|Bid||198.19 x 800|
|Ask||198.45 x 800|
|Day's Range||197.71 - 201.52|
|52 Week Range||150.37 - 228.91|
|Beta (3Y Monthly)||1.14|
|PE Ratio (TTM)||15.70|
|Forward Dividend & Yield||3.00 (1.48%)|
|1y Target Est||N/A|
It wasn’t so long ago that publicly traded companies shied away from investing in the nascent marijuana industry, even as California and Colorado began the legalization trend. James Boyd, education coach at TD Ameritrade, pointed out some Canadian publicly traded cannabis-related companies now have dual listings on the New York Stock Exchange™ and Nasdaq™. The big news stories around the industry center on consuming companies, such as the 2018 news that beer and spirits maker Constellation Brands Inc (NYSE: STZ) increased its investment in Canadian medical-cannabis producer Canopy Growth Corp (NYSE: CGC) to 38%.
The hard seltzer alcohol market has exploded over the last year and could expand to a $2.5 billion market by 2021 and Constellation Brands, Inc. (NYSE: STZ ) could see part of its beer portfolio negatively ...
Canopy Growth (NYSE:CGC) stock has taken a pounding. Shares are down nearly 25% in the past month, from $35.40 per share to $26.57 per share. The investor exodus from marijuana stocks has been brutal.Source: Shutterstock With excess supply outgunning demand, it's no wonder the bull case for pot stocks is tough to justify. But can investors expect a rebound in Canopy Growth stock? Let's take a closer look at the future of CGC shares. Recent Performance of CGC StockCGC released earnings on Aug. 14. For the quarter ending June 30, net revenue was C$90.5 million, down from C$94.1 million in the prior quarter. Overestimating demand for CBD oils and capsules, Canopy lost out while its peers such as Aurora Cannabis (NYSE:ACB) continued to grow revenue. As a result, CGC saw operating losses of C$123.1 million for the quarter.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDespite oversupply in the market, CGC and the other Canadian cannabis names continue to ramp up production. Canopy harvested about 41,000 kg during the quarter. But sales were only 10,549 kg or kg equivalents. Like Aurora Cannabis, Canopy has gotten ahead of itself in its fast drive to scale operations.But is short-term thinking not the way to go with cannabis stocks? As InvestorPlace contributor Luke Lango wrote on Aug. 19, "there is still visibility for Canopy to one day be a $50 to 100 billion company." Investors buying in now may see tremendous gains over a long time frame. * 10 Marijuana Stocks That Could See 100% Gains, If Not More What about investors with a shorter time horizon? Is upside priced in, or can investors get a discount? Let's take a look at the valuation of Canopy Growth stock. Valuation: Canopy Growth Stock Still FrothyCanopy Growth stock currently trades at a Enterprise Value/Sales (EV/Sales) ratio of 32.2. This is a discount to the current EV/Sales valuation of Aurora Cannabis. ACB trades at an EV/Sales ratio of 48.2 In terms of other peers in the "cannabisphere," Cronos Group (NASDAQ:CRON) continues to trade at a high valuation (EV/Sales of 150.7). Tilray (NASDAQ:TLRY) trades at a discount to CGC, with an EV/Sales ratio of 31.4.With the recent beat-down of Canopy Growth stock, shares are now a bargain compared to Aurora Cannabis. But, as I wrote earlier this month, Aurora Cannabis seems to have a better growth playbook. By focusing on the medical marijuana space, Aurora is the safer cannabis stock play. But an overlooked risk factor in both cannabis stocks is dilution. The use of share issuance and warrants to finance unprofitable operations minimizes upside for investors. CGC Stock Dilution Risks ContinueThe company's partnership with Constellation Brands (NYSE:STZ) was initially seen as a boost for CGC stock. But as the partnership progresses, it is clear the deal is terrible for shareholders. Constellation's $5 billion dollar investment included the issuance of warrants. These warrants came with certain covenants to protect Constellation from dilution. CGC's proposed buyout of Acreage Holdings (OTCMKTS:ACRGF) triggered a renegotiation of warrants. Due to this revision, CGC was forced to reprice the Tranche B warrants, resulting in a C$1.2 billion non-cash charge.As I wrote on July 29, dilution continues to be a problem for Canopy Growth stock. This dilution risks goes beyond the Constellation partnership. $600 million in convertible debt comes due in 2023. The conversion price is set at $48.18 a share. If CGC stock continues to languish under this strike price, the company will likely need to raise more capital once the notes mature.Of course, Canopy Growth could be profitable by 2023, and would have an easier time refinancing the debt. But investors should take the dilution risk seriously. With much of Canopy's potential priced into shares, dilutive capital raises could cap the stock's upside potential. Bottom Line: The Canopy Sell-Off Isn't OverCanopy stock is down more than 50% from its 52-week high. But shares could go lower. With Canadian market growth nonexistent, Canopy needs U.S. legalization fast in order to move the needle. With federal legalization still years off, CGC will likely continue to burn cash as it scales up operations. The partnership with Constellation Brands provides plenty of capital to keep the lights on. But the terms of the partnership give Constellation an easy way to takeover the company at a discount.So what's the call on CGC stock? Investors should continue to wait on the sidelines until the situation improves. If Canopy Growth stock falls another 50% (or more), there could be a buying opportunity. I do not deny that we are the early stages of the marijuana legalization story. But investors need to wait until hype has dissipated to consider stocks such as CGC.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 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Down 25% in a Month, CGC Stock Could Fall Further appeared first on InvestorPlace.
Shares of cannabis company Canopy Growth (NASDAQ:CGC) have certainly come down from the recent highs. CGC stock is now more than 50% below the all-time highs near $60 from last October.Source: Shutterstock Disappointing earnings last week only added to the unabated selling pressure. Some of the selling was warranted, given the parabolic rise in the Canopy Growth stock price. The carnage, however, is getting overdone and it's time for CGC to begin to "light up" once again.CGC reported earnings last week and it missed on both the top and bottom line. The news sent Canopy Growth stock skidding over 10% with shares now trading at the lowest levels of the year near the $27 area.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe technicals point to a potential pop for Canopy Growth stock following that sharp drop. CGC Stock ChartCGC stock reached oversold readings on a 9-day RSI basis before turning higher. Bollinger Band Percent B went negative and printed at the lowest levels in over a year before it turned up as well. Canopy Growth stock is also trading at a big discount to the 20-day moving average, which signaled lows in the past. GCG stock finally staunched the bleeding yesterday as shares closed higher on the day. This is even more powerful given that it was right at the long-term support area of $26.50. * 10 Small-Cap, Up-And-Coming Stocks to Keep on Your Radar As mentioned, the latest earnings report was a clear disappointment with earnings and revenues both missing expectations. Emerging companies like Canopy Growth, though, are more about the future than the present. On the earnings call, current Constellation Brands (NYSE:STZ) CEO Rob Sands hinted at this growth potential. He stated that "over the past year, we've come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy's market-leading capabilities in this space."Certainly alcohol and beverage giant Constellation Brands believes in the future of the cannabis industry after taking a nearly $4 billion dollar stake in CGC last August. The stake was effectively priced at just over $32, so jumping into CGC stock at current levels would be at a 15% discount to the massive stake taken by Constellation Brands.Interesting to note that former co-CEO Bruce Linton, who was forced out by Constellation Brands, is adding to his stake in the company. He notes that the company has a decided advantage in intellectual properties versus competitors. Mr. Linton also points to seasonality, with August generally being a weak month (and subsequently a good time to buy) for cannabis stocks historically as trading volumes fall. While corporate insider buying is usually a bullish sign for a stock, insider buying by a former CEO is even a more potent sign.Long-term believers in the potential of the cannabis industry should consider Canopy Growth near current levels. GCG stock is trading near the cheapest prices over the past few years and held critical support. Price volatility will certainly remain for the foreseeable future, so selling a Jan $35 covered call at $1.50 will help cushion the downside by over 5% while still allowing for 27% upside in the stock.Tim Biggam may hold some of the aforementioned securities in one or more of his newsletters. Anyone interested in finding out more about Tim and his strategies can go to https://marketfy.com/item/options-and-volatility. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Canopy Growth Stock Is Finally Ready to Make a Comeback appeared first on InvestorPlace.
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%.
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 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 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 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.
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.
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 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 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.