|Bid||42.16 x 4000|
|Ask||42.25 x 1800|
|Day's Range||41.97 - 43.51|
|52 Week Range||41.97 - 66.04|
|Beta (3Y Monthly)||0.38|
|PE Ratio (TTM)||12.54|
|Earnings Date||Oct 31, 2019|
|Forward Dividend & Yield||3.36 (7.56%)|
|1y Target Est||55.57|
The White House announced that due to number of deaths believed to be linked to vaping, they’re considering a ban on flavored e-cigarettes. Yahoo Finance’s Zack Guzman, Jessica Smith and Sibile Marcellus discuss with BigEyedWish Founder Ian Wishingrad.
Cronos Group (NASDAQ:CRON) stock fell 5.2% on Sept. 9 as a result of investors' concerns about the cannabis company's focus on vaping products. Those offerings have come under severe scrutiny in recent weeks, due to the death of six people from lung disease related to their use. Source: Shutterstock InvestorPlace - Stock Market News, Stock Advice & Trading TipsCronos isn't the only cannabis company to have a vested interest in the success of vaping pens, but at the moment, it appears to be the biggest player taking it on the chin as a result of the recent health scare. If you own CRON stock, now is the time to be thankful that Altria (NYSE:MO) owns 45% of the cannabis company, with an option to buy an additional 10% in the future. Here are three reasons why that's the case. * 7 Discount Retail Stocks to Buy for a Recession Altria Understands Lungs Better Than MostWho would have more knowledge about how our lungs operate than a company whose products are directly responsible for harming them?Altria would not have made a $12.8 billion investment in Juul Labs or a $1.8 billion investment in CRON stock if it didn't understand the health risks associated with vaping. MO has been down this road many times with cigarettes. The fact that President Trump and his administration are trying to crack down on the sale of flavored e-cigarettes, while understandable, isn't really crucial for CRON stock. According to the Center for Disease Control and Prevention, 480,000 Americans die each year due to smoking. That's a staggering amount. However, we haven't seen cigarettes outlawed as a result of that sad situation. In fact, the FDA is currently trying to ban the sale of menthol cigarettes, but the tobacco companies will continue to fight the agency's legal efforts for years to come. Flavored e-cigarettes will likely take a long time to ban. The reality is that Altria understands what's at stake when it comes to vaping and e-cigarettes. They, along with the rest of the industry, are not going to go quietly into the night. Remember, the NRA isn't the only trade group in the U.S. with a powerful lobby. CRON Stock and a Potential MergerIn recent weeks, Altria's been negotiating with Philip Morris International (NYSE:PM), the owners of the Marlboro brand outside the U.S., to reunite after 11 years as separate companies. Last October, before Altria bought up a big chunk of CRON stock, I suggested that Philip Morris should make a play for one of Canada's big cannabis companies. "The tobacco companies were born to manufacture and sell the various by-products of the cannabis plant which includes marijuana and hemp," I wrote at the time. "The fact that only now are they considering a move -- after legalization in Canada -- suggests they've been irreparably scarred by years of tobacco litigation."Cowen & Co. analyst Vivien Azer recently suggested that the crackdown on vaping flavoring might be the nudge CRON and MO needed to officially tie the knot. After an acquisition, CRON would be controlled by a company with $54.7 billion pf annual revenue and $14.3 billion in free cash flow, providing it with plenty of capital to fight any potential opposition to cannabis vaping in the future. Altria Has a Beverage UnitCronos isn't the only cannabis company with a big focus on vaping. Aurora Cannabis (NYSE:ACB) is focusing on vape pens and edibles while ignoring cannabis beverages.I believe that's a mistake. Perhaps not a lethal one, but a mistake nonetheless. The older people get, the less they want to be messing with their lungs,. That's why I think cannabis-infused drinks will win in the end. Altria, although not nearly as involved in the alcoholic beverages industry as it once was, still owns premium wine producer Ste Michelle Wine Estates. In addition, as a result of Anheuser-Busch's (NYSE:BUD) $100-billion acquisition of SABMiller in 2016, Altria owns 10% of BUD stock.It's hard to imagine Budweiser turning down an opportunity to partner with Atria and Cronos to produce cannabis-infused drinks on a global basis. As long as Altria continues to own a big chunk of Cronos Group stock, I don't think investors need to overreact to the latest health concerns surrounding vaping. 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 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post 3 Reasons Altriaas Investment in Cronos Group Stock Is Positive for CRON appeared first on InvestorPlace.
, premised in part on vaping’s continued popularity in the US. In a matter of weeks, doctors in 33 US states have connected at least 450 cases of lung disease to e-cigarette use. Alex Azar, his health secretary, blamed them for a vaping “surge” among American school children.
The Trump administration announces a crackdown on electronic cigarettes in an effort to combat the youth vaping epidemic, with Health and Human Services Secretary Alex Azar tweeting that the goal was to “clear flavored e-cigarettes from the market.”
Altria Group stock has had a tough year, and the recent announcement from the White House about plans to potentially ban all e-cigarette flavorings might be a good reason to speed up talks with Philip Morris International, opines Cowen & Co.
Vaping is a growing trend among youngsters, but Trump's recent threat to ban flavored e-cigarettes raises questions. Will traditional cigarette get back its lost glory?
The Trump administration is moving to ban flavored e-cigarettes, but one lawmaker says Trump has not acted quickly enough to combat the risks posed by vaping.
Tobacco stocks erased losses to finish up after the Trump administration said it's preparing to ban flavored e-cigarettes.
President Donald Trump expressed support for negative interest rates on Wednesday, and moved to crack down on vaping as he called it a danger to children.
Cronos Group (NASDAQ:CRON) stock remains overvalued. Despite cannabis sector's summer selloff, CRON stock still trades at a premium to peers. But with recent acquisitions, the company's future prospect may start to meet expectations. Last month's acquisition of several U.S.-based CBD businesses could help bolster the company's growth strategy.Source: Shutterstock But what makes CRON stock a better pick than the rest? Peers such as Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC) are not without their flaws. But both sell at more reasonable valuations.Is there opportunity with Altria Group (NYSE:MO) backed Cronos? Or should investors seek cannabis plays elsewhere? Let's take a closer look at Cronos Group stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's The Latest at CRON?In August, Cronos Group purchased 4 U.S.-based CBD businesses from Redwood Holding Group. The most notable asset purchased in this deal was the Lord Jones brand of CBD-infused skincare products. In the U.S., marijuana has yet to be legalized on the federal level. But CBD is fully legal. Gaining a toehold in the American market via CBD is just the first step. * Take Buffett's Advice: 5 Vanguard Funds to Buy But Capitol Hill is moving slow on legalization. Without access to banking services, "Big Pot" in the United States remains a pipe dream (for now). This didn't stop Altria Group from making a big bet on Cronos. Altria (parent of Phillip Morris USA and a major investor in vaping giant Juul) made a $1.8 billion investment. This gave the tobacco giant a big seat at the table.The relationship with Altria helps Cronos with their vaping product strategy. But the health effects of vaping have dominated the headlines. However, as InvestorPlace contributor Josh Enomoto wrote on September 10, the "vaping crisis" could cool down over time. But with these challenges, its tough to see a clear path to profitability. With the stock trading at such a high enterprise value/sales ratio, Cronos needs to hit it out of the park to "grow into its valuation". Cronos Remains Extremely OvervaluedCRON stock continues to trade at a premium. The company's enterprise value/sales (EV/Sales) ratio is a staggering 109.9. For comparison, Aurora Cannabis trades at an EV/sales ratio of 51.6. Canopy Growth shares change hands at a EV/sales ratio of 40.1. Tilray (NASDAQ:TLRY) has an EV/sales ratio of 32.9. Aphria (NYSE:APHA) sells at a relatively reasonable EV/sales ratio of 9.8.Is Crono's premium valuation all thanks to Altria? Having America's biggest tobacco company on your side is a plus. But it is no guarantee of U.S. market domination. The deal was highly dilutive for Cronos shareholders. Altria received a slug of warrants along with their investment. These warrants have a strike price of $19/share. This is well above Crono's current price of $11.73/share. But the high amount of warrants outstanding minimizes upside.But this deal gave Cronos plenty of capital. As of June 30, 2019, CRON had CAD $1.6 billion in cash, and CAD $745 million in short-term investments. Even after the recent asset purchases, the company has plenty of money to fuel growth. Additional capital raises are unlikely. The company is operating at a loss. But it is not hemorrhaging money as quickly as its peers. This means downside is limited. But with upside challenges, it is tough to see the value in CRON stock. Look Elsewhere For a Pot PlayI am still waiting for pot stocks to reach lower valuations. But you may be more keen on placing a bet on the cannabis sector. If you are looking for a pot play, look at any other stock but Cronos. The company continues to trade at a mind-boggling valuation. It has a logical strategic partner (a tobacco company). But it remains unclear how this will translate into a market edge.I have been bearish on both Aurora Cannabis and Canopy Growth. But at least both of these companies offer a clearer path to success. Among the other major marijuana stocks, companies like Aphria stand out for their reasonable valuation. * 10 Stocks to Sell in Market-Cursed September It may pay to take your time with marijuana stocks. Valuations could reach more reasonable valuations down the road. But if you are looking for a pot play today, look at anything else but Cronos Group stock.As of this writing, Thomas Niel 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 in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Stay Far Away From CRON Stock Until Its Valuation Comes Down appeared first on InvestorPlace.
All kinds of government entities will be lining up against Juul Labs, lawsuits with big awards are coming and who knows what else as MO is in a downtrend with $35 as the next price target.
Investing.com – President Donald Trump said Wednesday he was looking into banning all non-tobacco flavored vaping products from the market. He made the comment to reporters at the White House.
The president announces he is holding a policy discussion on vaping after a mysterious lung disease killed at least six people.
Aurora Cannabis (NYSE:ACB) stock will report its earnings on Thursday before the opening bell. Investors will closely watch Aurora Cannabis stock for guidance amid its decline and that of its peers.Source: Shutterstock Yes, some of the stock decreases came when peers such as Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) issued their reports. Still, ACB stock faces its own test. Although Aurora should continue to lead the world in marijuana production, size alone will not make ACB a buy going into earnings. Q2 Expectations and ACB StockFor the second quarter, analysts expect a loss of five Canadian cents (3.8 cents) per share. The company reported losses of 15 Canadian cents per share in the same quarter last year. However, investors should note that Aurora has missed estimates in three of the previous four quarterly reports.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September They also predicted revenues of C$258.95 million ($196.71 million). If this holds, it will represent a 369.1% increase in revenues year-over-year. ACB brought in revenues of C$55.2 million in the second quarter of 2018.Despite the massive increase in revenue, the only likely source of profit for Aurora Cannabis will come from stock trading. The company recently sold its 10.5% stake in The Green Organic Dutchman Holdings (OTCMKTS:TGODF).This nets the company $86.5 million. As our own James Brumley states, the deal could buy C$86.5 million ($65.71 million) worth of time to generate profits. It could also help with debt relief as the company has to pay back C$230 million worth of debt on March 9, 2020. Outstanding Shares and Aurora Cannabis StockAnother key component that should garner investor interest involves the shares outstanding on Aurora Cannabis stock. In previous articles, I have remained bearish on ACB stock for the massive amount of dilution. About 129 million shares existed in 2016. Today that figure now exceeds one billion.In a sense, I do not blame the company for diluting the stock. The market's toleration for high multiples seems to have fallen. Despite an ACB stock price of around $6 per share, the equity still trades at about 43.7 times sales.While Aurora continues to lose money, it makes sense from a company perspective to issue more shares. However, with that level of dilution, it leaves investors with no good reason to pay nearly 44 times sales for the stock. Other dangers for Aurora Cannabis StockThis situation could also lead to something unthinkable for a world leader in marijuana production--a reverse stock split. The average price-to-sales (PS) ratio for the S&P 500 stands at 1.53. Even if ACB stock fell to a PS ratio of 4.37 under current revenue figures, that would take ACB to about 60 cents per share.A reverse split means little in a financial sense, and I believe revenue growth will reduce the PS ratio over time. Still, it would represent a huge psychological blow if it needed to make such a move to escape penny stock status.James Brumley makes another critical point. Companies such as sit on billions in goodwill from various acquisitions. Aurora itself paid C$3.2 billion ($2.43 billion) to purchase MedReLeaf. A forced write-down of this purchase and comparable takeovers by peers could hurt stocks across the industry. This could have also played a role in Aurora's sale of TGODF stock. Final thoughts on ACB stockUnder current conditions, the company earnings report will likely leave investors with little reason to own Aurora Cannabis stock. Aurora Cannabis remains a world leader in the production of marijuana. Even if the company falls short of earnings estimates again, I see little that should threaten this leadership change.However, investors need to separate Aurora Cannabis from Aurora Cannabis stock. Given the elevated multiple, Aurora has supported itself and funded acquisitions in large measure from massive stock dilution. Despite the proceeds from selling its stake in the Green Organic Dutchman, the company still needs cash to fund operations and pay debts. As long as this practice continues, I see little reason to own ACB stock.As I have stated before, profiting from Aurora Cannabis stock long term will only happen when the company transforms itself. When it becomes profitable and pays dividends like Altria (NYSE:MO), investors can more reliably earn positive returns from the Aurora story.Unfortunately, today's Aurora Cannabis could easily face write-downs and possible a reverse stock split. With continuing losses, stock dilution, and earnings misses, investors have little incentive to pay almost 44 times sales for such an equity, before or after the earnings release.As of this writing, Will Healy did not hold a position in any of the aforementioned stocks. You can follow Will on Twitter at @HealyWriting. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Avoid Aurora Cannabis Stock, Both Before and After Earnings appeared first on InvestorPlace.
Philip Morris International said Wednesday that the board increased the tobacco company's dividend 2.6% to an annualized $4.68 a share. In August, the New York company confirmed that it was in merger discussions with Altria Group regarding a potential all-stock deal as traditional tobacco smoking across the globe declines. A merger would reunite Philip Morris International and Altria more than a decade after the two companies split.
The Trump administration is examining whether to ban flavoured e-cigarettes, after more than 400 patients have been diagnosed with a mysterious illness linked to vaping and six have died. Alex Azar, the US health secretary, said the US Food and Drug Administration is looking at whether to require e-cigarette makers to remove all flavours other than tobacco from the market. Speaking after a White House meeting with Donald Trump and Ned Sharpless, the acting FDA commissioner, he said it will take action if companies are marketing flavoured e-cigarettes to children.
Piper Jaffray’s Michael Lavery lowered his rating and cut his price target on Altria stock, citing less confidence in the company’s future and uncertainty around the future of vaping.
Cronos Group (NASDAQ:CRON) is taking a different path than the rest of the cannabis industry. Long-term, that looks like a good thing for Cronos Group stock. It's the short-term trading in CRON stock that looks like a potential problem.Source: Shutterstock To be sure, CRON stock already has lost more than half its value just since early March. And the stock did put in a bit of a bottom starting in late August, though a decline on Monday suggests the selling pressure might not yet be over.That said, the problem for Cronos Group stock seems the same as I argued back in July: it's the cannabis play for investors who worry that cannabis plays still look overvalued.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September That doesn't mean the long-term strategy will fail, of course. As one of those investors who long has questioned valuations in the sector, I see the Cronos stock strategy as particularly wise. But Q2 earnings last month further highlight the near-term issue: even if Cronos Group is right, CRON stock still lacks an immediate catalyst. The Long-Term Strategy for Cronos Group StockOne of the core principles of Cronos' strategy is that producing cannabis is likely to be a narrowly profitable or even unprofitable endeavor. It's copying the strategy of Altria Group (NYSE:MO), looking to build a network of contract producers instead of building out capacity itself.Using that third-party supply, Cronos then plans to enter differentiated, value-added, and higher-margin markets. Its Cronos Device Labs focuses on designing new and improved vaporizer products. A research and development partnership looks to create new cultured cannabinoids. It's looking to edibles and topicals as well.As CEO Mike Gorenstein phrased it early in his prepared remarks on the Q2 conference call, "We have often discussed our view that in the mature market, capacity is a means to an end, not the key driver of value."That view makes sense. Prices in several regulated U.S. markets have crashed. Recent earnings from Tilray (NASDAQ:TLRY) showed a big, and worrisome, drop in average price per gram. Cannabis bears long have argued that production will be a capital-intensive and low-margin endeavor. In other words, not a great business -- even if demand for legalized cannabis soars over the long haul. The Near-Term Problem for CRON StockOne issue for CRON stock is that the strategy goes against sector bulls. Investors who see a cannabis boom on the way are going to choose the likes of Canopy Growth (NYSE:CGC) and Aurora Cannabis (NYSE:ACB). Both companies have used acquisitions to build out production and worldwide reach.But a new issue seems to have popped up after last month's Q2 report. On the Q2 call, Cronos forecast that its Adjusted EBITDA loss would increase in the second half. Investments in branding and R&D are the key culprits.That's likely not what investors want to hear at the moment. Across the sector, worries about the bottom line seem to be offsetting any good news on the top line.Cronos handily beat revenue estimates in its Q2 report -- yet Cronos stock, after a brief pop, continued its downward trend. Cowen, a long-time CRON bull, lowered its price target to C$17 after earnings, citing worries about Cronos' "path to profitability."If investors are going to choose a cannabis stock on profitability, CRON probably isn't it, at least through the second half of this year. Those 'value' seekers might look to Aphria (NYSE:APHA), who is guiding for positive Adjusted EBITDA.If investors want revenue, CRON similarly isn't the choice. Its revenue and production numbers will look lower than peers. CEO Gorenstein himself admitted as such on the Q2 call. "Now, we understand that many investors are modeling cannabis companies off of their production capacity," he told listeners. "However, our business model is not to be the farmer."In the short term, there's yet another issue. The company's focus on edibles and vaporizers means key revenue isn't coming until 2020, as regulatory body Health Canada has been slow to approve cannabis derivatives. As such, in terms of both revenue and profits, Cronos looks like a 2020 story at best. How to Play CRON StockFor the next six months at least, whatever the fundamental metric, CRON stock is going to look less attractive than its peers. Neither its production nor its revenue is going to be as high as that of companies building out capacity. Its earnings, at least in Q3 and Q4, are going to stay negative. Revenue contributions from derivatives won't come until next year.And, at least for the moment, cannabis investors seem to be more focused on the fundamentals. That's truthfully an odd focus to have. Regulated cannabis is a nascent market. Legalization of recreational marijuana will take years, if not decades, to play out worldwide.It's a doubly odd focus for investors to have when it comes to Cronos. The company has roughly US$1.5 billion in cash after its recent acquisition of U.S. CBD player Redwood. There's almost no risk of bankruptcy unless Cronos decides to splurge big on an acquisition -- something that seems highly unlikely given its strategy.More broadly, this is a stock and a market that require patience. Investors right now don't seem to have that patience. That likely goes double for CRON stock, whose markets will take longer to develop than those of peers moving to build out significant capacity.Until that changes, Cronos Group stock, and the sector as a whole, are unlikely to rebound. After Q4 earnings in particular, it looks like a rebound in CRON is a ways off.What can an investor do? Selling puts is a strategy only for investors who truly understand options trading, which can be risky. But premiums on CRON stock are reasonably high, leaving an investor with either attractive returns or the ability to own CRON below $10.That aside, patience is likely wise here. The sector is struggling. Cronos is going to post losses in the next two quarters at least. The wisdom -- or folly -- of its strategy will take years to be proven. Until then, sideways trading might be the best investors can hope for. Of course, that sideways trading could be an opportunity, if treated correctly.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post CRON Stock Will Require a Lot of Patience appeared first on InvestorPlace.