46.12 -0.13 (-0.28%)
Pre-Market: 8:17AM EDT
|Bid||45.90 x 1400|
|Ask||46.50 x 1200|
|Day's Range||45.93 - 46.53|
|52 Week Range||42.40 - 66.04|
|Beta (3Y Monthly)||0.35|
|PE Ratio (TTM)||13.81|
|Earnings Date||Oct 31, 2019|
|Forward Dividend & Yield||3.20 (6.95%)|
|1y Target Est||57.67|
Altria (MO) stock has lagged the broader market in 2019. On August 17, the CDC noted that it is investigating lung diseases linked to e-cigarette use.
As JUUL begins to look vulnerable, a slew of challengers to the vape crowd are emerging. Who Wants the Smoke? JUUL, which is owned by nicotine kings and Marlboro manufacturers Altria, has faced criticism from lawmakers for (among other things) marketing its product to teenagers. The anti-smoking advocacy group Truth found that 15- 17-year-olds are over 16 times likelier odds to be JUUL users compared to those aged 25-34. In response to a “request” from the Food and Drug Administration, JUUL pulled its teen-friendly fruit-flavors from retailers, though they are still available online. But JUUL’s competitors, sensing an opportunity, have moved to fill the void. NJOY To the World The independent New York company NJOY sells its e-cigarettes for 99 cents in stores, as opposed to the $7.99 it charges online, or JUUL’s online cost of $34.99. When it comes to electronic cigarettes, users buy the device once, and the companies make money in the long run from the sale of “pod” refills, which tend to not be interchangeable with other devices. The steep discount is seen as a clear way to get customers to switch over. Despite the criticism JUUL faced, NJOY continues to offer fruit flavors such as watermelon twist and blueberry. Feeling Blu Other e-cigarette competitors are following NJOY’s lead and offering deep discounts to lure customers to try their brand, British American Tobacco’s Vuse offers Alto vapes for 99 cents online, down from $24.99, as a bonus when someone buys a pack of pods, and the Miami-based mobile company Blu is offering their myblu device for $1, down from the normal $19.99. But…. JUUL still dominates the e-cigarette market at 71.4%. The electronic cigarette industry is booming, but considering that JUUL is beset on all sides by criticisms from lawmakers (the Center for Disease Control recently announced an investigation into a “cluster” of lung illnesses that could possibly be related to e-cigarette use) and further legal restrictions and investigations could be forthcoming, it might not be the safest investment. -Michael Tedder Photo: Mike Blake/Reuters
I'm going to be blunt straight off the bat. Although the topic of the day is Aurora Cannabis (NYSE:ACB), we can essentially lump all the major marijuana players together. That's what the markets are doing and for good reason. At the end of the day, ACB stock is a race against time.What do I mean by this? Simply, we know that virtually all marijuana-based investments, even top-shelf names like Aurora Cannabis stock, have challenged fundamentals. Most financial institutions won't touch the sector because technically and legally, it could all go belly up without much warning.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFurther, even though some weed firms have forged lucrative partnerships -- look at Cronos Group (NASDAQ:CRON) and Altria Group (NYSE:MO) -- it's not enough to garner widespread credibility. One of the main criticisms of ACB stock and its ilk is that the underlying company is expanding aggressively.That's resulted in a cash burn problem that has weighed on Aurora Cannabis stock. * 10 Undervalued Stocks With Breakout Potential On the other hand, we know about the paradigm-shattering potential for this "agricultural" industry. For instance, I've routinely used the phrase -- to annoyance perhaps -- that marijuana represents a transformative investment. Primarily, I keep saying this because this industry made the hardest of shifts, from non-existence (legally speaking) to existence; in other words, from zero to something.And that's why I'm using the racing analogy for ACB stock. Aurora Cannabis and its big brethren are hoping that their flawed financials buy them enough time to actualize marijuana's potential. I believe that the top players and some smaller, promising outfits can. Here are three reasons why: Harvard Research Offers Groundbreaking Medical Potential for ACB StockPancreatic cancer is among the nastiest of all cancers, imposing a very low survival rate. Infamously and tragically, it took the life of Apple's (NASDAQ:AAPL) Steve Jobs. But now, new hope for a cannabis-related breakthrough should immediately intrigue anyone holding Aurora Cannabis stock.Researchers at Harvard University's Dana-Farber Cancer Institute released a report indicating that a cannabis compound offers "significant therapy potential" for treating pancreatic cancer. Specifically, the researchers isolated and extracted this compound, known as a flavonoid. Through genetic engineering, they ramped up production of this flavonoid, and applied it against malignant tumors.The study noted that the application resulted in metastatic tumor cell kills. Based on the researchers' enthusiasm for the outcome, this news has incredibly positive implications for ACB stock.I'm not suggesting that Aurora Cannabis stock will suddenly rise on this development. What I am saying is that mainstream interest toward at least medical-cannabis legalization will spike. And this really has the potential for sparking full federal legalization.It's also a political no-brainer. What dimwit would stand in the way of promising cancer therapies because they have moral or religious reservations? If many lives can be saved, the obviously ethical choice is full or otherwise unhindered federal legalization. A Prolonged Recession May Benefit Aurora Cannabis StockVery few companies or sectors have performed well in recent weeks, and that goes for marijuana companies. When you have the Dow Jones dropping 800 points in a single session, you know investors have serious concerns. Under such an environment, most stocks simply plummet in a panicked reaction.Unfortunately, many if not most of the names that recently experienced volatility will probably suffer more along the road. In this brave new world of globalization, our economy doesn't operate in a vacuum. Increasingly, we are more dependent on each other.And that's really the underlying pain of the U.S.-China trade war. Of course, when you're talking about China, you must engage delicately. As you know, President Trump hardly adopts tactful diplomacy.But when one of the reasons why I like Aurora Cannabis stock in this environment is that China is not in the picture. Indeed, it's never been in the picture. For instance, China has draconian drug laws, and that probably won't change in our lifetimes.Put another way, marijuana is one of those rare industries that is both vibrant and doesn't have a care in the world about China. This dynamic also incentivizes federal legalization, especially if people get laid off from trade-impacted industries. Technicals Support a ComebackAdmittedly, the volatility in the weed market is nothing short of scary. Even a top-shelf name like ACB stock isn't immune from extreme hemorrhaging. Since mid-March of this year, shares have lost a staggering 38%.However, I also feel that the sector is either at or approaching a bottom. Right now, we have no shortage of downright terrible news weighing on weed. Off the top of my head, we've had a slew of disappointing earnings results. We also witnessed credibility-damaging controversies, such as CannTrust's (NYSE:CTST) illegal growing.If that weren't bad enough, the FBI is actively courting whistleblowers for bad marijuana players. * The 10 Best Marijuana Stocks to Buy Now Yet despite the overwhelming negativity, ACB stock has slowed its descent. This, along with the other tailwinds I mentioned, gives me confidence that Aurora Cannabis can buy itself the required time.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 * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post 3 Compelling Catalysts for Aurora Cannabis Stock appeared first on InvestorPlace.
Soon countries all over the world may one day have their very own “Juul rooms,” as the embattled e-cigarette company is looking to expand their markets overseas. Vapor Trails JUUL Labs has filed paperwork with the Securities and Exchange Commission revealing that it has raised $325 million in equity from investors to expand its operations across the globe. Nicotine kings Altria own 35% of JUUL, which dominates the electronic cigarette game, with control of 71% of the U.S. market. But heavy is the head that wears the crown, as plenty of political leaders aren’t too happy with the company’s success. Crown JUUL? After news began to spread that America’s teenagers are rapidly beginning to get hooked on JUUL (so much so that the CEO Kevin Burns apologized to parents, and the New York Times reported that 21% of high school students say they’ve vaped within the past 30 days), the Food and Drug Administration began cracking down on e-cigarette sales, and states such as Connecticut and North Carolina have begun investigating the company’s attempts to market to young people. And now the Center for Disease Control has weighed in, announcing an investigation into a “cluster” of lung illnesses that could possibly be related to e-cigarette use. The CDC said 14 states have reported 94 different cases of "severe pulmonary disease" that could possibly be related to vaping, mostly among teens and young adults. The FDA is also investigating reports of seizures amongst e-cigarette users. Flee The Scene While many companies look to expand their reach across the globe, this is a pattern for JUUL, which began expanding into South Korea, the Philippines, and Indonesia after the company’s hometown of San Francisco, approved an ordinance to ban the sale of e-cigarettes until companies get approval from the U.S. Food and Drug Administration. -Michael Tedder Photo by Mike Segar/REUTERS
The second full week of August 2019 might go down in the history books as a turning point. This was when the benchmark Dow Jones index absorbed an 800-point drop, the worst day so far this year. Naturally, the volatility impacted already beleaguered marijuana stocks.In my view, the cannabis market suffered from a two-pronged attack. First, it takes a brave soul to go against broader market bearishness. Obviously, there were few takers of the contrarian approach. Second, cannabis players delivered poor earnings results. That sent skeptical investors to run for the exits, turning marijuana stocks to buy into something else entirely.As a weed bull, I'm of course very disappointed. However, I think this presents an opportunity to consider the bigger picture for marijuana stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsPrimarily, U.S. public attitudes toward the maligned plant have shifted dramatically, with a majority supporting legalization. Just maybe, risk-takers can profit handsomely by putting red-inked cannabis companies on their list of stocks to buy now. * 10 Cheap Dividend Stocks to Load Up On Furthermore, I'm very encouraged at the political situation as it pertains to marijuana stocks. Last year, the farm bill was one of the few pieces of legislation that earned consensus support. And if the Trump administration won't push for legalization, Democratic presidential candidates will.To the above point, because legalization is so popular, Trump might have to cede some ground here. If that's the case, you don't want to leave cannabis out of your stocks to buy list.Finally, marijuana stocks represent job creation. As the industry takes off, it'll create new, associated jobs, such as cannabis-testing services.So, don't give up on weed yet. Here are the ten best marijuana stocks to buy now: Aurora Cannabis (ACB)Aurora Cannabis (NYSE:ACB) is easily one of the top names among marijuana stocks. However, the recent price action for ACB stock belies its reputation. Things got even uglier for the company when it announced an expansion of its credit leverage, totaling approximately 360 million CAD.Why such a dour response toward ACB stock? A familiar theme has popped up regarding the sea of disappointing earnings reports of late. Investors no longer want to hear about a good narrative or potential opportunities. Instead, they want evidence of traction.Further, they'd like companies like Aurora Cannabis to shore up their operations and financials before taking on bigger risks. Thus, a combination of fear and a lack of credibility has hurt ACB stock.Granted, we're in an ugly state of affairs for marijuana stocks. That said, ACB stock does have a tremendous ace up its sleeve: dominance in international presence. As medical cannabis legalization takes hold in other parts of the world, Aurora is well-positioned to take advantage.Thus, this fallout provides a case to put ACB on your list of stocks to buy now. Canopy Growth (CGC)Source: Shutterstock As I mentioned above, investors have punished Canopy Growth (NYSE:CGC) and CGC stock due to a recurring theme: fundamentally, marijuana stocks have not been able to convincingly deliver the goods. More critically, the markets shined a spotlight on Canopy Growth for its fiscal first-quarter earnings report. The results weren't great.Canopy couldn't live up to consensus earnings expectations. Given broader weakness among marijuana stocks in this area, that's no surprise. However, what really concerned investors and industry observers was that Canopy may have lost their lead in the Canadian recreational cannabis market. That was one of the few fundamental strongholds that management claimed in prior reports. With that apparently gone, Wall Street dropped CGC stock like a bad habit.I don't think anyone - even the weed bulls - will claim that CGC stock is a compelling investment at this juncture. However, for risk-tolerant speculators, I believe Canopy still presents a viable opportunity. For instance, the company has been aggressively pushing into the U.S. market, investing in diverse products such as edible cannabis. * 10 Undervalued Stocks With Breakout Potential Admittedly, Canopy will require substantial patience. However, the believability of its narrative means it belongs on a speculative list of stocks to buy now. Cronos Group (CRON)Source: Shutterstock Among major marijuana stocks, many investors consider Cronos Group (NASDAQ:CRON) as the most credible investment. Certainly, the biggest factor in this positive reputation comes from tobacco giant Altria (NYSE:MO). Known worldwide for its Marlboro brand, Altria plunked $1.8 billion for a 45% stake in CRON stock.As our own Will Ashworth stated, CRON stock is still a "brilliant" buy for Altria. However, individual weed investors have a different sentiment. Like other marijuana stocks, Cronos has charted an ugly trend channel over the trailing half-year period.Again, a significant factor in the bearishness is credibility and fundamental justification. Currently, CRON stock sports a market capitalization of $4 billion. However, with recent quarterly revenue topping out at less than $8 million, investors don't see the rationale for the premium.It's a fair point. But it's worth noting that CRON stock has always been a play toward the ultimate U.S. marijuana market. And management is making huge strides toward this lucrative arena. A great example is their $300 million buyout of Lord Jones, a U.S.-based hemp and cannabidiol (CBD) beauty products manufacturer.Essentially, if legalization momentum continues in the American cannabis space - and that really looks to be the case - then Cronos should skyrocket. That's a good enough reason to consider placing CRON on your portfolio of stocks to buy now. Tilray (TLRY)Source: Shutterstock Analysts never expected medical cannabis specialist Tilray (NASDAQ:TLRY) to deliver a profit for its most recent earnings report. However, they didn't expect the kind of steep losses that management delivered. As a result, TLRY stock took a massive beating that shocked even weed advocates that are used to extreme swings.Even worse for TLRY stock, investors completely ignored some of the underlying company's positive news. For instance, Tilray's revenue came in much higher than consensus estimates. Unfortunately, the negative sentiment surrounding marijuana stocks was simply too much for the cannabis firm.The other reason why the markets adopted a dim view on TLRY stock is Tilray's home market. With disappointment being the key theme for marijuana stocks, it's becoming clear that the Canadian weed sector is reaching a saturation point.However, for interested speculators, I wouldn't extinguish TLRY from your stocks to buy radar. Ultimately, we all know that Canada is a limited market. The main goal here is the U.S., and Tilray has positioned itself for the very real possibility of legalization. * 15 Growth Stocks to Buy for the Long Haul For example, Tilray bought Manitoba Harvest for $317 million. Billed as the world's largest hemp-based foods manufacturer, Manitoba represents a viable platform for Tilray to expand into the CBD food and beverages market. Hexo (HEXO)Source: Shutterstock According to many observers, Hexo (NYSE:HEXO) delivered disappointing revenue for its fiscal Q3. I'd argue that the sales haul wasn't disappointing at all. However, Hexo released their earnings results at a time when investors were seeking substance from marijuana stocks. Unfortunately, they couldn't come through against these elevated expectations, and HEXO stock fell as a result.Technically, HEXO stock has another problem. Hexo is one of the smaller outfits among marijuana stocks. Currently, its market cap is just a little over $1 billion and generates quarterly sales of around $10 million. Yet the company is making heavy investments which worry onlookers.Obviously, HEXO stock isn't for the faint of heart. This is really a gamble that its expansionary efforts will pan out quicker than its cash burn will destroy it. Given the political momentum behind marijuana stocks, I like my chances. Hexo has many cogs in play, including a partnership with Molson Coors (NYSE:TAP) to develop CBD beverages. Green Organic Dutchman (TGODF)Source: Shutterstock Hands down, Green Organic Dutchman (OTCMKTS:TGODF) has the coolest name among marijuana stocks to buy now. Unfortunately, that hasn't helped its case in the markets. Like other players in this sector, TGODF stock has taken a dive since early spring of this year. That said, it has weathered the recent storm better than most.Is that a clear sign to jump onboard TGODF stock? As a speculator, I believe Green Organic Dutchman offers serious potential. However, those with a more conservative outlook should be careful. With a price tag of less than $3, TGODF is under the law of small numbers. Any downturn in this segment could exponentially hurt shares.Fundamentally, prospective buyers should note that Green Organic Dutchman is not yet profitable. Still, I do like the fact that for its Q2 report, it sequentially grew revenue 20% from Q1. Much of that growth spurt came from European demand for Green Organic's premium-label cannabis products. * 10 Stocks Under $5 to Buy for Fall Additionally, the company just hatched their "Grower's Circle" project aimed at capturing market share for Canadian medical marijuana. Of course, TGODF stock is highly speculative, but there's also justification for this risk. Charlotte's Web (CWBHF)Source: Shutterstock Charlotte's Web (OTCMKTS:CWBHF) is one of those rare names among marijuana stocks to buy now that has a broader positive trajectory in the markets. Year-to-date, CWBHF stock is up 96%. Shares have also recovered much of the losses incurred during the spring season.Despite this encouraging positive, Charlotte's Web couldn't avoid a recurring headwind in this segment: disappointing earnings results. For its Q2 report, the company missed on both profitability and revenue consensus estimates. Immediately, CWBHF stock took a dive.Still, let's look at some positives for the CBD specialist. Headquartered in Colorado, CWBHF stock levers a geographic advantage. Other, mostly Canadian weed firms are aggressively working their way in. Charlotte's Web is already here.More importantly, this isn't just a statistic. Charlotte's Web has made good on this advantage, securing retail deals with CVS Health (NYSE:CVS) and Kroger (NYSE:KR). In my opinion, this is one of the most impressive set of deals in the CBD space. Therefore, CWBHF stock deserves serious consideration for your portfolio of marijuana stocks to buy now. CV Sciences (CVSI)Source: Shutterstock Although a long shot among speculative marijuana stocks, CV Sciences (OTCMKTS:CVSI) brings a compelling narrative to the table. As a pharmaceutical company, CV Sciences could disrupt its industry by forwarding therapies based on natural formulations, not artificial concoctions.Unfortunately, the markets have not found this narrative convincing enough. Along with broader credibility questions impacting the cannabis market, CVSI stock has incurred a worrying amount of red ink. Logically, this is only a name that gamblers should consider.Further, CVSI stock has a current price tag just over $3. Any bearishness could plummet shares. At the same time, positive catalysts could spark a massive upswing.It's this latter point that attracts speculators. Plus, the political situation somewhat favors CVSI stock. Over the years, the opioid crisis has gutted several cities across America. And what was the cause of this crisis? Pharmaceutical products levering unintended consequences. * 10 Best Stocks to Buy and Hold Forever With a focus on natural CBD-based therapies, I think the general public will give a fair shot to the concept. After all, most Americans already support marijuana legalization. Aphria (APHA)Source: Shutterstock Weed player Aphria (NYSE:APHA) used to be one of the high-flying marijuana stocks to buy now. However, a short-seller's report accusing the company of being a shell game plummeted APHA stock. It also sent ripples throughout the industry. This wasn't the first time that critics have questioned the legitimacy of cannabis businesses, and it won't be the last.What was especially damaging was that some of the accusations stuck. In the aftermath, high-level executives, including the CEO, resigned from their posts. Moreover, Aphria promised a line-by-line rebuttal of the charges, but they never came to fruition. Even now, management is coy about the matter. Essentially, Aphria is doing everything it can not to address this incident, which hasn't helped APHA stock.Of course, this is one of the riskiest names among marijuana stocks. Still, I can't get something out of my mind: current CEO Irwin Simon, who came over from Hain Celestial (NASDAQ:HAIN), is taking a serious reputational risk with Aphria. That he's willing to initiate the recovery process leads me to have some confidence in APHA stock. Aleafia Health (ALEAF)Source: Shutterstock At the end of our list of marijuana stocks to buy now, I'm going to present my most speculative idea. A healthcare enterprise focusing on cannabis-based therapies, Aleafia Health (OTCMKTS:ALEAF) levers a vast network of clinics and patients. And these stats have jumped to 40 clinics and approximately 60,000 patients with its all-stock acquisition of Emblem. Thus, ALEAF stock offers a valid fundamental case.However, that hasn't panned out so well in the markets this year. ALEAF stock is down over 20% YTD. Additionally, this is a true penny stock, with shares trading hands under a buck. Naturally, with such a cheap asking price, you can expect tremendous volatility. For now, that volatility has shoved ALEAF deep down in the gutter, Pennywise style.However, I still see some positives. For one thing, volume is relatively robust for such an offering. Second, it appears that ALEAF stock has found support around the 80-cent level. Of course, this is no guarantee considering the share price. But the combination of a sound business and a supportive political environment makes ALEAF a compelling gamble.As of this writing, Josh Enomoto is long HEXO and ALEAF. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post The 10 Best Marijuana Stocks to Buy Now appeared first on InvestorPlace.
Every investor in Altria Group, Inc. (NYSE:MO) should be aware of the most powerful shareholder groups. Institutions...
There's no sugarcoating the truth here. It has been an awful few weeks for pot stocks, particularly the cannabis market leader, Canopy Growth (NYSE:CGC). At the end of April, CGC stock was flying high above $50 - up 90% year-to-date, as investors were getting excited about Canopy's potential entry into the what-will-be-huge U.S. cannabis market. Two bad earnings reports later, the stock has come crashing down.Source: Shutterstock Today, CGC stock trades hands below $30 - nearly 50% off its late April highs, and up just 5% year-to-date, versus a 90% year-to-date gain back in April.If that's not a crash, I don't know what is. Indeed, the crash has been so bad that some bulls have thrown in the towel.InvestorPlace - Stock Market News, Stock Advice & Trading TipsI get it. Stomaching a 50% crash over four months is not an easy thing to do. It does leave one feeling somewhat hopeless, dejected, and unwilling to double down.But, that's exactly what I'm doing here -- doubling down. Investors have to see the forest for the trees here. All this near-term volatility is just noise. Who really cares if Canopy grew sales by 200% or 250% last quarter? Or if gross margins were 20% or 25%? All that really matters is that Canopy continues to position itself as the profitable leader in what will one day be a multi-hundred billion dollar global cannabis market.Canopy is doing just that, and because they are, there is still visibility for Canopy to one day be a $50 to 100 billion company. CGC stock has a market cap of under $10 billion today. Thus, the long-term investment implication is simple: buy on weakness and hold for the long haul. Early Innings for Pot's Global GrowthWhen it comes to CGC stock, investors need to see the big picture here and if they don't want to do that, they probably shouldn't even be looking at the cannabis space at all. * 10 Stocks Under $5 to Buy for Fall The big picture here is that you have a cannabis industry that is in the top of the first inning of a multi-year, global growth narrative. Only one major developed economy has fully legalized cannabis (Canada), where it has been fully legal for less than a year, and that economy is considered one of the smaller fish in the global market. Judging the long-term fate of a cannabis company because they missed sales or earnings estimates last quarter seems … foolish.Doing so would be focusing on a tree. Instead, investors need to take a step back, and look at the forest. Here's what the cannabis forest looks like. There is an overwhelming amount of data out there which implies that cannabis consumption is: on a secular uptrend; nearly as pervasive as alcohol and tobacco consumption; and, in many instances, preferred to alcohol consumption among younger consumers.At the same time, governments around the world are becoming open to consideration of cannabis as a "safe drug" and are gradually progressing toward full legalization. Combining those two observations, the implication is clear: the global cannabis market will be fully legal one day, and when that happens, it will be huge -- like global alcohol and tobacco markets huge. Canopy Growth Stock Still Projects as a Long-Term WinnerThe global alcohol and tobacco markets are several hundred billion dollar to trillion dollar markets. The cannabis market will be that big one day.Each of those markets has also produced several $50 billion to $100 billion-plus companies. See Anheuser-Busch (NYSE:BUD), Diageo (NYSE:DEO), or Heineken (OTCQX:HEINY) in the alcohol world. See Altria (NYSE:MO) and Philip Morris (NYSE:PM) in the tobacco world.The cannabis market will similarly produce several $50 to $100 billion-plus companies at scale. Canopy Growth will be one of them.Even the company's former CEO, Bruce Linton, unceremoniously booted out last month as Canopy's co-CEO and board chair, told BNN Bloomberg he was a buyer of CGC stock after the shares fell on August 15.Right now, Canopy is the biggest cannabis company in the fully legal Canadian market. It also has the largest balance sheet, with the most cash firepower to increase production capacity, expand global distribution, penetrate other cannabis markets, and invest in next-gen product R&D -- overall, sustaining and expanding its leadership position.Canopy is doing all of those things. The company's harvest amounted to more than 40,000 kilograms last quarter -- no one else in this space even comes close to touching that number. Canopy has a deal to acquire Acreage once the U.S. market becomes fully legal, giving the company a clear pathway to penetrating the U.S. market. They also poured over C$8 billion into R&D last quarter. Competitor Tilray (NASDAQ:TLRY) spent less than $2 billion CAD ($1.5 billion) on R&D in the overlapping quarter.In other words, Canopy is doing everything it needs to do in order to be the Anheuser-Bush or Altria of the cannabis world. Big picture, that means CGC stock remains on track to have a $50 billion to $100 billion-plus market cap one day. The market cap today? Under $10 billion. For long-term investors who are willing to ride out the volatility, the implication is clear: buy on weakness and hold for the long haul. Bottom Line on CGC StockWhen it comes to CGC stock, investors need to see the forest for the trees.True, it has a caretaker CEO after Linton fell out with shareholder Constellation Brands (NYSE:STZ), but there are indications that Canopy is looking at candidates from the consumer, pharmaceutical, alcohol and even technology sectors, according to BNN Bloomberg. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond But put that aside for a minute. As well, forget today's depressed gross margins. They are depressed because Canopy is spending an arm and a leg to lay the foundation for long-term growth. Forget today's slowing growth trends. Growth is slowing because Canopy is more focused on maximizing long-term growth, not supercharging near-term improvements.Instead, understand that Canopy is laying the groundwork to become a $50 billion to $100 billion-plus company one day.I get that it's tough to do that on the heels of a 50% sell-off over the past four months. But, CGC stock is still up 5% since January 2019, 20% since January 2018, and 300% since January 2017. So, again, the best thing here is to zoom out and contextualize everything.When you do that, it becomes clear that Canopy is still a winning company, and that CGC stock still has tremendous long term potential.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Why I'm Still Bullish on Canopy Growth Stock for the Cannabis Long Term appeared first on InvestorPlace.
U.S. e-cigarette maker Juul Labs Inc has raised $325 million in an equity and debt offering to speed up its global reach at a time of intense regulatory scrutiny in its home market. The company did not break out the ratio of equity and debt offered, but a source familiar with the matter told Reuters that Juul sold convertible debt in a bridge financing to bolster its balance sheet. Juul, 35% owned by Marlboro maker Altria Group Inc, has over the past year focused its efforts on growing outside the United States, as American regulators increase oversight of e-cigarette products that are wildly popular among teenagers.
Juul Labs, the US ecigarette start-up, has raised $325m in fresh funding as it plans international expansion and faces growing scrutiny from politicians and regulators at home. The cash was raised through a bridge financing structured as a convertible note, said three people familiar with the deal, a form of debt that start-ups sometimes use to raise money between equity sales. Tiger Global Management, which led an investment valuing the company at $15bn last July, participated in the new debt offering, one of the people familiar with the transaction said.
The recent market drop has certainly been brutal and quite broad. But then again, this bear move is opening up interesting opportunities.Just look at the cannabis space. In fact, the downturn of marijuana stocks preceded the recent decline of the overall markets, as various public cannabis companies had a tough time meeting investors' lofty expectations.In yesterday's trading, Canopy Growth (NYSE:CGC) was, at one point, off 10.5% to $28.60 (the stock was over $50 a few months ago). That was after the stock had dropped 6.6% the day before. And on Wednesday, Tilray (NASDAQ:TLRY) dove 15%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe declines were kind of scary. But when it comes to investing, going against the grain can mean getting strong returns.One marijuana stock that should get attention is Hexo (NYSE:HEXO). Since late April, Hexo stock price has gone from $8.30 to $4.47.But HEXO has a number of positive characteristics. First of all, HEXO has gotten validation from Molson Coors (NYSE:TAP), which has formed a partnership with the cannabis company. The focus of the deal is developing a line of cannabis-infused beverages that will hit the market on Dec. 16th ( when such drinks will be legalized in Canada).All in all, the deal should provide Hexo stock with a nice catalyst. TAP will leverage its extensive marketing and logistical capabilities on behalf of HEXO's products. TAP's creative skills should help HEXO develop compelling products. The partnership really does look like a win-win.This is what the CEO of Molson Coors of Canada, Frederic Landtmeters, had to say about the deal: "We look forward to partnering with HEXO, a recognized leader in the medical cannabis space in Canada that will bring robust production capacity, a track record of innovation, and, most importantly, shared values when it comes to doing business the right way and earning the trust of consumers."But ultimately this is about more than just Canada. Because of the U.S. Farm bill, Hexo will be able to launch CBD-based drinks in eight states next year. Key AdvantagesThe TAP deal illustrates a main benefit of HEXO: the company's high production output. Note that it has about 30% of the Quebec market.Another critical factor is that HEXO acquired Newstrike Brands Ltd for $197 million. As a result of the deal, Hexo boosted its annual capacity by about 150,000 kilograms.Now it's true that Hexo stock is not without its issues. The company's last earnings report was a major disappointment. It revenue came in at 13.02 million CAD, representing a quarter-over-quarter drop of about 9%. while the Street was looking for $14.8 million.But the cannabis industry is still in the early stages, so choppy results are normal. Then again, the industry's fundamentals remain bright. That is why companies like TAP, Altria (NYSE:MO) and Constellation Brands (NYSE:STZ) have invested billions in the category. The Bottom Line on Hexo StockWhen it comes to the cannabis space, I think the key is to focus on the dominant players. Size will certainly be essential, given the competitive environment. And HEXO looks well-positioned to perform well over the long-haul.Yet the volatility of Hexo stock price will likely remain high. That is why it's a good idea to take moderate positions - or dollar-cost average - to help mute the wide swings of HEXO stock.Tom Taulli is the author of the 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 * 10 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Is Hexo Stock a Falling Knife Or Has It Reached a Good Entry Point? appeared first on InvestorPlace.
Altria, (PM) (PM), and their overseas peers are all preparing for a day when cigarettes aren’t their main products. Altria stock has fallen 7.6% year to date, as investors remain skeptical of its investments in vaping startup Juul Labs, the nicotine pouch product on!, and cannabis company Cronos Group (CRON). On Thursday, the FDA issued a new proposal that would introduce new graphic warnings on packs of cigarettes and advertisements to stress further the health risks of tobacco use and highlight lesser-known side effects.
High-yield dividend stocks have gained even more allure lately in the face of shrinking bond yields. However, while a handful are ready buys right now, several more sport alluring yields - at least 5%, and up into the double digits - but need a little more time to simmer before it's time to dip in.Patience is a virtue in life. That's particularly true in the investing world. It's even true across investing disciplines. Sober value investors wait for their price before buying, but disciplined market technicians also know to wait for the proper setup before trading.Sometimes, you need to wait for a fundamental catalyst to make your trade worth making. Other times, it's simply a matter of waiting for the right price. But the key is having the self-control to wait for your moment. Lack of patience can be a portfolio killer."We tell our clients during the onboarding process that we won't be investing their entire portfolio on day one," explains Chase Robertson, Managing Partner of Houston-based RIA Robertson Wealth Management. "We tend to average into our portfolios over time as market conditions warrant, and we're not opposed to having large cash positions. Our clients thank us in the end."Today, we're going to look at 13 high-yield dividend stocks to keep on your watch list. All are stocks yielding over 5% that you probably could buy today, but all have their own unique quirks that might make it more prudent to watch them a little longer rather than jump in with both feet. SEE ALSO: 57 Dividend Stocks You Can Count On in 2019
Altria (MO) stock has dipped roughly 5% so far in 2019, underperforming the broader market. MO stock is trading about 10% above its 52-week low price.
As marijuana stocks have struggled in recent months, much of the attention has revolved around Aurora Cannabis (NYSE:ACB). The company has made several key acquisitions to make itself the world's largest producer of dried marijuana. This should help ensure its future as competition forces the takeovers and bankruptcies of smaller players.Source: Shutterstock However, Aurora Cannabis is not Aurora Cannabis stock. The company's expansion has cost shareholders in share price declines and dilution of the equity. Until Aurora can fund growth through profit, investors should avoid ACB stock. Aurora Cannabis Should Remain a Top Canadian Marijuana CompanyAurora remains one of the more robust companies in this sector. As mentioned earlier, it leads in production, cultivating larger quantities of dried cannabis than even Canopy Growth (NYSE:CGC). Aurora Cannabis also operates in 25 countries.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDue to the oversupply of dried cannabis, it has rightly decided to turn its focus away from Canada and the U.S. The recent deal to provide 400 kilograms of medical marijuana to the Italian government pales in comparison to 25,000 kilograms of quarterly production. However, it constitutes a start to pare down the supply glut. * 15 Growth Stocks to Buy for the Long Haul Aurora gave investors a preview of the report to come as it issued fourth-quarter guidance. The company estimated quarterly production would come in between 25,000 and 30,000 kilograms. Analysts had expected 25,000 kilograms. Revenue guidance of between 100 million CAD ($75.15 million) and 107 million CAD fell short of the consensus 112 million CAD. Still, it represents massive growth from the 19.1 million CAD reported in the same quarter last year. Aurora's Growth Comes at the Expense of ACB StockHowever, what is suitable for a company may not benefit their stock. That seems especially true for Aurora Cannabis. I have long expressed concerns about high valuations. In a bull market, investors may tolerate high multiples in emerging sectors.However, the valuation faces pressure on more than one front. Turmoil related to the U.S.-China trade war and the protests in Hong Kong has brought the overall market down in recent days. With ACB stock trading at more than 53-times sales, both Aurora Cannabis and its high-value peers could face a steep drop on that factor alone.Analysts have also begun to notice. Piper Jaffray just initiated coverage. Despite speaking favorably about its "industry-leading capacity" and higher gross margins compared with its Canadian peers, it handed Aurora Cannabis with a "neutral" rating. It also thinks ACB stock trades at a premium compared to Canopy, Cronos Group (NASDAQ:CRON), and Tilray (NASDAQ:TLRY).Secondly, I have criticized Aurora Cannabis stock in past articles due to the massive dilution. There I cited the growth in shares outstanding from 129 million in 2016 to over one billion today.Our own Vince Martin believes the company will dilute Aurora Cannabis stock further. Barring a massive rise in the stock price, Aurora will have to pay back 230 million CAD ($172.9 million) of debt on March 9, 2020. ACB will likely have to issue more shares to pay this debt. As long as Aurora Cannabis stock bulls have to contend with significant amounts of dilution, they will find it difficult to profit from ACB. Final ThoughtsInvestors should avoid ACB stock until the company earns quarterly profits. Investors need to remain aware of the differences between Aurora Cannabis the company and its stock. With the number of shares growing by about eight-fold in three years, gaining traction with shares has become difficult.However, the dilution has benefitted Aurora Cannabis. The cash raised helped to fund 15 acquisitions, including the 3.2 billion CAD ($2.4 billion) MedReleaf deal. This has made Aurora a world leader in weed production and has given the company a presence in several countries.One day, after the hype around marijuana stocks has abated, I think ACB stock will become a profitable investment. Once it earns profits and pays dividends, it could even become the Altria (NYSE:MO) of weed. However, at this price level and under these conditions, investors should stay away from Aurora Cannabis.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 * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post ACB Will Not Benefit From The Growth of Aurora Cannabis, Yet appeared first on InvestorPlace.
The U.S. Food and Drug Administration has proposed that cigarette packs carry graphic new health warnings including pictures and text outlining lesser-known risks of smoking like bladder cancer and diabetes as well as lung cancer. The FDA said the proposed changes, which also drastically increase the size of the warnings, could be the most significant to cigarette labels in more than 35 years. The proposal also applies to cigarette advertisements, and would add 13 new warnings, along with colored pictures that outline the risk of diseases associated with smoking.
Buy Philip Morris stock over Altria, Bernstein says. But with plenty of uncertainty across the tobacco landscape, investors in these stocks may need to be ready for anything.
The bumpy ride for Cronos (NASDAQ:CRON) stock investors continued this week when the cannabis stock got some more love from Wall Street. On Monday, Piper Jaffray analyst Micael Lavery initiated coverage of Cronos Group stock with an "outperform" rating and $18 price target.Lavery's initiation note was 29 pages long. However, the bull case for Cronos boils down to three main points.Source: ShutterstockInvestorPlace - Stock Market News, Stock Advice & Trading Tips CRON Stock Has a Big BrotherWhile other cannabis producers are out there trying to grow their business organically, Cronos has a perfect benefactor. In December 2018, tobacco giant Altria (NYSE:MO) invested $1.8 billion for a 45% stake in Cronos. In my opinion, the Altria partnership is the single biggest reason to consider CRON stock."We believe its partnership with Altria provides important capital ($1.8 billion cash) and access into 230,000 U.S. retail outlets, as well as regulatory and vapor product expertise," Lavery wrote. * 15 Growth Stocks to Buy for the Long Haul I would add two points to Lavery's case. U.S. (and potentially global) cigarette volumes are seemingly in secular decline. In other words, Altria needs Cronos as much as Cronos needs Altria. Tobacco companies are starving for growth. Cannabis could be a long-term lifeline.Second, Cronos Group stock investors hoping for U.S. cannabis legalization should realize one thing about their investment. They are investing in a tobacco company. As part of the terms of its 45% investment deal, Altria has the rights to take a full ownership stake at some point down the line.In my opinion, whether or not Altria exercises that option hinges on U.S. cannabis legalization. Without access to the U.S. market, Altria may not want to fully acquire Cronos. But if the U.S. ultimately legalizes weed on a federal level, I bet Altria's first move is a Cronos takeover.Progressive CRON stock investors may not like the idea of a tobacco takeover. But if the future of Altria is cannabis, at some point Altria is no longer a tobacco company at all. CBD Provides CRON Access to U.S. MarketAll cannabis stock investors know that U.S. federal marijuana legalization is the golden ticket. In the meantime, cannabidiol (CBD) may be the best way for Canadian producers like Cronos to get their foot in the U.S. door.CBD is a non-psychoactive, cannabis-derived chemical compound that was legalized in the U.S. in December 2018. The caveat is that only CBD produced from hemp, not marijuana, is legal. Lavery is expecting Cronos to use its $1.8 billion in Altria capital to launch a U.S. CBD strategy within the next year. In fact, he is projecting 60% of Cronos' 2020 revenue will come from CBD. Cronos Group's Brand AwarenessThe third big feather in Cronos Group's cap is its recent $300 million buyout of Redwood Holdings, parent company of early CBD brand leader Lord Jones.For millennial investors who are a fan of alternative data, Lavery included a cool statistic on Lord Jones in his note. Lord Jones alone has nearly 80,000 Instagram followers. That's more followers than the leading brands of popular cannabis stocks Tilray (NASDAQ:TLRY), Charlotte's Web Holdings (OTC:CWBHF) and Curaleaf Holdings (OTC:CURLF).It may seem like a trivial statistic, but social media popularity is an important measure of brand popularity. Marketing experts know brands are the key to success in untapped markets like the U.S. If Lord Jones becomes one of the gold standards in U.S. CBD, don't be surprised if Cronos/Altria markets its marijuana under the Lord Jones brand in the event of U.S. legalization. Understanding the Risks of CRON StockThe one thing I always try to include in my stories about cannabis stocks is a note about the risks involved in investing. There are so many uncertainties in the cannabis space right now. As if that weren't enough of a risk, cannabis stock valuations are sky-high, likely including at least some expected value from the U.S. marijuana market.Instead of rehashing points I've repeatedly made, here's Lavery's take:"We see a long runway of growth in the cannabis space, but valuation still has many speculative elements and can be very imprecise, given the early stages of the category and the myriad ways it could evolve," he wrote.Lavery makes some good points about buying CRON stock. However, any cannabis stock is a pure speculation at this time and these valuations. Don't invest any cash you wouldn't be comfortable losing in a worst-case scenario.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 15 Growth Stocks to Buy for the Long Haul * 5 More Cloud Stocks With Plenty of Potential * 5 Clean Energy ETFs to Buy for 2019 The post 3 Reasons to Love Cronos Stock appeared first on InvestorPlace.
United States equities are catching a break Tuesday after President Donald Trump blinked and ordered the new 10% tariff on all remaining Chinese imports be delayed to December on certain high-profile items like cell phones and computer monitors. Yes folks, that means Apple (NASDAQ:AAPL) iPhone prices are safe -- for now.Ostensibly, this was done to ensure that measured inflation averages don't rise. This keeps the pressure on the Federal Reserve to consider further interest rate cuts to weaken the dollar and sends stocks higher. * 7 Safe Dividend Stocks for Investors to Buy Right Now That's resulting in a big relief bid in the market, bolstering a number of defensive high-dividend stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHere are four worth a look right now: Dividend Stock to Buy: Philip Morris International (PM)Shares of Philip Morris International (NYSE:PM) were recently upgraded by Barclays analysts who are looking for a $100-per-share price target. While the company has been hurt by the rise of JUUL and other vaping competitors, it is responding with its own smoke-free products such as Marlboro's IQOS and HEETs. PM stock is enjoying a bounce off of its 50-day and 200-day moving averages.The company will next report results Oct. 17 before the bell. Analysts are looking for earnings of $1.37 per share on revenues of roughly $7.7 billion. When the company last reported July 18, earnings of $1.46 per share beat estimates by 13 cents on a 0.3% decline in revenues. The company pays a 5.5% dividend. Altria Group (MO)Altria Group (NYSE:MO) is the parent company of Philip Morris USA and Philip Morris International, the latter of which was spun off in 2008. That move freed Altria of Philip Morris USA's legal and regulatory constraints.MO stock is currently trading near the $46 per-share level, capping a long decline that started in early April. Altria stock has seen a roughly 18% loss from there. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What MO stock pays a near 7% dividend yield. Shares were recently upgraded by Goldman Sachs analysts from neutral to buy, with a $59 price target assigned. The company will next report results Oct. 31 before the bell. Analysts are looking for earnings of $1.14 per share on revenues of $5.3 billion. When the company last reported on July 30, earnings of $1.10 per share matched estimates on a 6.4% rise in revenues. Las Vegas Sands (LVS)Shares of casino operator Las Vegas Sands (NYSE:LVS) are finding their legs near the stock's early June lows around $52, setting up a rally to challenge its 50-day and 200-day moving averages and possibly push LVS stock back towards prior highs in the mid-$60s. Such a move would be worth a gain of around 20% from here.The company will next report results Oct. 23 after the close. Analysts are looking for earnings of 77 cents per share on revenues of $3.3 billion. When the company last reported July 24, earnings of 72 cents per share missed estimates by 7 cents on a 0.9% rise in revenues. The company pays a 5.7% dividend yield. Ford Motor Company (F)Ford Motor Company (NYSE:F) shares are basing near their 200-day moving average, setting up a rally to retest prior highs near $10.25 on the expectation that further interest rate cuts will boost auto affordability and thus demand. The company pays a 6.5% dividend yield.Ford will next report results Oct. 23 after the close. Analysts are looking for earnings of 27 cents per share on revenues of $34.4 billion. When the company last reported July 24, earnings of 28 cents per share missed estimates by 3 cents on a 0.4% rise in revenues.As of this writing, William Roth did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post 4 Big Dividend Stocks to Buy Now appeared first on InvestorPlace.
Cannabis stocks got a boost on Tuesday after a major Wall Street firm initiated bullish coverage of Cronos Group Inc (NASDAQ: CRON ). The Analyst Piper Jaffray analyst Michael Lavery initiated coverage ...
Shares of Tilray (NASDAQ:TLRY) stock will be in focus on Wednesday, after the company reports its quarterly results on Tuesday after the close. With cannabis stocks in focus lately, a strong quarter would go a long way to helping reverse the price action in TLRY stock and potentially turning the group around.Source: Shutterstock Cannabis stocks tend to be volatile, as there are a lot of considerations in play. There's the M&A factor to consider, as large companies plunk down lots of cash to get involved in cannabis. Take Constellation Brands (NYSE:STZ) investing $4 billion in Canopy Growth (NYSE:CGC) (which reports later this week) or Altria (NYSE:MO) dumping $1.8 billion in Cronos Group (NASDAQ:CRON).There are also regulatory wins and worries to consider, as part of the bullish thesis lies with various governments becoming more open-minded to the benefits of cannabis. There's also the fact that while many of these names boast incredible revenue growth, they also carry huge valuation risks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAdd it all together and you get a volatile group of up-and-coming growth stocks. Tilray's QuarterAnalysts expect Tilray to lose 25 cents per share this quarter, responsible for roughly one-quarter of the full-year loss of 99 cents per share they are forecasting for 2019. However, so long as the cash burn isn't too high and the losses are not too wide, the bottom line is not the focus at the moment. * 7 Safe Dividend Stocks for Investors to Buy Right Now Instead, the focus is sales. In that respect, analysts have some incredible forecasts. They expect revenue to jump ~322% this quarter to $41.1 million. That's slightly higher growth than their full-year forecasts for 308% growth, with estimates calling for $176.1 million in 2019 sales.The question is, what will it take for it to matter? Should TLRY beat on both earnings and revenue, will it be enough to entice investors?If the climate of the market turns more bullish, rather than remaining fearful, a beat could fuel Tilray higher. If the markets return to a risk-off approach in the next few weeks or months though, TLRY, CGC, and other cannabis players may find their stocks out of favor with investors.Remember, this is a stock that trades with a market cap value of $4.3 billion. At $176 million in sales, we're talking about 24 times this year's revenue. The entity doesn't turn a profit, and while the growth rate is still strong, that's a big valuation. Expectations call for another 103% growth in fiscal 2020, but you can see why there may be some concern.Before we do anything, we have to see the quarter from TLRY. Perhaps more importantly though, we have to see how the stock reacts to the quarter, which will tell us where investors stand on the name.To do that, let's look at the charts. Trading TLRY Stock Click to Enlarge Tilray stock has been in a painful downtrend since erupting higher in Q3 2018. Since then, a series of lower highs has continued to squeeze the stock lower and lower (purple line). However, that mood changed in June.Shares bottomed near $34.25, chopping near that mark for several consecutive sessions. TLRY then went on to reclaim its 20-day and 50-day moving averages, pushing through downtrend resistance in the process. It hasn't been completely smooth sailing during that time, with shares falling along that prior resistance level until hitting the $39 area. The good news though? Prior resistance is now acting as support, while the stock registered a higher low (blue line). That allows us to put in a short-term uptrend line.TLRY stock is not completely out of the woods here, but its chart is looking more constructive.Should we get positive Tilray news from its quarterly results, see that shares stay north of the 20-day and 50-day moving averages. With any luck, TLRY can reclaim the $47 to $50 area, and possibly begin a march back to its 200-day moving currently near $67.If the reaction is negative, I would love to see uptrend support hold. However, one "must-hold" spot for me is $39.31, to keep the trend of higher lows in play. If that fails, bulls need to make sure Tilray stock doesn't fall back below prior downtrend support.Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Real Estate Investments to Ride Out the Current Storm * 7 Marijuana Penny Stocks to Consider for Those Who Can Handle Risk * 7 Safe Dividend Stocks for Investors to Buy Right Now The post Tilray Stock Is Looking for a Turnaround appeared first on InvestorPlace.
Although it is one of the most exciting sectors in the markets today, marijuana just can't catch a break. That sentiment extends to major players like Cronos Group (NASDAQ:CRON). Since March of this year, CRON stock has been fighting against a decidedly bearish trend channel. Seemingly with no bullish narrative on the horizon, weed investors just keep losing.Source: Shutterstock But what is driving the losses toward Cronos Group stock and its peers? No matter how you look at it, CRON has suffered from poor timing as bad news wracked the sector. Last month, Canadian cannabis firm CannTrust (NYSE:CTST) admitted that it had grown cannabis illegally in its facilities. The admission came after a Health Canada investigation.Even worse, the unlawful operation involved incredibly coordinated efforts. For instance, a CannTrust whistleblower reported that the company used fake walls to conceal the illegally grown cannabis. Initially, such tactics fooled Health Canada into believing everything was on the up and up.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Stocks Under $7 to Invest in Now But what do CannTrust's controversies have to do with CRON stock? The answer is both nothing and everything. At first glance, it seems almost unfair for the markets to penalize Cronos Group stock. Both people and corporations should be judged on their actions, not on their perception of such.However, as we all know, marijuana is a narrative-driven market. And when a New York Stock Exchange weed ticker sparks a scandal on this magnitude, it's impossible the downfall won't impact CRON stock.Adding to the woes is that Cronos, like other marijuana companies, produced half-baked performances in the recent earnings season. Combining the available evidence, Cronos Group stock simply looks like a loser. Narrative Angle a Double-Edged Sword for CRON StockWhile I truly believe that legal marijuana offers a paradigm-shifting opportunity for investors, it has unique vulnerabilities. As I mentioned above, this sector is narrative-driven. Bad news, even unrelated to your target equity, can impose a severe impact.Under this context, the second-quarter earnings report for CRON stock didn't help. Although the company produced impressive headline numbers, accounting for non-recurring benefits, it was a rather disappointing showing. When you consider that market observers were hoping that at least one of the cannabis players would drive home a fundamentally substantive report, it's understandable why the sector sank.Although it's easy to get down on Cronos Group stock because it's so sensitive to news items, we should remember this point: a strong narrative should likewise deliver robust results in the markets.Right now, I believe Wall Street is downplaying the potential of Cronos' recent acquisition of Redwood Holdings. An American hemp and cannabidiol (CBD) company specializing in beauty products, Redwood gives CRON stock a firmer foothold in the U.S. cannabis market.Also, it allows Cronos to expand Redwood's footprint while everyone waits for the U.S. to emerge from the Stone Age. As you likely know, marijuana remains a Schedule I drug. Therefore, we have a clash between federal regulations and individual state laws.However, hemp-derived CBD is federally legal. That's because the 2018 farm bill changed the federal definition of hemp. Thus, Cronos via its Redwood acquisition has a viable pathway to American CBD consumers.That is a very big deal. According to a recent cannabis research paper, CBD sales in the U.S. could surpass $20 billion by 2024. With such an opportunity, you can see why Altria Group (NYSE:MO) invested nearly $2 billion into CRON stock. American CBD Will Save Cronos Group StockOf course, I completely understand why many people are hesitant to approach CRON stock. Most of my bullish arguments revolve around legal marijuana's potential. But in the here and now, this sector is largely a disappointment.But that's the beauty of weed, isn't it? If we were trading on known factors, this market wouldn't be so volatile. And if we truly knew with reasonable confidence this sector's upper boundaries, very few would invest. Simply put, the financials don't justify the risk.However, those upper boundaries are technically unknowns. That said, I believe that the probabilities support further integration of CBD into the U.S. market, not less. For instance, public support has reversed to the positive for marijuana legalization. Also, some studies indicate that CBD consumers are older, more educated, and are typically gainfully employed.With CRON stock and similar investments, we ultimately have two choices: We can look at the current state of affairs, which admittedly is unfavorable. Or, we can gamble that the U.S. market will continue to open doors, both legally and commercially. But there's a big gap between those two arguments, which explains this sector's volatility.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 Large-Cap Stocks to Sell Right Now * 7 Stocks Under $7 to Invest in Now * 7 Marijuana Stocks With Critical Levels to Watch The post Narrative-Driven Cronos Group Stock Finally Has Good News appeared first on InvestorPlace.