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|Day's Range||6.77 - 7.01|
|52 Week Range||4.39 - 17.47|
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Cannabis investors are hoping that 2020 will bring more clarity to marijuana stocks. After rising to record high levels in 2018, cannabis stock prices went down in a puff of smoke. One of the primary problems for cannabis stocks was a lack of profitability. Investors saw that making marijuana legal was only part of the battle. Canadian regulators have been slow to approve retail store licenses, creating a supply-demand imbalance.Source: Shutterstock With that said, Aphria (NYSE:APHA) stock has stood out for good reasons. Aphria has shown a profit where other cannabis stocks have failed. In 2019, APHA stock price fell "only" 17%. In context, the Horizons Marijuana Life Sciences ETF (OTCMKTS:HMLSF) dropped 39% for the year.The question that many investors have is whether or not Aphria can generate actual sales that will help justify the company's 2020 price targets.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Balance Sheet Sheds Suspicion on Those Positive EarningsAphria has turned a profit in its last two quarters. However, a closer look at the company's balance sheet shows that the profit was due to a surge in non-operating income. The problem with non-operating income is that it can be a fickle beast. And without the non-operating income, Aphria would not be profitable. * 7 Stocks to Buy for January and Beyond Another problem for Aphria is the way they estimate the value of their crops on a quarterly basis. Additionally, APHA must estimate the projected cost to sell those goods. The result is a positive fair-value adjustment that doesn't reflect how well (or in this case poorly) the actual performance of the company's business was. Mark Hake took a much closer look at Aphria's balance sheet and came to a bearish conclusion.Now to be fair, this is not an issue that is unique to Aphria. The International Financial Reporting Standards for Canadian stocks sets the standard. However, the takeaway is that Aphria would not be profitable on an operating basis if those costs are stripped away. Will APHA Be a Victim of Its Own Forecasts?The other problem for APHA is that they have forecasted strong earnings. In its most recent earnings call, Aphria said it was expecting net revenue for fiscal 2020 of between 650 million CAD and 750 million CAD. The quarter that ended was Aphria's first quarter of the 2020 fiscal year. With net revenue of approximately 126 million CAD, the company was less than 20% towards the low end of that forecast.So, what do analysts project for the current quarter? The good news is that the consensus estimate is for revenue of 130 million CAD. The bad news is that number is well short of the 200 million CAD that Aphria needs to put them at about the halfway mark of the low end of its forecast. Aphria Does Not Need Any More Poor HeadlinesAphria drew the ire of investors due to allegations of wrongdoing in how it acquired Latin American assets. As I wrote back in October, an independent committee (formed by Aphria's board) found many of the allegations to be untrue. But the resulting conflicts of interest led to the resignation of former CEO Vic Neufeld.If this was the company's first offense it would be damaging. However, with it being a second offense, the company is skating on thin ice. Aphria is going to have a hard time meeting the revenue expectations that it has set. What Should Investors Do with Aphria Stock?Whenever I see a stock with the potential for a range of outcomes, I have to call it a hold. And that's what I see with Aphria. The cannabis industry should have a better 2020 simply because most of the frothiness has been wrung out of the stocks. But as investors begin to look at these stocks based on their merits, what will they see?In the case of Aphria, they have bought some time due to perfectly legal but unsustainable accounting measures. The company has yet to show the cash burn of its competitors. But it has already taken a 50 million CAD write-down on the previously mentioned Latin American transactions. And that is confirming the suspicion that Aphria overpaid for those assets. This means more write-downs, and share dilution, is likely.All things considered, 2020 is the year many cannabis companies must begin to prove their case to investors. Until they do, investors can hit the pause button on Aphria.As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Stocks to Buy for January and Beyond * 7 Excellent Value Stocks to Buy for 2020 * 5 Hot Housing Stocks That Could Stay Hot in 2020 The post Aphria Stock Has Work to Do to Maintain the Trust of Investors appeared first on InvestorPlace.
Akerna Corp. (Nasdaq:KERN), a leading cannabis compliance technology provider and developer of the cannabis industry’s first seed-to-sale enterprise resource planning (ERP) software technology (MJ Platform®), today announced its addition to the holdings of the world’s largest suite of cannabis exchange traded funds, including the Horizons Marijuana Life Sciences Index ETF ("HMMJ":TSX), and the Horizons US Marijuana Index ETF ("HMUS":NEO). Jason Assad, Akerna’s newly named Director of Investor Relations stated, “We are pleased to have been added to the world’s largest marijuana ETF, in the company of other fellow leaders and innovators in the cannabis industry.
CALGARY, Aug. 27, 2019 /PRNewswire/ - Sundial Growers Inc. (Nasdaq:SNDL) ("Sundial" or the "Company") is pleased to announce that the Company has been added to the portfolio of the Horizons Marijuana Life Sciences Index ETF (HMMJ.TO) ("HMMJ"). This follows the addition of Sundial to the North American Marijuana Index (the "Index"), the underlying index of HMMJ. "Becoming a member of the Horizons Marijuana Life Sciences Index ETF is an important milestone as a leading, international cannabis company," said Torsten Kuenzlen, Chief Executive Officer.
EnWave Corporation (TSX-V:ENW | FSE:E4U) (“EnWave”, or the “Company”) reports today that it has been added to The Cannabis ETF (NYSE:THCX) (“THCX”) which trades on the New York Stock Exchange. THCX follows the Innovation Labs Cannabis Index, which is a portfolio of 35 holdings expected to benefit from growth of the legal marijuana, CBD and hemp industries. EnWave currently has three royalty-bearing commercial license agreements with Canadian cannabis companies and one royalty-bearing commercial license agreement with a hemp producer in the United States.
On Tuesday, the US Senate held a hearing on the SAFE (Secure and Fair Enforcement) Banking Act. The act will need to pass the Senate before it is sent to the US president. If passed, the act would greatly help US cannabis businesses.
YOLO.Source: Shutterstock That acronym for "you only live once" is now an official word in the English language. Texters and social media posters used it so much that it was added to the Oxford English Dictionary three years ago.I must say, I got a chuckle out of the definition. According to the dictionary, YOLO expresses "the view that one should make the most of the present moment without worrying about the future, and [is] often used as a rationale for impulsive or reckless behavior."InvestorPlace - Stock Market News, Stock Advice & Trading TipsLeave it to the dictionary to take all the fun out of it.Believe me, I'm all for making the most of the present, but I don't believe we should have a carefree attitude about the future. Especially when it comes to retirement. We need to prepare for it. And when it comes to your financial future, you definitely do not want impulsive or reckless behavior.That's especially true when investing in marijuana stocks, which are unquestionably one of the best investment opportunities of our lifetimes. You can get really burned if you're impulsive or reckless.I bring this up because YOLO is actually a ticker symbol for a recent marijuana-related exchange-traded fund (ETF) called the AdvisorShares Pure Cannabis ETF, which debuted in April.As legalization spreads and the industry grows, cannabis ETFs are in the midst of their own marijuana craze. In just the last couple of weeks, three new funds have started trading or announced that they are about to: The Cannabis ETF (THCX), Amplify Seymour Cannabis ETF (CNBS), and Cambria Marijuana ETF (TOKE).I must say, YOLO and TOKE win the best symbols award … at least for now.These new funds have a long way to go to catch up with the leaders. ETFMG Alternative Harvest ETF (MJ) has $1.15 billion in net assets, while Horizons Marijuana Life Sciences Index ETF (HMMJ) is next with $788 million.I get asked all of the time about marijuana ETFs, especially from people who are new to investing. Marijuana's huge potential has attracted folks with less investing experience, so I created a special five-part video series "masterclass" on marijuana investing to show them how to get started and answer a lot of these kinds of questions.So are ETFs good for marijuana investing?Yes.And no.I know that doesn't sound very helpful, so let me explain what I mean. Get the Best of Both WorldsInvesting in a marijuana ETF is better than not investing in marijuana at all. If that's what makes you comfortable, you should do it. I'd rather see you get at least some exposure to this incredible opportunity. At the moment, I like both the established Alternative Harvest ETF and YOLO, but the others are worth watching.On the other hand, there is a better way to get all of the benefits of an ETF but make more money. You basically build your own smart ETF, a strategy we use often in my investing services.Most ETFs hold dozens or even hundreds of different companies. They can give you diversified exposure to a sector or country, and they can be very useful investment vehicles.However, because ETFs hold so many stocks, a buyer is virtually guaranteed to end up owning a lot of average companies -- and even some crappy ones. You have to take the bad with the good. You can't separate them.But you can with your own ETF. By purchasing a handful of the best companies, you avoid owning the weak players. This gives you big upside potential while still providing you with diversification.It's a smart way to invest in big themes like marijuana. You get an excellent balance of risk and reward.It's not always possible to buy a basket in a sector. Sometimes, there aren't many good individual companies trading at good prices in a sector at the same time.That's not the case with marijuana. The exploding industry is perfect for creating your own ETF.There are bigger companies and smaller companies. Companies that grow marijuana. Companies that extract oils. Companies that own retail shops. Companies that recently went public. Companies jumping from small stock exchanges to big stock exchanges. Medical marijuana companies. Even marijuana software companies.There are so many good cannabis opportunities that you should own enough stocks to build your own ETF anyway.I find this approach helps investors who are leery of investing in marijuana or new to investing. Do me a favor and think about it.Legal marijuana is slated to skyrocket from less than $10 billion today, into a $100 BILLION juggernaut. That makes it easily the biggest investment opportunity over the next few years. If you learn nothing else from me, I hope you will at least look into this once-in-a-generation opportunity. And if you need help getting started, just let me know.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Buy From This Superstar Fund * 7 Stocks to Buy This Summer Earnings Season * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk The post Marijuana Stocks: How to Start Investing in Pot's Explosive Growth appeared first on InvestorPlace.