202.48 0.00 (0.00%)
After hours: 5:17PM EDT
|Bid||202.83 x 800|
|Ask||203.13 x 800|
|Day's Range||201.50 - 203.74|
|52 Week Range||150.37 - 228.91|
|Beta (3Y Monthly)||1.14|
|PE Ratio (TTM)||16.06|
|Earnings Date||Oct 2, 2019 - Oct 7, 2019|
|Forward Dividend & Yield||3.00 (1.51%)|
|1y Target Est||225.77|
Millennial and Gen Z drinkers reveal they are ditching beer for hard seltzers like White Claw, because beer "makes them fat," according to a new survey.
Canopy Growth Corp. said Tuesday that Health Canada has awarded it an extraction license for its KeyLeaf Life Sciences facility in Saskatoon, Saskatchewan. The Canadian company, which is a market leader in the cannabis space thanks to a $4 billion investment from Constellation Brands Inc. , said the facility along with its Smiths Falls, Ontario site and recently licensed BC Tweed extraction site means it has three significant extraction assets to support development of new products. The Saskatchewan facility is expected to be online by fall of 2019 and to have the capacity to extract up to 5,000 kg of hemp or cannabis biomass a day. "This licence will ensure we have the supply of extraction inputs for the medical, CBD, and recreational markets, especially the next generation of value-add, high margin cannabis products here in Canada," Chief Executive Mark Zekulin said in a statement. Canada is gearing up to start offering edibles and other derivatives products in December. Canopy's U.S.-listed shares rose 2.9% premarket, but are down 0.6% in 2019, while the ETFMG Alternative Harvest ETF has gained 4% and the S&P 500 has gained 16.6%.
Canopy Growth stock has been praised by many analysts. Here’s what chart analysis shows about buying this marijuana stock right now.
To be fair, it sure feels like no cannabis stock is offering refuge of any sort these days, but Canopy Growth (NYSE:CGC) really drives home that point as the shares labor more than 52% below their 52-week high. Using the strict definition of a bear market -- a decline of 20% from the most recent high -- CGC stock is in a bear market 2.5 times over.Source: Shutterstock It has often been noted that cannabis stocks require some patience on investors' part, but it has also been pointed out that Canopy stock is one of the names that tries investors' patience. For awhile, analysts and investors were willing to sacrifice cannabis companies' profitability for growth, but when Aphria (NYSE:APHA) recently turned a profit, regardless of the reason, the timetable for profitability in the cannabis space got moved up in a big way."Names who can show a route to profitability (or are there now) have the greatest likelihood attracting near-term investor interest," Jefferies analyst Ryan Tomkins said in a note.InvestorPlace - Stock Market News, Stock Advice & Trading TipsIt's clear that investors will only prioritize growth for so long. It's becoming evident that profits, or at the very least, substantial revenue growth, are essential for cannabis companies to keep investors engaged. Tick Tock …Remembering that Canopy was the first well-known marijuana firm to ink a partnership with a big-name company, Constellation Brands (NYSE:STZ), and that it has a solid lineup of brands, such as Tweed, Spectrum Therapeutics, DNA Genetics, Doja and Maitri, makes the profitability all the more frustrating. * 8 Dividend Aristocrat Stocks to Buy Now No Matter What Some of Canopy stock's woes are self-inflected. There has been upheaval in the C-suite and little clarity on when the company will stop losing money. By some estimates, CGC will not show earnings before interest, taxes, depreciation and amortization until a year from now. And even then, investors should rightfully nitpick because EBITDA is a non-GAAP metric. The forecast for when Canopy will be truly profitable is far longer."Finally, we are aligned with Constellation Brands in the expectation that our consolidated operations will begin to deliver positive net income in the medium term that is within three to five years," Canopy CEO Mark Zekulin said on the company's recent earnings conference call.With Canopy stock trading at its lowest levels since January, the company can't have execution missteps as it had in the second quarter. As Zekulin pointed out on the conference call, Canadian customers were craving high-THC products in the quarter, but Canopy didn't have enough supply. Bottom Line on CGC StockExecution problems can be rectified, but when it comes to Canopy stock, there is some pause about the company's lack of execution in its home market of Canada, particularly as CGC has its eyes set on the lucrative U.S. market."Over the past two quarters, we have established offices in California and Colorado, and we'll soon be establishing offices in Illinois and New York," Zekulin said on the call. "We are currently involved in high-level discussions with key retailers in the United States, including being constructively involved with them as we collectively navigate the regulatory process. These investments in the U.S. CBD markets are significant."Canopy noted operational improvements in European markets including Germany, Poland, the Czech Republic and the United Kingdom.If Canopy Growth can show some operational excellence in the U.S. and those European markets, it would go a long way toward allaying investors' fears. Butt the bottom line is that revenue must increase and losses must decrease.As of this article, Todd Shriber does not hold 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 Canopy Growth Stock Is Not the Place for Near-Term Cannabis Refuge appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) failed to meet lowered earnings estimates but its problems have yet to hit its biggest owner. Constellation Brands (NYSE:STZ) bought 38% of the Canada-based marijuana company last year. It has warrants for CGC stock that would give it majority control.Source: Shutterstock But while Canopy shares are down by 25% from the $34.20 level they held the day before earnings were announced, Constellation shares have barely budged. They're down just $1 or about 0.5% over the last two trading sessions.Canopy looked on the bright side of life when it reported August 14. Its sales of dried cannabis rose 94% year over year was the headline. But on his conference call CEO Mark Zekulin confirmed he's leaving Canopy once a replacement is found. That should happen in the next few months.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Constellation Doubles DownZekulin and his predecessor, Bruce Linton, invested heavily ahead of marijuana legalization, which has been moving slowly. They have also filed 56 patent applications, bought brands that can't be advertised, and sought international growth that doesn't exist.It was this optimism, and investment, that led Constellation to buy its first stake then double-down to its present 38% holding. It also bought those warrants that will, once exercised, give it majority control. Constellation's confidence helped fuel Canopy's rise.But the value of those warrants has been hit by the fall of Canopy shares. Constellation has gotten a delay in the exercise date, to up to eight years. This comes as Canopy has a deal buy Acreage Holdings (OTCMKTS:ACRGF) once the U.S. legalizes marijuana.Constellation, in other words, is tripling down on legal pot. Meanwhile, former CEO 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 Aug. 15. * 10 Stocks Under $5 to Buy for Fall Until legalization, Constellation is sitting on warrants it can't exercise, an investment it can't get value from, and growth it can't access. Despite this, Constellation shares are up 21%, more than the general market in 2019. It's helped by continuing strong sales of Mexican beer brands like Corona and Modelo, and liquor brands like Svedka. Constellation is also selling 30 low-cost wine brands to E.J. Gallo for $1.7 billion, a little more than its original $3 billion asking price.The result is a company that's leveraged toward high-end brands of beer, wine and spirits, anticipating a windfall when its marijuana train comes in. Almost two-thirds of the analysts following Constellation rate it a buy. Risk? What Risk?Constellation stock is helped by first-quarter earnings that beat estimates. It earned $2.21 per share, when only $2.07 was expected.Even better numbers are anticipated for the current quarter, to be reported Sept. 27. Constellation is expected to deliver $2.63 per share of earnings on revenue of $2.3 billion.Canopy, meanwhile, is expected to see a loss of 26 cents per share when it reports next in November. Canopy's recent quarter sales of $90.5 million are just a blip on Constellation's $2.1 billion revenue figute last quarter."If you look at the speed of growth and the complexity of market regulations, the key is finding the right experience and the right person, and I think there are a number of sector backgrounds that could work well," Zekulin told BNN Bloomberg. * 10 Best Dividend Stocks to Buy for the Rest of 2019 and Beyond Constellation is certain to have a hand in choosing Zekulin's successor. Whomever it is, they are expected to bring stability to the company, as our Will Ashworth has written.So far, however, only superstars at companies like Nike (NYSE:NKE), Williams-Sonoma (NYSE:WSM) and Starbucks (NASDAQ:SBUX) are in the rumor mill. It's like a mid-major college football team that's only considering big-time head coaches for its program. Nick Saban is not walking through that door, and whoever does walk in is bound to be a disappointment. Bottom Line on Canopy Growth StockWhile the problems at Canopy Growth have yet to impact Constellation stock, I think it's only a matter of time before they do.While generations of Americans may be happy not to see their friends hauled off to jail for smoking weed, it takes time to build a scaled, legal marketplace. Canopy underestimated that time. So has Constellation Brands.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. 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 It's Just a Matter of Time Before Canopy Growth's Woes Hit Constellation appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) stock has tumbled in line with the rest of the cannabis space. Shares fell from a high of $7.20 on Aug. 6 to $5.67 at the close Aug. 15. With negative sentiment in the marijuana space accelerating, what's the next move with ACB stock?Shares continue to trade at a valuation premium to peers Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY). While the company has not experienced issues such as the scandal brewing at CannTrust (NYSE:CTST), little has changed on the catalyst front since my last article.With this in mind, what's the call on Aurora Cannabis stock? Read on to see whether ACB is a bargain (or a falling knife), at the current trading price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips A Closer Look at Aurora CannabisOn Aug. 6, the company released an update regarding the quarter ending June 30, 2019. The company anticipates net revenue of between $100-$107 million for the quarter, up from $65.1 million for the prior quarter. Aurora Cannabis reiterates they are getting closer to positive adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). I take this projection with a grain of salt, given their continued cash burn.With their focus on the medical market, Aurora Cannabis seems like a safer play. While its peers focus on the recreational market, the company is smartly pursuing more prosaic business lines. Coupled with their focus on geographic diversification, the company stands a greater chance of achieving profitability. But is the company getting ahead of itself? Despite expected quarterly sales of only 25,000-30,000 kg., the company is growing funded capacity from 150,000 kg/year to 625,000 kg/year.Aurora Cannabis has yet to make moves into the American market. They have not yet found a strategic partner (despite hiring Nelson Peltz to do so). Perhaps it's a smart move to take their time. Given that Canopy Growth's partnership with Constellation Brands (NYSE:STZ) is highly dilutive, teaming up with a big consumer goods company may not be the best option for Aurora shareholders.Aurora Cannabis remains a work-in-progress. But in terms of valuation, is ACB stock a buy? Let's see how the valuation of Aurora Cannabis stock stacks up to peers. ACB Stock Still OvervaluedOn an Enterprise Value/Sales (EV/Sales) basis, ACB stock trades at a premium to Canopy Growth. Aurora Cannabis stock has an EV/Sales ratio of 52.4, compared to 50.4 for CGC. Tilray has an EV/Sales ratio of 42.8. ACB stock does trade at a valuation discount to Cronos (NASDAQ:CRON). Cronos has an EV/Sales ratio of 165.3. But in the case of Cronos, the company's partnership with Altria Group (NYSE:MO) continues to help support the share price.ACB stock is not only overvalued relative to Canopy and Tilray. Despite a trailing twelve month negative EBITDA of $154 million, the company has a market cap of $6.14 billion. Investor expectations continue to keep Aurora Cannabis at an inflated valuation. This means much of the potential upside remains priced into the stock.Additional downside could be in the cards for Aurora Cannabis stock. Making a pivot from dilutive capital raises, the company recently announced it boosted its secured credit facility from C$200 million to C$360 million. But replacing dilutive equity with leverage amplifies the company's risk. With continued cash burn, ACB stock could face liquidity issues, especially as we get closer to the conversion date of its convertible debt. As I mentioned back in July, the company will either have to convert the debt into ACB stock (which would be dilutive), or raise capital once the notes mature. Either way, Aurora Cannabis stock could fall further. Bottom Line: Continue to Avoid Aurora CannabisThe legal marijuana space continues to be speculative. Investors enjoyed the ride for the past few years, but now it seems they are heading for the exits. With its focus on the less glamorous aspects of the legal pot trade, Aurora Cannabis has potential. By chasing opportunities globally, they are less dependent on specific jurisdictions to sustain growth. With the company yet to make a move into the United States, Aurora could make opportune acquisitions of U.S.-focused cannabis companies.For the time being, the risks with ACB stock do not match up with the potential opportunity. With the company's heavy use of convertible debt, material downside risk remains. With the investor exodus just beginning, stay on the sidelines while the dust clears. ACB stock could be a screaming by at a fire sale price. For now, Aurora Cannabis stock remains a long shot bet.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 Cheap Dividend Stocks to Load Up On * The 10 Biggest Losers from Q2 Earnings * 5 Dependable Dividend Stocks to Buy The post Wait Until the Dust Settles to Buy ACB Stock appeared first on InvestorPlace.
In the latest trading session, Constellation Brands (STZ) closed at $194.42, marking a +0.55% move from the previous day.
VICTOR, N.Y., Aug. 15, 2019 -- Constellation Brands, Inc. (NYSE: STZ and STZ.B), a leading beverage alcohol company, announced today that David Klein, chief financial officer,.
From Canopy Growth Corp. (NYSE: CGC) and Constellation Brands (NYSE: STZ) to HEXO Corp. (NYSE: HEXO) and Molson Coors Brewing Co. (NYSE: TAP), cannabis companies have taken advantage of strategic partnerships with beer-makers in an effort to completely transform the cannabis-infusion game. The newest addition to this feat is an authentic mashup of two Michigan-based companies, making exciting waves in the newly regulated recreational market.
Canopy stock is poised to drop big on Thursday after the cannabis company missed fiscal Q1 revenue and earnings estimates.
CHICAGO, Aug. 15, 2019 -- Corona Extra® has extended its contract with former star quarterback and current football analyst, Tony Romo, as the operator and face of the.
Canopy stock reported a net loss of C$3.70 per share, while net revenue hit C$90.5 million, short of Wall Street’s consensus estimates for around C$109 million.
Canopy Growth Corp (NYSE: CGC)'s adjusted EBITDA loss skyrocketed from CA$22.5 million ($16.8 million) to CA$92 million ($69.1 million) year-over-year, the Canadian cannabis company said in its first-quarter report Wednesday. Canopy's first-quarter net loss rose from CA$90.9 million a year ago to CA$1.281 billion. Dried cannabis sales in Canada's recreational market rose by 94% quarter-over-quarter, according to Canopy.
Canopy Growth Corp (NYSE:CGC) is one more cannabis stock that loses money. It will reveal its fiscal first-quarter earnings after the market close Wednesday. This report will be closely watched to see if the marijuana firm can reach $ 1 billion CAD in sales this fiscal year.Source: Shutterstock Canopy Growth stock is very speculative. Its market value is $11.35 billion (in USD), one of the largest in the space. That's 67x sales of $169.7 million USD for the year to March.At $31.78, CGC stock is up just shy of 20% this year, but down 34% from its late April peak of $52.03. Its all-time peak was $59.25 in October 2018, since listing on the NYSE on May 24, 2018.InvestorPlace - Stock Market News, Stock Advice & Trading TipsOne of its two Co-CEOs and co-founders resigned earlier this year. CGC lost $685 million CAD ($514 million USD) for its fiscal year ending March 2019. Analysts expect losses of 31 cents per share and revenue of $84.6 million (USD) for its June quarter. * 10 Real Estate Investments to Ride Out the Current Storm Canopy Growth ex-CEO Bruce Linton told Bloomberg in April its stated goal is to reach $1 billion CAD in sales this fiscal year. Bloomberg says its survey of analysts say revenue will only reach $840 million CAD for this year. So all eyes will be on whether the Q1 financial report puts CGC on a track for a billion $ year. The Key Is Cannabis ProductionCGC is one of the largest growers in Canada and recently received a New York state hemp processing and production license. It plans to invest up to $150 million in a 380k sq. ft. facility.Since full legalization of marijuana in Canada in mid-October 2018, cannabis stocks are analyzed for their cannabis production and volumes sold. Last quarter CGC harvested 14,469 kilograms and sold 9,329 kg. Recreational cannabis was 75% of the total.Analysts will be looking at the Q1 sequential increase over Q4 2018, to see if recreational usage was up significantly or if demand has leveled out. CGC Has Plenty of CashAt end of March CGC had over $4.48 billion CAD in cash and securities ($3.36 billion USD). So it can withstand losses for a good while. Last year CGC lost $521 million CAD ($391 million USD) in operating cash flow plus spent $644 million CAD on capex and acquisitions of $344 million CAD.Most of CGC's cash came from a $5 billion CAD ($4 billion USD) investment by beer and wine maker Constellation Brands (NYSE:STZ) in November 2018 for 37% of CGC. Canopy also later raised $600 million CAD in convertible notes.CGC has only $923 million CAD long-term debt. In sum, Canopy will not have to raise more cash for several years if its losses continue. What to Do After CGC Earnings?When CGC's earnings come out after the bell, watch both CGC's production numbers and whether its revenue will be on a track for $1 billion CAD for the year. If it is, then CGC stock might jump significantly.As of this writing, Mark Hake, CFA does 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 All Eyes Are on Canopy Growthas Revenue appeared first on InvestorPlace.
Ahead of its earnings report set for Aug. 14, shares of Canopy Growth (NYSE:CGC) are already down by nearly 25% in the quarter. A combination of risk aversion and CannTrust Holdings (NYSE:CTST) single-handedly pulling down the cannabis sector are contributing to the drop in CGC stock. With Canopy Growth stock down by over 40% from its 52-week high, investors do not expect much from the upcoming report. But can Canopy Growth report strong enough results to reverse the downtrend?Source: Shutterstock Aphria (NYSE:APHA) shares rose from around $5 to nearly $7 after it reported quarterly results Aug. 2. It reported net revenue growth of a whopping 969% to $128.6 million CAD. Distribution revenue rose 72% to $99.2 million CAD while net cannabis revenue rose 86% to $28.6 million CAD. Importantly, the company reported cash levels of $571 million at the end of the quarter. Its annual production capacity will reach 255,000 kilograms when all its facilities are fully licensed.By comparison, Canopy Growth reported revenue growing 312.5% year-over-year to $94.1 million CAD in the fourth quarter posted Jun. 20. Quarterly revenue grew 13% sequentially, helped by additional revenue generation from value-added products, extraction services and clinic partners. Shipments topped 24,300 kilograms.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor the current quarter (the fiscal first quarter), Canopy expects to harvest around 34,000 kilograms. It ended the quarter with cash, cash equivalents available and marketable securities totaling $4.5 billion. Canopy's Sales Channels GrowingInvestors should spot the glaring differences between Aphria and Canopy. First, Canopy has far more cash on hand and has Constellation Brands (NYSE:STZ) as its biggest partner. More worrisome is that Canopy's production fell sequentially. Management blamed static platforms in Alberta and Ontario for slowing its output. In Alberta, additional licensing requirements for stores slowed production. And in Ontario, the ramp-up in store openings in April hurt its output. Canopy may only wait for these channels to grow. By Q3 or Q4, the channel should get bigger, while a favorable product mix should diversify its revenue stream. * 15 Growth Stocks to Buy for the Long Haul Since Canopy is forecasting better production numbers as late as Q3, expect underwhelming output in tonight's earnings report. A month before Canopy's Q4 report, in May, the stock peaked at over $50 only to fall to below $40 when it reported results. Other Expectations from First-Quarter EarningsIn the medical segment, revenue grew 170% year-over-year to $10 million CAD. A product transitioning to the recreational channel, plus the supply challenges in specific product categories, limited its growth. Now that it has been remedied, expect revenue from this channel to improve. Net annual gross revenue from the Canadian recreational channel, which totaled $140.5 million CAD, should grow again this quarter. Shipments nearly tripled to 24,000 kilograms in the last quarter. Canopy shipped 5 million units in the fiscal year, compared to around 1 million in the prior year.Expect a big non-cash charge in the quarter. A new investor rights agreement subjects the firm to fair value adjustments. Canopy's management reports that they expect to record a material non-cash charge related to these adjustments, which will contribute to a material net loss.Increases in the company's harvest will support its long-term view on revenue growth in the coming quarters. But sales of the Q1 harvest will be sold in sequential quarters (Q2 and Q3). This is due to the timing of post-harvest processing, value-added product manufacturing and the timing of lab testing and quality assurance processes. Your Takeaway on CGC StockBrace for a weak revenue number from Canopy Growth in the earnings report. But since the market already expects these results, CGC stock may not fall by much. Cannabis investors need not be concerned over the short-term performance. Growth will come in later quarters as production continues rising and sell-through occurs in later quarters.As of this writing, Chris Lau 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 Investors Shouldn't Worry About Canopy Growth Stock's Weak Q1 appeared first on InvestorPlace.
Canopy Growth is set to report fiscal first-quarter earnings in the marijuana firm’s first earnings report since co-founder and former CEO Bruce Linton’s departure.
Billionaire Dan Loeb's hedge fund, Third Point LLC, disclosed that it sold off its investments in American Express Co. and Constellation Brands Inc. during the second quarter, while adding to its Netflix Inc. stake. Overall, the value of Third Point's equity holdings declined to $8.54 billion as of June 30 from $8.99 billion as of March 31; the S&P 500 rose 3.8% during the second quarter. Third Point had owned 1.5 million shares of AmEx and 1.05 million shares of Constellation Brands as of March 31. The fund also sold off the 1.75 million share holding of Celgene Corp. during the quarter. Separately, the stake in Netflix increased to 500,000 shares as of June 30 from 400,000 shares as of March 31. Third Point's largest investment by market value is still hospital products company Baxter International Inc. , but its stake was decreased to 23 million shares from 28 million shares. The stake in Campbell Soup Co. dropped to 18.5 million shares from 21 million shares.
As Canopy Growth (NYSE:CGC) prepares to announce its fiscal first-quarter earnings Aug. 14, analysts are getting nervous. Founder Bruce Linton was told to leave after the last quarter's disappointment. Constellation Brands (NYSE:STZ), which bought 38% of the company last year, has lost patience with CGC stock's losses.Source: Shutterstock But more losses are still expected. The official estimate is 28 Canadian cents-per-share, but the "whisper number" analysts are telling their best customers is as high as 37 cents. Analysts expect revenue of $86 million (in Canadian dollars), down from last quarter's $94 million.Since those losses came out, CGC stock is down 25%, cutting the market cap to $11.26 billion (this time, in U.S. dollars). Constellation stock is down 4% and, while it's still up around 20% for the year, patience is wearing thin.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Too Much Pot?The problem for Canopy, as for other big producers, is that they invested while heavily anticipating legalization. However, legalization efforts are moving slower than some firms bargained for. This can be great news for pot smokers, but very bad news for suppliers, who are now being told to start making money, or else. * 7 Safe Dividend Stocks for Investors to Buy Right Now Smaller players are being weeded out. The job of new Canopy CEO Mark Zekulin, a longtime insider, may be hanging by a thread.Linton and Zekulin invested heavily in production capacity and branding, expecting 500,000 kilos of production this year. This investment may not pay off -- the problem is that while Canada legalized marijuana almost a year ago, provinces can still regulate it. Quebec has been resistant, while legislators in western Canada opposed the move.For CGC stock, the result is that earnings expectations have been falling. Analysts were expecting Canopy to make money in fiscal 2021. Now they're expecting more losses. Where are the Bulls?There remain Canopy bulls. Nicolas Chahine recently called Canopy a buy at current levels. He still considers it speculative but notes that current bottlenecks should be removed over time. Illinois passed a bill legalizing the sale and use of recreational marijuana in June, and regulators expect sales to launch in January. This bill makes Illinois the eleventh U.S. state to legalize recreational use.Smokers aren't the only market. CBD oil is increasingly popular. A friend of mine swears by it for her chronic knee pain. Riding the highs of CBD oil, Canopy is investing in researching its use as a medicine and in producing a line of industrial hemp. Outside of North America, Canopy has focused its attention on Spectrum Therapeutics, a brand focusing on dosing CBD oil as a softgel pill.Within Canada, a lot of Canopy's investment went into the Ottawa suburb of Smiths Falls, where there is a palpable nervousness about the Aug. 14 numbers, and how Constellation might react to them. The Bottom Line on CGC StockIf Canopy delivers the revenue growth bulls are expecting, the stock will rise and the pressure will be off. The pending acquisition of U.S.-based grower Acreage Holdings (OTCMKTS:ACRGF) could complicate the outlook.The Acreage deal gives Constellation Holdings more time to exercise warrants giving it majority control. Canopy confirmed Aug. 8 that they were planning on acquiring the right to buy ACRGF for $3.4 billion -- CGC can't fully acquire Acreage until marijuana production and sale are federally legalized in the U.S. Despite the pending acquisition, investors are still trading ACRGF stock, which is down 40% over the last three months.Legal marijuana could well become a gold mine for today's speculators, but the hype train has left the station. Some people are now comparing pot to 3D printing, rare earth metals and solar panels -- three big prospective industries that failed to live up to their promised potential.If you are betting on legal pot in 2019, you should tread carefully and be prepared for some short-term losses.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at email@example.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. 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 Buyers Should Beware Canopy Growth Stock appeared first on InvestorPlace.
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.
Constellation Brands (STZ) is on track with wine and spirits business transformation strategy. The company signs an agreement with Heaven Hill Brands to divest Black Velvet Canadian Whisky.
It's an admittedly tired trope regarding Canopy Growth (NYSE:CGC). Many owners of CGC stock have largely learned to ignore the rhetoric, recognizing it takes money now to make money later. The company's heavy spending is setting the stage for a bright future rather than an impressive present.Source: Shutterstock What most Canopy Growth stock owners may not fully appreciate is the extent to which the company is -- figuratively and somewhat literally -- betting the farm on a future that may or may not materialize. * 7 Safe Dividend Stocks for Investors to Buy Right Now Wednesday's post-close earnings report may help the market better understand this reality, at a point when more than a handful of investors were already starting to entertain doubts.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Seemingly Healthy, But Check Under the HoodIt has been true of every pot stock from Aphria (NYSE:APHA) to Tilray (NASDAQ:TLRY). Even before Canada legalized recreational marijuana in October of last year, its primary players were jockeying for position.Translation: Those cannabis companies were spending money however they could get it in order to acquire or at least tie-up partners before a rival company did.Canopy Growth was able to take a different, healthier route to that destination. Constellation Brands (NYSE:STZ), which makes a variety of spirits and beers including Black Velvet Whisky and Corona (respectively), made a modest investment in the company in 2017, but upped its stake in 2018 with a hefty $4 billion investment in CGC stock.The move gave roughly 40% of the cannabis company to Constellation, and gave Canopy Growth a much-needed cash infusion.A big chunk of that funding was still on the books as of the quarter ending in March too. Canopy Growth's balance sheet consisted of $2.5 billion in cash, and a little more than $2 billion worth of marketable securities. Canopy Growth, it seems, is liquid even if $3.4 billion has been earmarked for the purchase of Acreage Holdings if and when the United States legalizes cannabis at the federal level.Don't think for a minute the company's books are as clean as they may seem with just a cursory glance, though. The potential liabilities are stacking up, even if not in the usual places. Canopy Growth Stock as Cheap CurrencyBloomberg Intelligence analyst Kenneth Shea rang the alarm bells last month, cautioning investors that heavy writedowns were likely to be seen for pot companies during the earnings season currently underway.The accounting adjustments are a means of re-valuing an acquired company once it has been integrated into an existing operation, to better reflect that deal's true value to the buyer.Company purchases are initially added to the 'goodwill' line of the balance sheet … a somewhat arbitrary figure that exists only because a deal has to be debited somewhere, and credited somewhere else. Over time, if an acquisition doesn't add tangible value quickly enough (or at all) the amount of goodwill on the books is reduced. It's not a cash expense, but damaging all the same.Shea specifically names Aphria, Aurora Cannabis (NYSE:ACB) and -- you guessed it -- Canopy Growth as names particularly vulnerable to writedowns.It's not an unreasonable concern. As of the end of the fourth fiscal quarter in March, Canopy Growth was carrying $1.5 billion worth of goodwill on its balance sheet.Other concerns sitting on the balance sheet include $842 million worth of long-term debt that cost the company nearly $12 million in interest payments during the three-month stretch.For perspective, Canopy Growth did $226.3 million in revenue for the quarter ending in March.Perhaps the most alarming, even if not the biggest, expense of all is how much the company's stock-based compensation has been costing it. In its fourth and final quarter of the year alone, stock-based compensation cost Canopy Growth $93.2 million, $74.7 million of which was effectively part of employee paychecks; the other $18.5 million was linked to milestones achieved by acquired companies. And that wasn't unusual. For the quarter ending in December, compensation in the form of CGC stock reached $63.9 million.In both quarters, share-based pay was the company's single-biggest operating expense, outpacing sales and marketing or R&D spending. Looking Ahead for CGC StockTo be fair, other cannabis stocks have employed similar practices, and find themselves in comparable situations as a result. Few investors can convincingly argue that marijuana mania hasn't largely forced the industry's most recognizable names to enter an acquisition race they didn't entirely want to run. Investors so far have been mostly willing to overlook the spending spree.That's changing though.Perhaps with a nudge from CannTrust Holdings (NYSE:CTST) and TILT Holdings (OTC:SVVTF), investors are no longer giving out free passes and ignoring numbers they don't like. The latter already booked the kind of big writedown Bloomberg's Shea warned about, while the former has run into serious accounting concerns and has just been busted for unauthorized storage.That's not to suggest Canopy Growth has to face an uphill battle when it reports quarterly numbers after Wednesday's close. But, by most measures, that is what it will be doing.Bottom line? The backdrop is quickly changing as patience wears thin. Investors may start to pick apart the pieces of Canopy's books that have thus far been overlooked. If the company can't justify all of the expenses and balance sheet concerns in a highly convincing way on Wednesday, an already-struggling CGC stock could start another round of bearishness.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 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 Canopy Growth is Pushing CGC Stock to an Inflection Point appeared first on InvestorPlace.
One of the biggest names in the bourbon industry plans to acquire a well-established Canadian whisky brand. Bardstown, Ky-based Heaven Hill Brands said Monday that it has reached an agreement to purchase Black Velvet Canadian Whisky from a subsidiary of New York-based Constellation Brands Inc. (NYSE: STZ). Black Velvet is the second-largest selling Canadian whisky in the world, according to a news release. (It's also one of those brands that spells whiskey without the e — long story.) Heaven Hill Brands plans to close on the deal in the second half of 2019, pending regulatory approval, the release stated. A purchase price was not disclosed. Perella Weinberg Partners LP was Heaven Hill’s financial advisor on the deal. As part of the acquisition, Heaven Hill will acquire the historic Black Velvet Distilling facility — one of eight traditional distilleries operating within Canada — and all of Black Velvet's distilling, aging and bottling facilities. The deal also includes Constellation's remaining portfolio of Canadian whisky brands: MacNaughton, McMasters, and the international business of the Schenley brands — Golden Wedding and OFC, the release said.