|Bid||38.31 x 0|
|Ask||38.33 x 0|
|Day's Range||37.45 - 38.33|
|52 Week Range||30.30 - 76.68|
|Beta (3Y Monthly)||5.40|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Canadian marijuana producer Canopy Growth has loads of cash and an early start, as prohibitions fall around the world. But at $28 per share, Canopy stock is expensive, an analyst said.
Tilray (NASDAQ:TLRY), like so many marijuana stocks, is having a terrible year. Yes, some traders like to make fun of anyone that bought Tilray stock near its $300/share peak. But don't forget that as recently as this January, Tilray stock still traded for as much as $100 per share. This year alone, shares have lost more than half their remaining value.Source: Jarretera / Shutterstock.com That shouldn't come as a surprise. As I explained in May, the company was doing better on earnings but the supply growth from other producers overwhelmed Tilray's progress. That's been a valid concern so far. TLRY stock has continued to sink as the oversupply in the Canadian marijuana market has further intensified.The worst may finally be over, however. Tilray stock has rebounded more than 20% from its 52-week low since the start of September.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Momentum Stocks to Buy On the Dip Is Tilray ready to rally again? Tilray's Growth Strategy Seems ReasonableDespite the punishing decline in Tilray's stock price, management hasn't panicked. As I explained in that previous article, Tilray CEO Brendan Kennedy has focused on disciplined supply growth at a reasonable price. Tilray's deals, such as buying Manitoba Harvest came at affordable prices rather than paying big bucks as firms like Canopy Growth (NYSE:CGC) have done with some of their acquisitions.Tilray has also wisely used convertible bonds to raise funds. The convert feature is now way out of the money, ensuring that shareholders won't be diluted unless Tilray shares go on a monster run. This was a savvy way to raise nearly half a billion in funds without hitting TLRY stock owners with much dilution.Finally, while the international market hasn't taken off that quickly, Tilray has a shot there as well. The company is building out its facilities in Portugal -- again at a reasonable build-out cost. Still Hasn't Reached Critical MassTilray stock bears, on the other hand, continue to question Tilray's prospects. While the company certainly has avoided some of the excesses of its rivals, at the end of the day you need revenues and profits to justify your share price.And Tilray simply doesn't have much of either. Tilray's market cap, even with the stock at just $30, is still almost $3 billion. That's a huge valuation for a company that has produced less than $100 million in revenues over the last year. If revenues reach $200 million over the next year or two and Tilray manages to maintain a still robust 10x price/sales ratio, that'd imply an additional 33% downside on TLRY stock to around $20/share.Also, despite the small revenue base, Tilray has a ton of product lines. With the addition of Manitoba Harvest, it now has foods and supplements in addition to the more standard fare. And Tilray has international operations in a variety of countries. Yet, it hasn't added up to a critical mass that can deliver sustainable profits just yet. Like with Aurora (NYSE:ACB), Tilray has a lot of irons in the fire, but there's no sign that any particular thing is heating up just yet. CannTrust Reminds Us Of Dangers In The Cannabis IndustryWhile Tilray stock has enjoyed a welcome rebound, the industry isn't out of the woods yet. The huge supply and demand imbalance continues to weigh painfully on the sector. And that's not all. Regulatory risk remains a major concern.Tuesday brought us a fresh reminder on that front. CannTrust (NYSE:CTST) stock plunged another 14% on the day. CannTrust hit new all-time lows after admitting that Health Canada had suspended the company's license to produce and sell marijuana. It's a suspension, rather than a full revocation of their operating license. Still, it was a huge blow to the company's already damaged credibility.The license suspension on its own shouldn't come as a huge surprise. As InvestorPlace's Josh Enomoto recently wrote, CannTrust suffered two major scandals. The first involved illegal growing operations hidden with false walls. CannTrust fired its CEO with cause, along with other top employees, as a result. The company also somehow had black market seeds get mixed into its inventory.Adding it all up, CannTrust stock is now down a shocking 90% from where it traded earlier in 2019. That's a nearly total wipeout for a New York Stock Exchange-listed company. While there's nothing that dramatic going on with Tilray from a scandal point of view, CannTrust's collapse serves as a fitting reminder that this is a new industry that will have tons of growing pains.Also, it's worth noting that marijuana companies have started getting more traction in mainstream stock indexes and associated ETFs. However, the index operators will now kick CannTrust stock out of the primary Canadian stock index and related ETFs, and other fund operators may be slower to include pot stocks like Tilray in their funds as a result of this incident. Tilray Stock VerdictTilray has much better management than CannTrust, thank goodness. But that doesn't mean that is time to get too excited about the recent rebound in the TLRY stock price.The cannabis industry is continuing to face massive growing pains. There will be winners eventually. But more companies will end up like CannTrust as well. The industry is young and a lot of competition has to fall by the wayside for the survivors to prosper. * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars Tilray, without a major partner, hasn't yet proven that it will be able to be one of the industry's eventual winners. For now, Cronos (NASDAQ:CRON) and Canopy, with their major backers, might be a safer choice until the industry's slump ends.At the time of this writing, Ian Bezek had no positions in any of the aforementioned securities. You can reach him on Twitter at @irbezek. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post Is Tilray Stock's Crushing Bear Market Finally Over? appeared first on InvestorPlace.
As many investors know, hype doesn't equal profits when it comes to growing a portfolio in cannabis stocks. Having said that, let's look at Innovative Industrial Properties (NYSE:IIPR), Scotts Miracle-Gro (NYSE:SMG) and Hexo (NYSE:HEXO) in order to avoid the buzz and cultivate better-looking possibilities off and on the price chart. Let me explain.Cannabis stocks. The market's potential is massive to say the least. But for those that have taken stakes in the group's most popular names such as Canada's top producer Canopy Growth (NYSE:CGC), former capitalization top dog Tilray (NASDAQ:TLRY) or Cronos (NASDAQ:CRON), losses have likely followed.Without getting too deep into the minutiae, early enthusiasm and momentum with most cannabis investments has adjusted to today's more difficult realities. Cannabis stocks face massive layers of regulatory red tape as they attempt to tap into new markets. And many of these companies are up to their eyeballs in debt while vying to be competitive.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars Eventually, there will be winners among cannabis producers. And for those investors that hang on, the returns on the right pick could be enormous. I get it. At the same time, buying the proverbial picks-and-shovel plays and the companies already quietly making money for investors, off and on the price charts, makes for an even stronger blend of exposure to cannabis stocks. Cannabis Stocks Buy: Hexo (HEXO)Hexo is our first "buy" recommendation. HEXO stock is also the most speculative of our three cannabis stocks to buy. The company is looking to cash in on the niche edibles and cannabis-infused beverages market, and has stronger odds of success courtesy of its partnership with Molson Coors (NYSE:TAP) which allows it access to the beverage giant's many resources.On the price chart, HEXO stock is unique among its peer group. Despite this year's steep correction in cannabis stocks, shares of Hexo have maintained a weekly uptrend. The last few weeks have been spent trying to rally out of a well-supported, small double-bottom pattern.With pattern confirmation in hand and a supportive-looking stochastics setup, my recommendation in HEXO is to buy shares today. I won't put a price tag on the upside potential of this more speculative play. But placing an exit below support, if required, is smart business. Scotts Miracle-Gro (SMG)Scotts Miracle-Gro is the second of our stocks to buy. If you've ever been in a Home Depot (NYSE:HD) or Lowe's (NYSE:LOW) -- or mowed a lawn for that matter -- SMG stock is familiar with its lawn and gardening products. Scotts is also profitable, offers a dividend of 2.3% and happens to nicely positioned within the cannabis industry as its largest hydroponics supplier.Technically, today's investors are able to buy SMG stock as it pulls back into a high consolidation pattern. The price action has taken on the characteristics of a high handle formation after shares broke out of a large cup-shaped base to new highs, but began to retreat following a gain of around 8%. * 7 Momentum Stocks to Buy On the Dip With SMG stock just now registering an oversold stochastics condition, my advice is to put shares on your radar to purchase on a second move back above the prior high and above the cup breakout level of $105.23. Place an initial stop-loss below $99. Innovative Industrial Properties (IIPR)Innovative Industrial Properties is the last of our three cannabis stock buys. IIPR stock is a landlord for many of the sector's producers. Like SMG stock, IIPR is profitable and as a real estate investment trust, investors are paid regular income of 3.4%. But please, don't think of IIPR as a widows-and-orphans investment like Coca-Cola (NYSE:KO). These shares are volatile.Currently, IIPR stock's aggressive profile has taken shares out of a symmetrical triangle pattern and into a deep correction of around 40% at the recent low. Again, this cannabis stock is not for the faint of heart.The good news today is that shares are oversold and have signaled a bullish stochastics crossover. And with IIPR confirming a weekly candlestick reversal pattern after loosely testing key Fibonacci support, this cannabis stock is ripe for the picking in conjunction with a blended stop-loss below $80.90.Investment accounts under Christopher Tyler's management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler's observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies and related musings, follow Chris on Twitter @Options_CAT and StockTwits. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars * 5 Stocks to Buy With Great Charts * 5 Goldman Sachs Stocks to Buy with Over 20% Upside Potential The post 3 Cannabis Stocks to Buy Today appeared first on InvestorPlace.
The U.S.-listed shares of Canopy Growth Corp. edged up 0.3% toward a fourth straight gain in midday trading Wednesday, although Oppenheimer analyst Rupesh Parikh initiated coverage of the Canada-based cannabis company with a not-so-enthusiastic "perform" rating and no price target. Parikh said that he believes Canopy is "best positioned" to capitalize on the global cannabis market over time, given its first-mover advantage, investments in key geographies, such as the U.S., Canada and Europe, partnership with Constellation Brands Inc. and the most capital of any cannabis player. "However, shorter-term, we believe a full valuation, lofty [Wall] Street expectations, the potential for losses to persist and regulatory delays hamper the case for outperformance," Parikh wrote in a note to clients. The regulatory delays refers to delays regarding use of CBD (cannabinoids) in the U.S. Of the 24 analysts surveyed by FactSet, nine have the equivalent of hold, 14 have the equivalent of buy and one has the equivalent of sell. The stock has now gained 5.9% year to date, while the ETFMG Alternative Harvest ETF has lost 4.7% and the S&P 500 has rallied 19.5%.
Canopy Growth took the market by surprise and let CEO Bruce Linton go. After leaving Canopy Growth, Linton joined three companies in an advisory role.
Anyone who's been halfway paying attention to the action in cannabis stocks knows it hasn't been an easy ride. From the most well-known names to the most obscure, it's been a volatile and difficult ride. Aphria (NYSE:APHA) is no exception, with Aphria stock down big from its highs.Source: Shutterstock Shares have fallen roughly 40% from the February highs and almost 60% from its 52-week highs. To say that it's been a rough ride is putting it lightly and these two performance marks emphasizes as much.Earlier this week, we highlighted a silver lining in Aurora Cannabis (NYSE:ACB). After the company reported earnings, shares took a tumble. But so far at least, the stock has avoided a lower low. That's the positive take despite the revenue miss and bearish reaction in the stock price.InvestorPlace - Stock Market News, Stock Advice & Trading TipsHowever, APHA stock has its own silver lining: the stock is actually trending higher. Aphria Stock Is Stronger Than It SeemsComing into August, Aphria stock had been dragging hard. Shares were down almost 50% in just a few months and sentiment couldn't have been worse. Then better-than-expected earnings propelled shares higher, as the stock ran from a low of $5.02 to roughly $7.50 just a day later.The one-day ~50% rally set the tone for APHA, even though shares are now lower at this point. I think the stock is down from its post-earnings high as investors try to work through various resistance points and as they fight the bearish stigma attached to the industry right now. * 7 Tech Stocks You Should Avoid Now There's no reason to mince words about it: Cannabis stocks are out of favor right now. That's not likely to persist forever, which is why it's important to look for stocks showing relative strength. While Aphria stock is not showing strength relative to the market, it is showing strength relative to its peers.Identifying stocks with relative strength is because they're the ones that tend to outperform when the group comes back in favor.Even though shares have been under pressure lately, Aphria stock is still up 16.2% so far in 2019. That's better than Canopy Growth (NYSE:CGC), Aurora Cannabis and Cronos Group (NASDAQ:CRON). CRON, ACB and CGC are all positive on the year too, but lag APHA.The performance is also better than Tilray (NASDAQ:TLRY) and New Age Beverages (NASDAQ:NBEV), which are both down in 2019.Of the group, Aphria stock is the top performer over the last six, three and one month. For the last timeframe, APHA stock is up almost 11%. So this is certainly worth paying attention to. The Exact Breakout Point As you can see on the chart above, we have an ascending triangle formation developing in Aphria stock. That's where uptrend support (blue line) continues to squeeze a stock higher against a static level of resistance. It's a bullish trade development, as investors look for a breakout.In this case, recent resistance has been near $7.20. But that's not the big breakout point, in my view. Instead, I'm looking at the $7.60 level. This level has been notable resistance since the April breakdown. If Aphria stock can clear it, it will also mean that APHA has reclaimed its 200-day moving average.In this case, clearing $7.60 could trigger a big-time breakout. The first upside target is 61.8% retracement at $8.68. Above that and I'm looking for a gap-fill up to $9.85.There is risk, though.If uptrend support fails, it puts the ascending triangle formation at risk of failing. Below it and the 50-day moving average is the first downside target. Below that puts the $5.80 level on watch and below that, the $5 mark is possible. The Bottom Line on APHA StockThe bottom line here is simple: Aphria stock is the most well-behaved stock in the cannabis space showing the most relative strength among its peers. Its stock has a very clear setup on the charts, while its most recent earnings report was good enough to ignite the recent rally.A glance at the balance sheet reveals $422 million in cash and short-term equivalents. That's notable, given the stock's $1.67 billion market cap.Further, current assets of $577 million is more than five times its current liabilities of $102.5 million. Total assets also significantly outweigh total liabilities, total $1.8 billion vs. $524 million. * 7 Momentum Stocks to Buy On the Dip In other words, Aphria is more than capable of covering its short-term obligations as it focuses on growing its business. If there's a speculative cannabis stock worth monitoring right now, it's Aphria in my opinion.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 * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Aphria Stock Is the Most Well-Behaved Pot Stock on the Market appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) stock has some big problems. There is no growth at this marijuana company. Net revenue fell to $90.5 million CAD for its June quarter, down from the prior-quarter revenue of $94.1 million CAD.Source: Shutterstock What's more is that CGC's adjusted free cash flow losses widened from the prior two quarters. FCF came in at a loss of $372 million CAD in the latest quarter. This is about even with the prior quarter's loss of $373 million CAD.But after including acquisitions, the adjusted FCF widened to loss of $824 million CAD from a loss of $414 million CAD. This is an increase in adjusted-FCF losses of 99%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCGC stock won't be rising anytime soon with these kinds of losses. For example, CGC's cash and securities balance fell 30% in the most recent quarter to $3.1 billion CAD. If Canopy Growth keeps draining its cash as it did last quarter, CGC stock will keep falling.Two months ago, I wrote that ex-CEO Bruce Linton told Bloomberg that CGC's goal was to reach $1 billion CAD in sales by March 2020. With sales falling like it did this past quarter, $1 billion CAD in sales won't be reached anytime soon. What Happened to CGC Stock?Recreational cannabis revenue, the biggest portion of CGC's revenue, fell 11% from $68.9 million CAD to $61 million CAD. Even though medical and international sales rose during the quarter, total gross revenue fell 2.9%.More disturbing is the fact that total sales in volume terms (kilograms and equivalents) rose 13%. Total sales volume was 10,549 kilograms and equivalents in the latest quarter against 9,326 kilograms in the prior quarter. But comparing the June quarter with the December quarter, volume increased only 4.4%. * 7 Momentum Stocks to Buy On the Dip So that means the effective cannabis price fell this quarter. You can't keep selling 13% more product and see your gross revenue fall by 2.9%. That is a losing proposition. It also does not augur well for the future of the cannabis industry. In effect, demand was tepid and prices fell.So what does the future look like for CGC stock? Stay Wary Until Demand Shows UpCanopy Growth stock can survive for the time being since it has $3.1 billion CAD in cash and securities. But in the past six months, CGC has bled out $1.7 billion CAD of its cash and securities balance.Most of that money was received when Constellation Brands (NYSE:STZ) invested $5 billion CAD in Canopy Growth stock. It's probably not very happy that its investment has not yet paid off.If CGC keeps losing $824 million CAD each quarter, the $3.1 billion CAD balance will be mostly spent in the next year. CGC stock's market value, now worth $12.9 billion CAD, will dramatically drop. Investors will anticipate the need for another capital infusion and the related dilution effect. Canopy Growth's Game Plan for $1 Billion in SalesCanopy Growth needs to prove how it will reach $1 billion CAD in sales. Presumably, that is the break-even cash flow level of sales. It is going to take much longer than previously anticipated. At this pace, CGC will not achieve even half that amount by the end of March 2020.For example, is the company depending on future markets in the U.S. to open up? Is it solely relying on the regulatory opening of the cannabis-infused edibles market next month? Analysts are calling this "Cannabis 2.0" after the 2018 nation-wide recreational market opened.I highly suspect that is Canopy Growth's game plan. I would wait to buy CGC stock until the company shows signs of being able to sustain itself financially after this edibles market opens up.As of this writing, Mark Hake, CFA does not hold a position in any of the aforementioned securities. Mark Hake runs the Total Yield Value Guide which you can review here. The Guide focuses on high total yield value stocks and was launched on August 30. Subscribers during September receive a 20% discount, plus a two-week free trial. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Canopy Growth Stock Faces Big Problems appeared first on InvestorPlace.
Canopy Growth is best positioned to capitalize on the cannabis revolution, according to a note from Oppenheimer analyst Rupesh Parikh, who initiated coverage of the stock with a "perform" rating, which is similar to a neutral rating. Parikh called Canopy Growth the company best positioned to capitalize on the global cannabis market over time, but he is tepid on the stock due to Wall Street's "lofty" expectations from the sector. "We expect CGC to capture more than its fair share of the $150B+ global opportunity longer-term.
Canopy Growth Corporation (NYSE: CGC) co-founder and former CEO Bruce Linton has made a big splash for his reemergence into the cannabis industry. In addition to becoming a special advisor to animal health and wellness CBD company Better Choice Company and an activist investor in Slang Worldwide, Linton has been named executive chairman of Michigan-based Gage Cannabis. Gage Cannabis has earned a reputation for promoting a "high-end marijuana experience." The company uses a small-batch approach to cultivation and processing in order to deliver high quality cannabis and cannabis products.
The markets were flat today as the Fed started its two-day meeting. Cannabis ETFs reported mixed performance, and cannabis stocks traded mostly in the red.
On September 16, Aurora Cannabis was trading at 7.26 Canadian dollars. Its stock has fallen 14.7% since it reported its fiscal 2019 fourth-quarter results.
As the cannabidiol (CBD) market takes off, investors look increasingly for the stocks to buy that are driving this market. The industry received a massive boost from the 2018 Farm Bill, which legalized hemp across the United States. This frees hemp companies from Schedule I restrictions, allowing them relative freedom to operate within and outside of the United States.Other more mainstream marijuana players have entered the CBD market. Canopy Growth (NYSE:CGC) grows the product and rumors abound that Aurora Cannabis (NYSE:ACB) will soon follow. However, both stocks have fallen in recent months due to compressing multiples and falling prices in dried cannabis. * 7 Momentum Stocks to Buy On the Dip Some CBD stocks have not seen dramatic stock price increases. The following stocks to buy appear well-positioned to profit CBD-focused investors:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Aphria (APHA)Source: Shutterstock Aphria (NYSE:APHA) has become the world's third-largest cannabis producer. With prices of dried cannabis in decline, CBD has become one distinct outlet for adding value. It already offers an extensive line of products. In the U.S., it has worked to build partnerships to bring CBD products to market as it awaits legal status for its marijuana-based CBD.In addition to the high capacity, APHA stock also offers a low valuation. It maintains a forward price-to-earnings (PE) ratio of around 23.7. It also trades at just over 9.5 times sales, which comes in well-below many larger peers. Moreover, Wall Street believes it will turn profitable this year. Analysts forecast four Canadian cents (three cents) per share in earnings this year and 32 Canadian cents (24 cents) per share in 2020.APHA stock has also avoided the severe decline to hit larger Canadian names in the cannabis industry. Despite giving up most gains from earlier in the year, the price of APHA has remained steady since about May. Moreover, it has logged a 20% gain since the beginning of the year. This stability should position APHA stock to recover once sentiment turns. Charlotte's Web Holdings (CWBHF)Source: Shutterstock Charlotte's Web Holdings (OTCMKTS:CWBHF) has not yet become a household name. However, that may quickly change for the Boulder, Colorado-based producer and distributor of hemp-based CBD products. With companies such as Kroger (NYSE:KR) and CVS (NYSE:CVS) stocking their products, the public should increasingly recognize Charlotte's Web as more than just a children's book.The stock suffered in August as it reported an earnings and revenue miss. Still, amid the ups and downs, the stock has risen by nearly 65% since the beginning of the year. Investors may also pick it up at a discount as it has fallen by over 23% since just before the company missed estimates.Despite the miss, revenue grew by 45.3% year-over-year. Although profits fell from the four cents per share in the same quarter last year, operating expenses nearly doubled to fund expansion. * 7 Tech Stocks You Should Avoid Now Moreover, the forward PE ratio stands at just 24, a bargain considering the price-to-sales (PS) ratio of many unprofitable cannabis stocks exceeds that figure. Furthermore, Wall Street forecasts profit growth of 58.3% this year and 263.2% the following year. Given the low valuation and massive growth coming, investors should put CWBHF stock on their stocks to buy list before it becomes better known. Curaleaf Holdings (CURLF)Source: Shutterstock Like Charlotte's Web, Curaleaf Holdings (OTCMKTS:CURLF) is another stock on the verge of becoming better known. Based in Wakefield, Massachusetts, Curaleaf produces cannabis and hemp-based CBD products for wellness.Though much of its business faces Schedule I-based restrictions, it has managed to establish operations in 12 states. Still, with hemp-based CBD, they have the segue needed to go nationwide no matter what happens with marijuana laws.Moreover, the market seems intent on pushing CURLF stock higher. Despite a recent earnings and revenue miss, Curaleaf stock rose on a 231.2% increase in revenue year-over-year. Furthermore, despite volatility in the equity, CURLF stock has risen by almost 60% year-to-date. It has also begun to recover from a downturn in the stock that saw its value fall by about 43% between early May and mid-July.Admittedly, multiples offer a mixed picture. A PS ratio of 25.3 makes this one of the more expensive CBD stocks to buy. Also, it will need loosened Schedule I restrictions to achieve its potential. However, with it trading below its book value, investors should consider CURLF stock before it becomes more recognized. CV Sciences (CVSI)Source: Shutterstock CV Sciences (OTCMKTS:CVSI) is the leading CBD oil maker in the U.S. It sells CBD-based products under its PlusCBD brand. The San Diego-based company also runs a specialty pharmaceuticals division that produces CBD products to treat specific medical conditions.The company continues to position itself for expansion as it has begun construction on a 45,500 sq. ft. facility in the San Diego area. This will allow the company to increase production by an estimated 500%.CVSI stock earned a profit last year of nine cents per share. Despite rising revenue, it will swing to an estimated loss of four cents per share this year as the company invests in expansion. However, this should not take CVSI off of any stocks to buy list. Wall Street predicts a profit of 13 cents per share next year. * 7 Discount Retail Stocks to Buy for a Recession CV Sciences stock has lost about 25% of its value since the beginning of the year. Still, CVSI should become one of the stocks to buy hinges on its valuation. Despite the massive growth, CV Sciences trades at about 24.2 forward earnings and less than 5.2 times company sales. With revenue and sales set to spike, this makes CVSI stock look like a buying opportunity, not one investors should unload. GW Pharmaceuticals (GWPH)Source: Shutterstock GW Pharmaceuticals (NASDAQ:GWPH) has built its future on prescription-based CBD products. It manufactures Epidyolex, the first CBD-based drug approved by the Food and Drug Administration (FDA). By taking this step, it made itself a leader in prescription-based CBD products. Now that its other drug, Sativex, is now on the market in several countries, its prospects should only improve.At a forward PE ratio of almost 111 and trading at more than 31 times sales, GWPH may not look like it belongs on any stocks to buy list. However, Wall Street expects the company to turn profitable next year. It also forecasts 93.4% earnings growth in fiscal 2019 and 295.2% the following year.I recommended a buy on GWPH stock at $155 per share. Admittedly, that prediction may have come early. However, with the prospects for GW Pharma to lead this niche, I stand by the overall forecast.Moreover, it has seen fewer negative effects from the selloff in cannabis stocks than larger peers. Although it has fallen by more than 27% from its 52-week high, it has still risen by about 43% year-to-date. Given the strong sales of its CBD products, expect to see revenue and profit increases in the company's pipeline. HEXO Corporation (HEXO)Source: Shutterstock HEXO (NYSE:HEXO) presents a unique opportunity in many areas of the cannabis industry, including CBD-based products. With its 30% market share in its home province of Quebec, it maintains a base from which it can move into markets in both Canada and the U.S. Moreover, with its alliance with Molson Coors (NYSE:TAP), it presents a unique opportunity in the CBD and cannabis-based beverage market.HEXO stock trades at just over $4.20 per share as of the time of this writing. It has lost about half of its value since peaking at $8.40 per share in late April. This makes HEXO somewhat risky as it has followed larger Canadian peers on a downward trend.Our own Laura Hoy likes HEXO stock but warns against holding a position going into earnings. I agree with this sentiment. However, the decline has taken its forward price-to-earnings ratio to about 47. While that may seem high amid flat growth for 2019, analysts are looking for 170.6% earnings growth for fiscal 2020. * 10 Battered Tech Stocks to Buy Now Although HEXO stock remains one of the riskier stocks to buy, its position in Quebec and its alliance with Molson Coors should give the company market niches with which it can lead in CBD and perhaps cannabis in general. Planet 13 Holdings (PLNHF)Source: Shutterstock Planet 13 Holdings (OTCMKTS:PLNHF) has made a name for itself in its home market of Las Vegas through retailing. Its Cannabis Entertainment Complex, otherwise known as the "Superstore," attracted a record number of visitors in August.But aside from its gaining fame as a retailer, it also happens to produce CBD. In May, Planet 13 announced the introduction of its Planet M CBD brand. They made this available at its Superstore, the Fashion Show Mall, with plans to expand to other retail outlets. They also made Planet M available online.This strategy appears effective. Analysts believe that this is one of the stocks to buy in large part because it will probably turn a profit this year. Earnings should grow quickly from there. Analysts predict an increase of 118.2% this year and a staggering 450% in fiscal 2020. Despite the massive growth, it trades at only 17.5 times forward earnings and just over 16.1 times sales.PLNHF stock has stagnated since May, trading in a range between $1.80 and $2.20 per share. However, it has not suffered the decline seen in most other cannabis stocks. It has also risen by around 107% since the beginning of the year.As the Superstore increasingly becomes a destination for cannabis shoppers, it should not only bolster sales of CBD products, but it should also boost the growth of PLNHF stock.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 * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post 7 CBD Stocks to Buy That Are Still Worth Your Investment Dollars appeared first on InvestorPlace.
The cannabis industry as a whole continues to face unforeseen pressures, and Canopy Growth (NYSE:CGC) hasn't been an exception to that headwind. But, of all the marijuana stocks worth a closer look now, CGC stock is at the top of that relatively short list.Source: Jarretera / Shutterstock.com That's not been the case in a long, long while. In July, CGC's board of directors, which is mostly controlled by the company's single-biggest shareholder Constellation Brands (NYSE:STZ), terminated CEO Bruce Linton. This led to a disruption at a critical time for cannabis companies.A sequential decline in quarterly revenue rattled owners of Canopy Growth stock in August as well, further fanning already-bearish flames. The backdrop has been decidedly grim.InvestorPlace - Stock Market News, Stock Advice & Trading TipsYet, this month's rebound effort is undeniable, and arguably well-supported. Canopy Growth Stock Takes the LeadSince early this month, cannabis stocks have started to put some distance between themselves in terms of performance. Tilray (NASDAQ:TLRY) is up 21% since the end of August, while Aurora Cannabis (NYSE:ACB) has broken even and CannTrust Holdings (NYSE:CTST) has given up 13% of its value.CGC stock is at the upper end of that performance race, gaining nearly 19% this month.The divergence likely has much to do with an increasing understanding of each companies' nuances following a wave of earnings reports. * 7 Momentum Stocks to Buy On the Dip That's certainly been the case for Canopy Growth, which has enjoyed the added benefit of interim CEO Mark Zekulin making a proactive effort to unwind some of the damage that's been done to Canopy Growth stock over the course of the past two months. His focal point?"We have been in construction for 70 months," Zekulin told CNN. "We have four months left on that expansion plan. … A lot of that work is now done and the real focus is taking the chess board that we've set and really focusing on now executing."The market seems to be buying the idea, although there's an even bigger reason CGC stock could have rekindled its bullishness. Winning Where it CountsThe cannabis industry is still gelling, and its players are still trying to figure out their place in it.Canopy Growth's place is, for the most part, recreational marijuana -- and recreational marijuana in Canada in particular. For the quarter ending in June, 72% of revenue was made up by sales of recreational cannabis, and only 12% of its sales were made to international customers. And, 80% of its gross sales were of dry cannabis used for smoking.The revenue headwind was and is a legitimate concern. But a couple of key details were glossed over by a market that was ready to see the glass as half empty rather than half full. Chief among those details is the fact that the revenue lull wasn't the indication of waning demand it was being made out to be.The evidence: The average selling price of cannabis, per gram, in Canada hasn't swayed since mid-July, holding steady at $7.22 CAD. Prices in the United States, meanwhile, have actually improved since mid-July, negating the chatter that supply has far outpaced demand.In that vein, although the quarter ending in June wasn't the one Canopy Growth stock owners were hoping for, demand continued to rise. Adult-use purchases of cannabis in Canada reached a record $85 CAD million in June, rising for a fourth-straight month.That's right in Canopy's sweet spot. And it's happening at a time when the company is about to maximize all those pieces on the proverbial chess board. The Bottom Line for CGC StockDon't misread the message. Canopy still has much to prove, and even with the recent selloff, the stock remains outrageously overvalued.That's not a particularly big liability in this instance though. While Canopy Growth admittedly spent too aggressively on acquisitions, those acquisitions do improve the company's capacity to connect with consumers and secure more supply. Canopy just needs to get more out of those assets. That's in the works, even before a new CEO takes the helm.How far or how high that might take CGC stock remains uncertain. But, up 20% from last month's low is a good start to a rebound. And it has plenty of backing via lip service.You could certainly do worse.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Momentum Stocks to Buy On the Dip * 7 Dow Titans Breaking Higher * 5 Growth Stocks to Sell as Rates Move Higher The post Canopy Growth Stock Emerges as Top Pick appeared first on InvestorPlace.
Bruce Linton has resurfaced, as the high-profile former co-chief executive of Canopy Growth Corp. has been appointed "Special Advisor" to Florida-based Better Choice Co. Inc. , an animal health and wellness CBD company. Better Choice's stock soared 21% in morning trading, with volume of 65,000 shares already about 13-times the full-day average. Linton, who was fired from Canopy in July, will be working to help expand Better Choice's cannabinoid (CBD) animal research, build out an internal intellectual property, data and analytics platform and explore strategic alternatives and partnerships. "Better Choice is focused and has access to funding to deliver research-driven outcomes in the animal health and wellness industry, as the Company develops a data- and research-driven approach to product development and efficacy within the cannabinoids-as-ingredients space," Linton said. The stock has now lost 55% year to date, while the ETFMG Alternative Harvest ETF has slipped 1.0% and the S&P 500 has gained 20%.
Aurora Cannabis (NYSE:ACB) recently reported earnings and sales came up short. As such, Aurora Cannabis stock sold off. It's been a painful run for cannabis stocks over the past few months as they desperately lack a catalyst to send their share prices higher.Source: Shutterstock Earnings clearly won't be it for Aurora Cannabis stock at this point. However, there is one silver lining to the recent decline: no new lows.That's right. Sometimes good news can be found in bearish developments. Should ACB stock log a higher low, then it may be on the road to recovery. Let's explore:InvestorPlace - Stock Market News, Stock Advice & Trading Tips Revenue MissOn September 11, Aurora Cannabis reported revenue of 98.84 million CAD. That missed analysts' expectations by more than 4.5 million CAD. While that many not seem like a big deal, investors have to take the miss in context. * 7 Tech Stocks You Should Avoid Now It's the company's second straight revenue miss and its fifth miss out of the last six quarters. Further, Aurora Cannabis doesn't have the type of valuation that supports its stock price when it misses on top-line sales. That goes for most if not all of the cannabis industry, including Canopy Growth (NYSE:CGC), Aphria (NYSE:APHA), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON) and others.In other words, these companies have incredibly high valuations that are all banking on equally incredible growth. And while sales quintupled year-over-year in the most recent quarter for ACB, it came up short of expectations.It doesn't help that margins have been under pressure as well.It's not that Aurora Cannabis has a poor balance sheet or that the cannabis market is hitting a dead end. It's that sentiment is not bullish, and momentum is bearish for cannabis stock right now. ACB and others need some positive catalysts, and missing headline expectations isn't one of them. Trading Aurora Cannabis StockAhead of earnings, Aurora Cannabis stock had rallied through the 50-day moving average. However, it ran right into downtrend resistance (blue line). Had the results been strong, investors may have been in store for a strong finish to the week. Click to EnlargeNow, shares are down about 8.5% from Wednesday's close. With the fall, the ACB stock price is back below the 20-day and 50-day moving averages. When these two moving averages went from support to resistance is outlined very clearly on the chart via purple arrows.That was a prelude to failing support that ushered in a wave of selling. Luckily for InvestorPlace readers, they saw this break months ago and have been able to sidestep some of the pain.The post-earnings decline also solidified downtrend resistance. As we discussed at the top of the article though, the silver lining is that ACB stock has not made new 2019 lows -- at least, not yet.From here, bulls need to make sure Aurora Cannabis stock stays above $5.40. If this level gives way, a test of downtrend support becomes possible, as does a test of the $5 mark. Instead, if ACB stock can hold up and avoid a new low, it can start to work higher despite a lower-than-expected revenue result. Rallying on weaker-than-expected results can be viewed as a bullish development, as it may suggest all the bad news is priced in.The simple way to evaluate Aurora Cannabis stock from here? Note the $5.40 benchmark. Below it is bad, above it is constructive. Bottom Line on ACB StockLet's not mince words here: Aurora Cannabis is very much a speculative "prove-it" stock. That is, it's not a blue-chip name like Microsoft (NASDAQ:MSFT) or Apple (NASDAQ:AAPL). Nor is it a dependable staple going through a hard time like Boeing (NYSE:BA).While Aurora Cannabis is one of the notable names in a high-growth emerging industry, it's still a speculative name that needs to prove to investors that it can turn that revenue growth into cash flow and continue to expand with discipline. From CFO Glen Ibbott:We continue to see strong growth in cannabis revenues in both medical and consumer categories. Our cultivation execution continues to drive production costs lower and improve gross margins. Aurora's diversified product portfolio remains in demand with patients and consumers alike.Aurora has seen a significant increase in assets, climbing from $1.43 billion at year-end 2018 to $4.2 billion in its most recent quarter. In the same time frame, total liabilities have increased from $253 million to approximately $850 million. While liability growth outpaces asset growth, its assets far outweigh liabilities.ACB has staying power, at least in the short term. But what it and the recent of the cannabis space really need is a catalyst and better sentiment.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 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post Is Aurora Cannabis Stock a Buy Despite a Revenue Miss?Â appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) joined companies like Tilray (NASDAQ:TLRY), Canopy Growth (NYSE:CGC) and Cronos (NASDAQ:CRON) when its recent earnings report sent ACB stock on a 9% tumble.Source: Shutterstock Because of this, there has been a wide-scale bear move. The fact is that investors have been too optimistic about the growth prospects from Canada. There have also been issues with supply chains in the country as well as black market activities.So when may things change? It may take a while.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut even before this, the ACB stock price had been under increasing pressure. Since March, the shares have gone from $10 to $5.70.Now, as for the fiscal fourth-quarter earnings report for the company, there was still lots of growth. On a quarter-over-quarter basis, revenues jumped by 52%. There was also an annual 72% ramp. * 7 Tech Stocks You Should Avoid Now Yet Wall Street wanted much more. ACB reported C$98.9 million on the top-line while the consensus was calling for C$103 million. Note that before this the company had tempered its annual guidance.Something else about the earnings report that likely weighed on Aurora Cannabis stock was the softness in the global business. Consider that there was only a 12% increase in the medical segment in Europe to C$4.5 million.InvestorPlace.com's Josh Enomoto summed things up as follows:"The cannabis market has stepped out of the honeymoon phase and into the 'show me' phase. In other words, investors are tired of hearing bedtime stories. Instead, they want some evidence that these tales are based on facts." Bad News for ACB StockAurora Cannabis stock got hit again this week, off about 4%. The reason: negative commentary from Stifel Nicolaus analyst Andrew Carter. Primarily because of the earnings report, especially with the sluggishness in foreign markets, he slapped a "sell" rating on the shares. He lowered his price target from C$7 to C$5.He also thinks the terrible sentiment in the cannabis sector will make it more difficult for Aurora Cannabis to raise more money. No doubt, this could mean that any equity offering could see substantial dilution - which could mean even further deterioration of the stock price. An Upside for ACB StockDespite all the bad news, there remain silver linings. Aurora Cannabis has the advantage of scale and a global infrastructure (there are 15 production facilities, with sales and operations in 25 countries). For example, during the quarter the company produced over 29,000 kilograms, compared to 15,590 for the prior quarter.Another advantage for Aurora Cannabis stock is that it has Nelson Peltz as a strategic advisor. He is a top activist investor who has extensive experience with consumer goods companies like Procter & Gamble (NYSE:PG), Mondelez (NASDAQ:MDLZ), and Wendy's (NASDAQ:WEN). Peltz should be invaluable in providing high-level contacts and funding resources.And finally, there is the catalyst of "Legalization 2.0." This refers to when Canada will legalize the sale of cannabis edibles, beverages and vaping products. The law will require a 60-day permit process, after which sales will be allowed.This should help to boost revenues. However, in light of the concerns with cannabis companies right now, there may not much action with Aurora Cannabis stock until next year. So for now, there is probably no rush to make a buy.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 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post It Doesn't Look like ACB Stock Is Going Anywhere This Year appeared first on InvestorPlace.
We are coming up on the one year anniversary of the nationwide legalization of cannabis in Canada. In that year, shares of Canadian cannabis leader Canopy Growth (NYSE:CGC) have been on a roller coaster ride. Canopy Growth stock shot out of the gates, fully loaded with guns blazing, in late 2019.Source: Jarretera / Shutterstock.com Canopy had scored a big, multi-billion dollar investment from alcoholic beverage giant Constellation Brands (NYSE:STZ), leveraged that investment to obtain more growing capacity than peers, and from day one, captured about 30% of the Canadian cannabis market.In response, CGC stock soared from $25 in July 2018, to over $50 by October.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCanopy Growth stock has since swung violently between $25 and $50 over the past several months. In late 2018, CGC stock dropped towards $25 as global growth concerns weighed on what was unchecked optimism in the cannabis space.Then, in early 2019, CGC stock roared higher as the company made promising international expansion moves, especially in the U.S. Since, the stock has tumbled, mostly because the company's growth ramp in Canada has meaningfully slowed in 2019. * 7 Tech Stocks You Should Avoid Now Net net, it's been a wild year for CGC stock. What's next?I think the next big move in CGC stock is likely to be a rally back towards $50. Why? Three big reasons. Those three reasons are as follows. Capacity Build-Out and Sales GrowthThe first big reason to believe that CGC stock could rally back towards $50 over the next few quarters is that the company is laying the groundwork for re-accelerated sales growth by rapidly expanding growing capacity.Specifically, despite sluggish and disappointing sales trends recently, Canopy Growth has managed to substantially increase its growing capacity during this slowdown. Last quarter, Canopy's harvest measured around 41,000 kilograms - up nearly 200% sequentially and over 300% year-over-year, and by far away the biggest harvest of any Canadian cannabis company.Since then, the company has only increased growing capacity. They just won an extraction license for a new facility in Saskatchewan, which is expected to come online in Fall 2019 and extract around 5,000 kilograms of hemp a day.Broadly, then, Canopy is rapidly increasing their growing capacity. Ultimately, this ends with Canopy having a lot more supply than all of its competitors, which results in Canopy selling a lot more weed than all of its competitors, too.Big picture - Canopy's sales trends are slowing right now, but huge growing capacity expansions imply that this slowdown will be replaced by acceleration pretty soon. Rec 2.0 Will Create A Rising Cannabis TideThe second big reason to believe that CGC stock could rally back towards $50 over the next few quarters is that the legalization of cannabis 2.0 products will create a rising tide across the whole cannabis industry that should lift all boats.Specifically, in late 2019, Canada is set to introduce a whole new portfolio of cannabis products into the legal market, including edibles and vapes, which are two of the most popular ways to consume cannabis. The introduction of these new cannabis products will increase the legal market's reach, broaden demand and interest, and ultimately grow the market. This broad market growth should provide a rising tide which lifts all boats.Further, because of the company's huge capacity build-out, Canopy Growth could actually be a huge winner with rec 2.0. Just consider, at the same time that a slew of new cannabis products are months away from coming to market, Canopy is aggressively building out their cannabis supply.That combination ultimately implies that Canopy is gearing up to sell a bunch of rec 2.0 cannabis, meaning growth rates in 2020 could look a lot prettier than they do today. Gross Margins Will Improve MeaningfullyThe third big reason to believe that CGC stock could rally back towards $50 over the next few quarters is that gross margins are set to improve meaningfully.Canopy's gross margin performance to-date has been disappointing. This was once a 40%-plus gross margin business. Over the past few quarters, gross margins have dipped into sub-20% territory as the company has emphasized capacity build-out and retrofitting. But, this capacity build-out won't last forever.Instead, it appears that the bulk of this capacity expansion is over. If so, then overall gross margins will improve meaningfully over the next few quarters, since gross margins last quarter ex capacity and retrofitting impacts were around 32% - versus the reported 15%.Further, management plans to start optimizing their growing facilities soon. That will provide a lift to gross margins, too. Even further, rec 2.0 cannabis products carry a higher gross margin, so that will provide another lift to gross margins.At the end of the day, management is pointing towards 40% gross margins by the end of fiscal 2020, and the fundamentals make it seem like that target is entirely doable. Thus, over the next four quarters, gross margins have potential to go from 15% to 40%. That's a big enough uptake to provide a meaningful tailwind for Canopy Growth stock. Bottom Line on Canopy Growth StockCGC stock has been through turbulent times. It's unlikely that this turbulence will subside any time soon, but turbulence is a double-edged sword. It means big drops and big rallies. The next move in Canopy Growth stock will likely be a big rally, so taking advantage of the turbulence and buying Canopy Growth on this dip seems like a smart move.As of this writing, Luke Lango was long CGC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Recession-Resistant Services Stocks to Buy * 7 Hot Penny Stocks to Consider Now * 7 Tech Stocks You Should Avoid Now The post 3 Reasons Canopy Growth Stock Could Rally Big in 2020 appeared first on InvestorPlace.
Today at 2:10 PM ET, the S&P; 500 Index fell 0.3% as investors watched rising oil prices. The cannabis sector also fell today, as its ETFs traded in the red.
Call it the secret ingredient that compels a stock to move higher. It's like an unstoppable magnetic force that pulls stocks up.Source: Shutterstock It really shouldn't be a secret. It's discussed in every company analysis and every Finance 101 class. It's available for everyone to see for every publicly traded company.And yet, investors look right past it, especially in early stage companies and industries when the stocks and numbers tend to be more volatile.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThis not-so-secret, secret ingredient is sales. Or revenue, as it's called on the balance sheet.The more a company brings in, the more upside potential for a stock.Here's the deal: Marijuana companies are right now hitting the investing sweet spot where they are starting to generate significant revenue -- yet stock prices are still down.That makes NOW the time to buy. A Proven Path to Big ProfitsWhen we look back on 2019, I think we'll clearly see it was one of the best buying opportunities ever in marijuana stocks. Prices are down even as legalization spreads and sales jump. Eye-popping long-term growth is in the cards, but investors aren't focused there yet.History shows the massive profits you can earn. Take a look at both Netflix (NASDAQ:NFLX) and Amazon (NASDAQ:AMZN) and some of the mouth-watering opportunities along their growth paths.This is the chance to buy big growth at low prices.Now let's look at a few marijuana stocks so you can see how they are in that same early stage sweet spot.Acreage Holdings (OTCMKTS:ACRGF) is a big name in the cannabis industry. Its board includes three of the most connected people on the planet: former U.S. Speaker of the House John Boehner, former Massachusetts Governor and current U.S. presidential candidate William Weld, and former Prime Minister of Canada Brian Mulroney. The company is also central to perhaps the blockbuster marijuana story of the year (so far). Canopy Growth (NYSE:CGC), the biggest cannabis company on the planet, agreed to buy Acreage for $3.4 billion when marijuana becomes legal in the U.S. It was practically a flashing neon sign that U.S. legalization is coming sooner than most expect.Still, the stock has been cut in half this year despite expectations for revenue to soar more than 3,800%, from $21.1 million in 2018 to $838 million by the end of 2021.Remember Netflix earlier? If that doesn't look like a buying opportunity, I don't know what does.Harvest Health & Recreation (OTCMKTS:HRVSF) is a lesser-known but equally dramatic example. It has the most retail licenses to open marijuana dispensaries in the U.S., and it has aspirations to be the biggest cannabis company in the world. That's bold, but the company also has strong management, a solid cash position, and a path to profitability thanks to growing revenue.Here again, we have a stock down 50% since April -- at a time of exploding revenues … as in from $47 million in 2018 to $1.3 billion by 2022. That 2,665% growth if executed on can be bought for pennies on the dollar. Now Is The TimeI could show you plenty more similar charts, but I think you get the point. Marijuana stocks are cheap, especially considering the explosive revenue growth that's anticipated from the biggest players.Last year, legal marijuana sales in the United States hit $10.4 billion, which is nearly 100% growth over the three-year period going back to 2015. This year, sales should grow nearly 24% to $12.9 billion.Now just imagine when legal weed is opened up to the entire $21 trillion U.S. economy. We're talking exponential growth potential in a single stroke.Marijuana is a massive trend still in its early stages, with the U.S. waiting in the wings to become the biggest market in the world. Any time governments open a huge new market like legal marijuana, investors can win very big. The key is to own the right investments before that happens, and now is the perfect time to start.Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world's biggest, most revolutionary trends BEFORE anyone else. The power of being "first" gave Matt's readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you're interested in making triple-digit gains from the world's biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks Under $5 to Buy for Fall * 5 Stocks to Avoid Amid the Ongoing Trade War * 7 5G Stocks to Buy Now for the Future The post The 'Secret' Ingredient Set to Send Marijuana Stocks Soaring appeared first on InvestorPlace.
On September 12, Aurora Cannabis (ACB) Chair Michael Singer spoke with CNN Business. He said, “We expect to have a significant footprint in the US in the coming quarters." The company also highlighted its “laser-focused” stance on the hemp-derived CBD (cannabidiol) market in the US on its fourth-quarter earnings call. BDS Analytics and Arcview Market […]
The consensus target price for Cronos Group stock fell to 19.88 Canadian dollars from 20.3 Canadian dollars in August, which represents a fall of ~2.07%.
At the beginning of last month, Aphria (NYSE:APHA) was on top of the world. The cannabis company's fiscal fourth quarter revenue blew past estimates, catapulting Aphria stock higher by more than 40%. Investors were elated.Source: Shutterstock APHA stock is now down 10% from that peak and seemingly still drifting lower. So much for the notion that one of the pot industry's rare profitable companies is a must-own name.There's more to the setback than just a little bad luck though. The immediate evaporation of all that enthusiasm is an indication of just how unconfident the market is in Aphria. Ditto for its peers, which have performed similarly poorly for the same timeframe.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe frustrating part is, this particular stock actually deserves a little more credit than it's getting. Aphria Stock Fails to LaunchAs a refresher, last quarter's top line of $128.6 million easily topped estimates of $97.8 million. The bulk of that figure was contributed by the acquisition of an existing distribution business in Europe, called CC Pharma.Canadian sales of recreational marijuana only came to $18.5 million, though that figure was still up 85% year-over-year. * 7 Discount Retail Stocks to Buy for a Recession Most noteworthy of all, Aphria turned a profit of five (Canadian) cents per share. Even the most notable names in the business like Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) are still losing money.The numbers were mostly irrelevant a couple of days after the earnings figures were posted though. That's how long it took the post-earnings bullishness to fade. It also was more or less how long it took other cannabis stocks to come down off of their most recent post-earnings high (if they created one at all).What gives?Although cannabis has a clear future, most of the highly-touted and highly-traded cannabis stocks are grossly overvalued compared to the kind of revenue they'll be able to produce even in the distant future. It's the unspoken reality most marijuana investors quietly suspect but are hesitant to voice.The irony is, Aphria is something of an exception to that unspoken paradigm. It just doesn't matter. Aphria Stock Is Reasonably ValuedThe widely-applied pessimism is certainly understandable. Canopy Growth lost a ton of money last quarter, even after stripping out the impact of a writedown. Tilray logged a loss last quarter too, of $31 million, tripling its loss from a year earlier and leaving investors wondering if there's actually any money to be made in the pot business. There is, and Aphria is making some of it.Granted, it's not easy, and probably won't be consistent income for a long, long while. But it's there. Last quarter, Aphria reported an adjusted EBITDA of $1.85 million on its cannabis operations. Its distribution business, separately, added $3.87 million worth of EBITDA to the mix.It's not great, but it's something. And, as Aphria scales up and gets better at what it does, the margins as measured by percentage will improve. Aphria believes they'll start to meaningfully improve this year, in fact, forecasting an EBITDA total of between CA$88 million and $$95 million for the fiscal year that just began.Multiplying that figure by a typical enterprise value/EBITDA figure of 14 would translate into a market cap on the order of $1.3 billion. Aphria's is at $1.7 billion, which is more than it theoretically should be, but some tolerances have to be made for the rapid sales and EBITDA growth the company is producing.On a price/sales basis, the market cap of $1.7 billion is a very reasonable 2.5 times this year's expected top line of between CA$650 million and CA$700 million. That's right around the marketwide average. And, let's not forget that Aphria is also legitimately profitable. Looking Ahead for Aphria StockEven the marijuana movement's most enthusiastic investors struggle to say pot stocks didn't get ahead of themselves, driven higher by hype before these companies knew everything they need to know. Much of the weakness seen since March of this year reflects the realization that simply being in the cannabis business is no assurance of success.Right or wrong, Aphria stock is guilty by association. When most other names in the business are losing ground due to valuation concerns, the selling can be rather indiscriminate.Aphria's $670 million worth of goodwill sitting on the balance sheet doesn't help either, as it could easily turn into a writedown sooner or later.Still, APHA stock is a name worth adding to your watchlist, as it's one of the more sensible stocks to own in a new industry that drove investors into a wild frenzy last year. The question, of course, is figuring out when that groupwide bearish pressure might finally ease up.As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about him at his website jamesbrumley.com, or follow him on Twitter, at @jbrumley. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Unfortunately, Aphria Stock Suffers from Guilt by Association appeared first on InvestorPlace.
For the cannabis sector, there has been a grueling bear market since April or so. Even the tier-one companies have suffered major double-digit declines, such as Canopy Growth (NYSE:CGC), Cronos Group (NASDAQ:CRON) and Tilray (NASDAQ:TLRY).Source: Shutterstock Then again, the run-up that came before the downtrend was parabolic as the sentiment got excessive. Let's face it, there was too much optimism about the potential impact from the legalization of the Canadian market. It also did not help that there were problems with the supply chain as well as black market activity. So when things did not pan out as expected, a painful correction was inevitable.But I do think this is presenting some interesting opportunities in the space. For example, take a look at Hexo (NYSE:HEXO) stock, which has been cut in half during the past six months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe company is certainly well positioned to benefit from the long-term potential in the Canadian market. Keep in mind that Hexo dominates the Quebec market, with a 30% share.What's more, the company continues to make strides with production. Hexo has aggressively expanded its footprint to about 1.8 million square feet, with annual production of 150,00 kilograms. * 7 Discount Retail Stocks to Buy for a Recession M&A has also been critical. To this end, Hexo shelled out $197 million for Newstrike Brands Ltd, which added to annual capacity by about 150,000 kilograms.Yet the focus on production has not been about quantity over quality. Consider that the company has been a heavy investor in innovation and R&D, which has allowed for higher margin offerings.According to Hexo CEO Sebastien St-Louis, on the latest earnings call: "We now have 25 PhDs on staff. They're focused on developing new and innovative products for the market, best-in-class technology for our 'Powered by HEXO' experiences. Building on our innovative technology is critical in building brands." Strategic Alliance With Molson Coors BrewingI think a critical factor for Hexo stock is its partnership with Molson Coors Brewing (NYSE:TAP). No doubt, there are the benefits of leverage from the broad capabilities of global distribution, marketing expertise and logistics. Such factors will likely prove essential in breaking through the noise in the marketplace.The deal with TAP will also allow Hexo to benefit from the "Cannabis 2.0." This refers to October 17th, when it will be legal to sell cannabis extracts in Canada (although the selling will not be allowed until mid-December because of the requirement to get a permit). The market is likely to be significant, with the potential for $1 billion+ in spending next year.To prepare for this, Hexo and TAP have been jointly creating a variety of products, such as beverages, gummies and vapes. In other words, there could be a nice catalyst for revenue growth. For example, in regards to fiscal year 2020, Hexo is projecting that the top-line will hit a hefty $400 million and that there will be a doubling in fiscal Q4. Bottom Line On The Hexo Stock PriceGiven the consistent downtrend in Hexo stock, it's understandable that investors want to back off. There are legitimate fears that this could be the proverbial "falling knife."Yet it really does look like the sentiment for Hexo stock has gotten to overly negative levels. Besides, the growth story looks intact, especially with Cannabis 2.0, and the company has strong production and a solid position in the Canadian market. So for investors with a long-term perspective, I think Hexo stock looks like an interesting play at current levels.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 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post The Molson Coors Deal Will Be a Game Changer for HEXO Stock appeared first on InvestorPlace.
Coming down from a high can be a real drag. A high stock price, that is. Case in point, Canopy Growth (NYSE:CGC) which closed Friday at $27.46, coming down from a 52-week high of $56.90. There are industry concerns in terms of overcapacity of dry cannabis that has taken CGC stock lower. In addition, the company's missing analyst estimates for first quarter of fiscal 2020 didn't help in terms of stock momentum.Source: Shutterstock However, I am of the opinion that the downside might be overdone for Canopy Growth stock. I further believe that any level below $30 is attractive for gradual exposure to CGC. Before I talk about the positive triggers, I must mention that Canopy Growth is for long-term exposure.The industry is still at an early growth stage and cash burn will continue. At the same time, CGC is well positioned to be among the leaders in the cannabis (recreational and medicinal) industry. It therefore makes sense to be invested in a potential value creator.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Spectrum Therapeutics will Drive GrowthSpectrum Therapeutics is a wholly owned subsidiary of Canopy Growth. The subsidiary is focused on research & development related to medical therapies. I believe that Spectrum is a key growth and margin expansion catalyst for Canopy Growth in the next 3-5 years.To put things into perspective, Spectrum already has 1,000 patients participating in clinical trials. The company has 60 to 70 trials ongoing or completed.The key point -- Spectrum is targeting medical therapies in sleep aid, pain relief, anxiety relief and animal health products. * 10 Stocks to Sell in Market-Cursed September With a broad target market, export licenses in 10 countries and a deep pipeline of clinical trials, Spectrum is positioned to deliver value for CGC.It is worth mentioning that CGC already has 111 patents with 270 patent applications. This underscores the point of intense R&D that is likely to translate into high-margin medicinal products.Amidst the bull talk, it is important to mention that even when medicinal products are launched; it would need high marketing expenses. Margins can be suppressed and EBITDA growth will be very gradual. Higher Margin Product LaunchIn the first quarter results release, CGC has mentioned that the company will be launching value-add higher-margin products in October 2019, as the second phase of Canadian legalization comes in.The high-margin products will potentially include beverages, athletic drinks and various wellness products. As an example, the acquisition of "This Works" will allow the company to launch range of natural skin care products. Similarly, cannabis-based beverages and vapes are in the pipeline.CEO Mark Zekulin said on last month's post-earnings conference call: "We believe that high quality cannabis beverages that offer sophisticated taste, better bioavailability and dose control, along with zero or low calories options and little or no drug interaction, will appeal to not only to current cannabis consumers, but also expand the cannabis consumer category to reach a larger portion of the population."Even with the launch of valued-added high-margin products, EBITDA margin expansion is unlikely on an immediate basis. But I do expect positive impact well into 2020 and 2021. Observations on Cash BurnFor 1Q 2020, CGC reported negative operating cash flow of $158 million. This would imply negative annual cash flow of $630 million. Considering the company's investment in R&D, sales and marketing, among others, I believe EBITDA margin will remain depressed. Along with this, operating cash flows might remain negative.However, as of June 2019, CGC reported cash & equivalents of $1.8 billion. Considering the annual rate of cash burn, the current cash holding provides a buffer for three years. This is just an approximation, but seems to imply that Canopy Growth has enough cash to continue investing in research and marketing.At the same time, the company is backed by Constellation Brands (NYSE:STZ), which I interpret as meaning that an extended period of cash burn is not a concern. * 10 Battered Tech Stocks to Buy Now I do expect consolidation in the cannabis industry and Canopy Growth stock is likely to have a good acquisition appetite. Final Thoughts on CGC StockCGC stock has trended lower in the last 12 months, understandably, considering that cash burn worries the markets. But the company's revenue growth has remained stellar.At the same time, Canopy Growth is among the best in the industry when it comes to investing in R&D. I expect the company to be among the leaders in medicinal cannabis.The launch of high margin products next month needs to be closely monitored in terms of market response. It can be a potential game changer for Canopy Growth stock.Overall, CGC stock is worth accumulating at current levels. While I don't advise a big plunge in the stock or the cannabis industry, gradual accumulation makes sense.As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post Halved from One-Year Highs, Canopy Growth Stock Is Attractive Below $30 appeared first on InvestorPlace.