's expertise in crop science, distribution, etc., is going to have a lot to do with that change. A Ton of CashCronos currently has a market cap of $5.37 billion. In the first quarter, it closed the Altria investment. At the end of March, the pot producer had $1.8 billion in cash on the balance sheet. It's trading at less than three times cash. By comparison, Canopy Growth is trading at 4.1x its $3.4 billion cash and Hexo is trading at 7.5x its $133.0 million. At least by this valuation metric, Cronos is the cheapest of my three favorite Canadian cannabis stocks. However, more important than the cash it's gotten from Altria is the ability to develop new products using Altria's long history of extending brands to generate higher revenues. Altria has had to operate within the confines of a very regulated industry with strict laws about advertising to children, etc. If anyone can understand and maneuver through the regulatory hurdles surrounding cannabis, Altria can. To me, that's worth a lot more than $1.8 billion in cash. Sure, you can hire experts who can assist in these areas, but it's helpful to have a partner that can write a big check if necessary. I'm not suggesting that Cronos needs any more cash at this point, but it never hurts to know it's available if need be. The Derivatives MarketIn mid-May, Cronos announced that it had entered into a multi-year supply agreement with Medipharm Labs (OTCMKTS:MEDIF). The agreement would see Medipharm supply Cronos with $30 million of high-quality private label cannabis concentrate over the next 18 months and possibly an additional $30 million over the next 24 months. * 7 F-Rated Stocks to Sell for Summer What a lot of Americans might not realize is that Medipharm is based in Barrie, Ontario, less than 20 miles from Cronos' largest grow facilities in Stayner, Ontario. Having this kind of access to quality concentrates will help it keep on top of demand once products are legally available in December and into 2020Also, Cronos will supply bulk cannabis to Medipharm's state of the art extraction facilities to meet some additional processing needs of the company. Click to Enlarge"As the industry develops and matures, we see opportunity to work with companies like MediPharm Labs that provide specialized, high-quality services and inputs for our products," said Mike Gorenstein, CEO of Cronos Group. "Along with our internal capabilities, we are pleased to be working with MediPharm Labs to bring great products to consumers in anticipation of the derivative market launching in Canada this fall."While derivative products such as concentrate, edibles, and infused products will be legalized in Canada on the first anniversary of the October 17, 2018 cannabis legalization there, companies have to give the Canadian federal government 60 days notice before selling new products, which puts the availability date into December at the earliest. Working closely with MediPharm, Cronos ought to be able to capture a chunk of the Canadian derivatives market. Owners of CRON stock should look forward to this relationship delivering revenue growth in 2020 and beyond. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 F-Rated Stocks to Sell for Summer * 7 Stocks to Buy for the Same Price as Beyond Meat * 7 Penny Marijuana Stocks That Are NOT Cheap Stocks The post 3 Reasons Cronos Group Stock Deserves A Buy Rating appeared first on InvestorPlace.
In the past 12 months, small cap stocks did not perform well. All in all, the S&P SmallCap 600 lost 9% of its value (for the sake of comparison, the S&P 500 was able to climb by 10%). Microcaps have encountered greater difficulties and declined by 22%.True, as data shows, small stocks tend to be volatile, but they have their merits. They are relatively cheap to buy, and they have great potential for growth. The following three stocks shouldn’t be left unnoticed by investors as they provide excellent opportunities for future returns. Upwork – A New Concept of WorkMost people today follow a conventional work pattern. They wake up early in the morning, commute to work and return home in the evening. Upwork (NASDAQ:UPWK) strives to change that. It has built an online platform where freelancers working from home at their own free time offer their services to individuals or companies seeking different types of products from content and programming to financial or legal counseling. This new type of flexible work, referred to as the "gig economy", is still in its infancy in the United States with a market cap of a little more than $1.5 billion, but it is expected to rise exponentially in the future. Upwork is leading the way. Since is public debut in the autumn of 2018, Upwork stock lost 25% of its value. As alarming as this may sound, the stock has great potential. So far, Upwork has not been profitable, but there is room for optimism. In 2019 Q1, its revenue went higher by 16% year over year to $68.9 million. The analysts show the company’s stock ungrudging courtesy. On June 26, Brent Hill from Jefferies upgraded it from hold to buy with a price target of $23 from real price value of $15. Average analysts’ price target stands at $22.75 (43% upside ). This positive assessment is derived from Upwork’s growth potential in the freelance market. Analyst Ratings & Price Targets on Upwork Inc HEXO – Cannabis for Fun and HealingHEXO Corp (TSE:HEXO) is a Canadian company that produces and distributes cannabis for medical and recreational uses in the Canada. It deploys innovative cannabinoid isolation technology with its 1.8 million sq. ft of facilities located in Quebec, Ontario and Greece (indicating the company’s intentions to penetrate the Eurozone). HEXO’s production stood at 9,804 kilos in Q1 2019, nearly 100% higher quarter over quarter. Production forecast for fiscal 2020 issued by the company’s management revolves around 150,000 kilos, which is expected to increase annual revenues from approximately C$64 million at present to a whopping $400 million. Wall Street analysts are fully aware of HEXO’s potential. Russel Stanley from Beacon reiterated his buy recommendation for the company on June 13 setting a 12-month target price of $14 with a particularly big upside of 111 %. On June 12, the company released its third quarter fiscal 2019 (July 31 fiscal year end) financials showing gross and net revenue of $15.9 million and $13.0 million, respectively. Both were ahead of Stanley’s forecast of $12.3 million and $10.2 million, respectively.Having said that, one should bear in mind that high profit potential also entails risk. Owen Bennett from Jefferies has recently reiterated his assessment of the company’s stock to sell. He is concerned about HEXO’s earnings latest earnings release for the quarter ending January 31. The company reported a quarterly GAAP net loss of C$4.33 million. In comparison, last year the company had a GAAP net loss of C$1.97 million. This calls for a bit of caution before deciding to invest.Analyst Ratings & Price Targets on HEXO Corporation Inseego – Investing in a Breakthrough Technology5G technology is almost here and Inseego (NASDAQ:INSG) positions itself to be at its forefront by upgrading its already existing 4G cloud and networking solutions to the new generation. Despite currently being unprofitable, analysts expect the company to increase its annual revenues by 20% in the next 5 years. If that happens, its stock will most likely soar by around 80 % above its current price ($4.27 as of June 27).Michael Latimore from Northland Securities has recently reiterated his buy recommendation for the stock setting a price target of $6 (current stock value as of June 27 stands at $4.29) with an upside of 39.86%. In the last 3 months, Inseego insiders bought the company shares at a total worth $10.64 million and that is a good sign.Analyst Ratings & Price Targets on Inseego Corp What’s the Bottom Line?Some small cap stocks have great profit potential and it is crucial to be able to identify them. But as shown above, the greater the prospects for profit, the greater the risk. One of the major disadvantages of small stocks is their tendency to be volatile. Therefore, it is highly advised to closely monitor their performances over time, go over analysts’ assessments and, most of all, always stay alert to new developments that may change the overall picture. * * *
Investors need to pay close attention to HEXO Corp. (HEXO) stock based on the movements in the options market lately.
Cannabis stocks were mostly lower on Tuesday, as the broader markets faltered and investors awaited the next key catalysts for the sector.