|Bid||54.31 x 800|
|Ask||54.35 x 1800|
|Day's Range||53.28 - 56.31|
|52 Week Range||42.40 - 66.04|
|Beta (3Y Monthly)||0.25|
|PE Ratio (TTM)||14.77|
|Forward Dividend & Yield||3.20 (5.57%)|
|1y Target Est||N/A|
Ah, the magic of analyst ratings! After a tough month in April, cannabis firm Hexo (NYSEAmerican:HEXO) suddenly reversed course after Bank of America analyst Christopher Carey initiated coverage. Sizing up the risk and reward profile, Carey assigned a "buy" rating on Hexo stock with a $10 price target.Source: Shutterstock The news couldn't have come at a better time. While cannabis stocks offer tremendous upside because they essentially materialize an industry that previously never existed, they're also incredibly volatile. Because this is an unprecedented sector, many investors are unsure how to approach a company like HEXO.As such, I mentioned earlier that I liked Hexo stock, even compared to relative heavyweight Aurora Cannabis (NYSE:ACB). Unfortunately, the aforementioned volatility in cannabis stocks disproportionately impacted HEXO, sending my recommendation toward a quick grave. But thanks to Carey, this bad boy gained nearly 12% on Wednesday.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks to Buy for Spring Season Growth Of course, by the time that you're reading this, this dramatic burst in Hexo stock is in the past. Do newcomers still have a chance in riding this promising, but wild bull? Underappreciated Elements Support Hexo StockThe best way I can characterize Hexo stock is as a diamond in the rough. I believe the organization has the right components in place to make a solid run. However, the credibility issues that stymie virtually all cannabis stocks will pressure HEXO. At the end of the day, it comes down to your risk tolerance.But if you're willing to take that leap, Carey argues that this weed play deserves your attention. Primarily, HEXO stock is undervalued relative to its peers. Of course, in the marijuana sector, "undervalued" is an extremely relative term. That said, many cannabis stocks have hit nosebleed levels. Therefore, HEXO at least on paper provides some assurance of future room for growth.Next, the BofA analyst mentioned that Hexo stock is levered toward a "de-risked" Canadian cannabis market. Although I wouldn't use that term specifically, I see his point. Our northern neighbors paved the way for other western and developed nations to adopt tolerant policies. While this broader dynamic is building out, management has time to hone its craft.Finally, Carey mentioned "value-add partnerships" that go beyond the scope of Hexo's existent relationship with Molson Coors Brewing (NYSE:TAP). I agree. Cannabis stocks can branch out into subsegments of the broader categories of recreational and medicinal usage. However, let's not gloss over the Molson partnership as it holds a significant key for growth.Naturally, the idea here is for Hexo and Molson to developed cannabidiol (CBD)-infused drinks. Now, CBD itself is a tailwind for the industry as it offers non-psychoactive exposure to the cannabis plant. In other words, it's a lot easier to introduce people to weed through a drink rather than a joint. Upgrade Suggests Rising Credibility for Cannabis StocksIndeed, Hexo's Molson partnership has advantages over an expected synergy like Cronos Group (NASDAQ:CRON) and Altria Group (NYSE:MO). I don't think I can ever get my parents to smoke marijuana. But to drink it in a form that won't get them stoned? That's infinitely more palatable and more socially acceptable.Invariably, that had to enter BofA's thinking process when deciding to go bullish on Hexo stock. But just the fact that the big bank is even considering cannabis stocks is a major sign. It gives the industry significant credibility, and it suggests a very viable environment in the future.While we here in the U.S. have also warmed to varying degrees of legalization, most banks won't finance cannabis-related businesses. Why? Because it comes down to that nasty roadblock called Schedule I. Despite individual state laws, cannabis falls under strict federal guidelines.Sure, we've made progress in this department, too. For instance, the 2018 farm bill won consensus at a time when bipartisanship no longer exists. And major conservative figures have more or less voiced support for full legalization.Nevertheless, that Schedule I classification remains on the books for marijuana. Unless the federal government officially extinguishes it, most banks won't touch cannabis stocks. * 5 Dividend Stocks Perfect for Retirees And while BofA isn't necessarily diving into the sector with open arms, it's essentially giving you the green light to do so. Look, Hexo stock is a risky play no matter how you cut it. But if you've got the nerve, I'd read between the lines.As of this writing, Josh Enomoto 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 Spring Season Growth * This Is How You Beat Back a Bear Market * 7 Dental Stocks to Buy That Will Make You Smile Compare Brokers The post If You Can Tolerate Risk, Hexo Stock Is a Buy appeared first on InvestorPlace.
LOUISVILLE, Ky. (AP) — Senate Majority Leader Mitch McConnell said Thursday he plans to introduce legislation to raise the minimum age to buy tobacco products from 18 to 21 nationally, rating the health initiative as one of his top priorities.
Philip Morris Beat Analysts' ESP and Revenue Expectations in Q1(Continued from Prior Part)Stock performancePhilip Morris International (PM) outperformed analysts’ revenue and EPS expectations in the first quarter. Despite strong first-quarter
The tobacco giant was trading down, as concerns about potential legislation overshadowed better-than-expected first-quarter results.
Canopy Growth will probably purchase the rights to buy Acreage Holdings to tap the growing potential of the U.S. marijuana market. This should bolster the ETF MJ.
Speaking at an event Thursday in his home state of Kentucky, the second biggest tobacco producer after North Carolina, the Republican leader said he plans to introduce legislation in May and expects it will get bipartisan support in the Senate. McConnell said he is motivated partly by the growing popularity of vaping products among young people, which studies have shown can affect brain development and yield higher rates of addiction to other drugs.
As the trend of marijuana legalization continues, cannabis-related stocks continue to proliferate. But fundamentals and technicals remain weak for many of the stocks in this space.
Tobacco stocks fell Thursday, after Senate Majority Leader Mitch McConnell (Repub-Ky.) said he would introduce legislation that would raise the age to buy tobacco from 18 to 21. The new age limit would apply to all vaping and tobacco products, although young members of the military would be exempted. The news comes after a long campaign by outgoing Food and Drug Administration Commissioner Scott Gottlieb to crack down on teen vaping. Altria Group Inc. shares fell 2.7%, while Philip Morris International Inc. was down 1.1%. U.S.-listed shares of British American Tobacco fell 1.3%.
Altria (MO) possesses the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.
Coca-Cola (KO) is likely to continue gaining from product launches, and focus on lifting and shifting successful brands globally in first-quarter 2019. However, currency headwinds may hurt results.
Although high input costs are a concern for players in the consumer staples sector, a few are likely to gain from prudent acquisitions, savings and brand augmenting efforts.
Procter & Gamble's (PG) product innovation, packaging and marketing initiatives, and productivity and cost-saving plan are likely to aid growth. Higher commodity and shipping costs are concerns.
Here are the worst plastic products, and some of the most common brands that pollute U.S. rivers, lakes and oceans, and what you can do about it.
Poor earnings from cannabis producer Aphria (NYSE:APHA) let loose a foul smell across the marijuana sector to start the week. Investors lit up Aphria stock for a 15% loss on Monday. The rest of the major pot players suffered significant losses in sympathy. Canopy Growth (NYSE:CGC) couldn't buck the trend. CGC stock fell 3.6% on Monday, extending its downward momentum.Source: Shutterstock On the one hand, it's tempting to dismiss Aphria's results as not being a big deal. Aphria is a scandal-plagued company whose former management quit. Short sellers attacked the company for allegedly mistreating shareholders.Aphria's results included a big writedown on one the controversial assets, suggesting that the short sellers were correct about wrongdoing there. That said, even excluding potential questionable dealings, Aphria's results straight up stunk.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 AI Stocks to Watch with Strong Long-Term Narratives Aphria's quarterly loss came in at at -C$0.20. That was far worse than the four cent loss that analysts had expected. Additionally, Aphria printed just C$74 million in revenues against expectations of C$83 million. To put it bluntly, this was an awful start to earnings season for the marijuana companies. What's it mean for CGC stock? Aphria Stock and Investor ExpectationsUp until last October, marijuana companies could largely get by with just selling investors a promising story. Few market participants cared about how much money the pot players were losing. The losses didn't matter, since people assumed that windfall profits would come once legalization arrived on a national level in Canada.Aphria initially showed signs that this could come true, as they became the first to deliver a quarterly profit a few months ago. But this quarter showed a big setback. The profits vanished, turning back into large losses (even before the accounting write-down on their LatAm business).The average price per gram sold continues to drop and gross margin plummeted. Some of this is due to changing distribution strategies, but a lot appears to be tied to simply too much marijuana production compared to demand.When marijuana wasn't legal yet, investors didn't have to worry about revenues, profit margins, cash burn, and the like. The future held so much potential. Now, however, the numbers get more and more troubling with each passing set of quarterly results. Canopy's earnings don't come out for another month yet. But with Aphria's numbers looking so dour, people will be on the defensive in CGC stock. Canopy Growth and Aphria StockOn the other hand, it's not all bad news for CGC stock either. Marijuana is a Wild West right now. Dozens of companies are rushing into the arena, trying to grab their share of the fortunes that are being made. Unfortunately, like in the gold rush of 1849, most people that try to make money will end up losing. The marijuana industry will have to consolidate; there isn't room for dozens of firms to be profitable.Canopy has a huge leg up here, as it is one of the few weed players with a major backer. Canopy was the first to score a major corporate endorsement, getting Constellation (NYSE:STZ) to invest heavily in the firm. Since then, Cronos (NASDAQ:CRON) scored a similar major backing from Altria (NYSE:MO).That should give those two firms a major advantage moving forward. Smaller and unaligned marijuana firms are suffering major losses and cash burn. They'll have to keep raising capital from the markets on increasingly unfriendly terms.Meanwhile, the select few which have major sponsorship will be able to operate more efficiently and consolidate the industry as weaker players drop out. Aphria, with its scandals and shifting management team could be one of the victims of this consolidation wave, giving more of the market to Canopy. Aphria Stock Was Bound to TumbleThere's another sign of the strong getting stronger while weaker players like Aphria stumble. That would be the stock indexes. Last Friday, S&P announced that CGC stock will be joining the prestigious S&P/TSX 60 stock index. This index tracks the 60 largest firms in Canada, and is one of the major players that passive ETFs and mutual funds follow.Remarkably, Canopy, even as such a new operation, has already managed to outpace one of Canada's leading precious metals firms, Goldcorp (NYSE:GG). Canopy surpassed Goldcorp in market cap, leading to CGC stock taking GG's place in the index.When this change is put into effect later this week, it should lead to a surge of buying for CGC stock as passive funds are mechanically forced to exchange their Goldcorp stock for Canopy. Smaller firms like Tilray (NASDAQ:TLRY) and Aphria won't benefit from this sort of index buying, as their market caps are simply too diminutive to get picked up by major stock indexes. The Bottom Line on Aphria StockAphria kicked off earnings season with some dreadful numbers. And let's face facts, they won't be the only ones. The shine is coming off a lot of these pot stocks now that legalization is here and yet the losses keep piling up.At the time of this writing, Ian Bezek owned MO stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post Aphria Stock Might Be the First Victim as Pot Stocks Face Reality appeared first on InvestorPlace.
There's one obvious piece of good news in Monday's fiscal-third-quarter earnings report from cannabis producer Aphria (NYSE:APHA). Revenue rose 617% year-over-year. But that aside, the Q3 release looks disappointing - and investors have reacted as such. APHA stock is down 12% as of this writing.Source: Shutterstock For some investors, the revenue growth might be enough. Investors in marijuana plays like Aphria stock presumably know that it will take time for the market to develop. As a result, marijuana producers are likely to run at a loss as they build their respective businesses.But in a sector whose valuations have soared this year -- APHA stock was up 77% YTD before the release -- anything short of perfection might not be enough. And given the multitude of options investors have in the space, it's tougher after earnings to make the case for Aphria stock as the most attractive choice in cannabis.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aphria Stock EarningsRelative to year-prior periods, Aphria's growth looks impressive. Against expectations, however, the quarter seems to have fallen short. Revenue of C$73.6 million was nearly C$10 million lower than consensus. An adjusted net loss of C$0.20 per share widened year-over-year, and missed the Street by C$0.16. * 7 Mid-Cap Stocks to Find the Market's Sweet Spot To be sure, investors don't necessarily need to overreact to the shortfall against analyst expectations. Only three analysts appear to have made revenue estimates, and just one for EPS. Revenue modeling is going to be inexact for some time, given how new the industry is. And earnings at this point simply don't matter all that much: Aphria, like its peers, is investing now to build the infrastucture needed to supply existing and new markets for years to come.Even with that caveat, however, the numbers don't look particularly impressive. Most of the 600%-plus revenue growth was acquired, primarily through the recent purchase of Germany's CC Pharma. CC Pharma is a pharmaceutical distribution company with only modest cannabis exposure at this point. Aurora's production revenue rose 73%; a solid figure, but not quite spectacular in the context of a price-to-production-revenue multiple that still is over 30x.Meanwhile, those distribution revenues led margins to crash. Gross margin dropped from 47% to 18%. Aphria's own release cites very thin margins for CC Pharma: only about 4% in terms of EBITDA. That's admittedly not surprising -- most distributors have narrow margins -- but it colors the reported revenue growth.In that context, the numbers aren't as impressive as the headlines suggest. Aphria is growing its pot business - but perhaps not as fast as a $2 billion-plus valuation suggests it should be. APHA Stock Takes a Writedown-Driven HitBeyond results, the Q3 release offered two more pieces of data, neither of which looks particularly positive for Aphria stock. First, it took a C$50 million impairment on assets acquired in Latin America. Those assets were purchased just last year -- and were the subject of an investigation by short-sellers who claimed company insiders had inflated the purchase prices, and benefited in the process.APHA stock has rallied since falling on that report. But the company admitted back in February that the purchases were made "near the top of the range of observable valuation metrics." It noted, too, that its own investigation had found that directors had undisclosed conflicts of interest during the acquisition process.Now Aphria has written down the value of the assets by roughly 20%. The company still claims that it got a good price, citing a current C$225 million valuation against "the original agreed purchase price" of about C$195 million. But in a cannabis market that has soared since, a decent deal doesn't look quite as attractive. And with the company attributing the write-down to lower-than-expected margins from the business -- just a few quarters after those deals closed -- there's an obvious worry that more bad news is on the way. Aphria Stock and Green Growth BrandsThe second piece of news is that Green Growth Brands (OTCMKTS:GGBXF) has called off its attempt to acquire Aphria. The news admittedly isn't all that surprising. Green Growth's offer was odd, as Luke Lango on this site pointed out at the time. It actually valued APHA stock at less than market value -- and still does.And Aphria is getting C$89 million in cash as a result of the deal breaking through a somewhat complicated transaction. (It's basically redeeming a note it's owed by a third party, who is paying Aphria via funds raised by selling Green Growth Brands shares back to the company.) That's more funding for the company's rollout - and perhaps M&A.Still, the end of that deal raises the question: is there another potential partner for Aphria? We've seen Constellation Brands (NYSE:STZ, NYSE:STZ.B) take a stake in Canopy Growth (NYSE:CGC). Altria (NYSE:MO) has done the same with Cronos (NASDAQ:CRON). Can Aphria compete against those big boys without a well-heeled partner of its own? Better Choices than APHA?To be sure, Q3 results don't break the case for Aphria stock or marijuana stocks more broadly, but they do raise more red flags and add to the sense that investors interested in the cannabis sector might look elsewhere for value.The billions of dollars in capital backing Canopy and Cronos give those companies a notable edge. The writedown of the Latin American assets adds another risk to APHA, even with new management on board.Other stocks in the sector have fallen on Aphria's earnings. CGC stock is off nearly 4%, and CRON is down 8% as of this writing. With those stocks cheaper and Aphria disappointing, there's a case that bigger, and maybe cleaner, is better. With so much risk to APHA stock already present from a valuation standpoint, there's not much room for anything else. That's why APHA is falling today and why it might underperform for quite a while going forward.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post Aphria Stock Takes a Hit After Disappointing Earnings appeared first on InvestorPlace.
If you want to compound wealth in the stock market, you can do so by buying an index fund. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the Altria Group, Inc. (NYS...
Why Investors Are Optimistic about Philip Morris’s Q1 Earnings(Continued from Prior Part)Analysts’ recommendations Of the 20 analysts that follow Philip Morris International (PM), 55% have given the stock “buy” ratings, while 30% have given
Why Investors Are Optimistic about Philip Morris’s Q1 Earnings(Continued from Prior Part)Analysts’ EPS estimatesAnalysts expect Philip Morris International (PM) to post adjusted EPS of $1.01 in the first quarter, a rise of 0.7% from its EPS of