|Bid||36.42 x 0|
|Ask||36.42 x 0|
|Day's Range||35.16 - 36.48|
|52 Week Range||30.30 - 76.68|
|Beta (3Y Monthly)||5.40|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 12, 2019 - Nov 18, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||55.64|
On Sep. 11, earnings results from Alberta-based Aurora Cannabis (NYSE:ACB) stock took the center stage in the cannabis space. To the surprise of analysts, ACB stock posted disappointing earnings. Earlier in August, ACB stock has already decreased the forecast. So when Aurora Cannabis stock missed the diminished expectations, investors were not forgiving.For cannabis investors, ACB stock needs little introduction. At present, Aurora Cannabis is Canada's largest producer of cannabis, which gives the company certain economies of scale. Especially in its early days, Aurora Cannabis stock was a can't-miss for investors. Yet since March, it has come off a long way from peak performance.The ACB stock price is now hovering around $5.90, close to January's lows in the $5 range. Understandably, investors are wondering what may be next for ACB stock given the recent decline in the price. Let's look at the company's fundamentals, industry developments, as well as the stock price.InvestorPlace - Stock Market News, Stock Advice & Trading Tips ACB Stock's Q4 Results Failed to ImpressWhen it released Q4 results for the fiscal year ended June 30, Aurora Cannabis stock missed revenue expectations. ACB stock's net loss came at C$2.26 million on net revenue of C$98.94 million, with an adjusted EBITDA loss of C$11.7 million (or $8.9 million).Analysts had estimated revenue of C$108 million. In Q4 last year, Aurora stock had reported net income of C$79.9 million, on net revenue of C$19.1 million.Like many other cannabis producers -- such as Canopy Growth (NYSE:CGC) or Tilray (NASDAQ:TLRY) -- ACB has so far not able to convert the revenue growth into real profits.ACB stock's disappointing earnings follow several other poor results from large Canadian cannabis companies. And not everyone is convinced that Canadian recreational pot sales will remain strong.Most pot stocks are burning through loads of cash and losing money like there's no tomorrow. Cash flows are far from predictable. Investors are concerned that the initial hype surrounding the industry could be decreasing further.It is likely that the rich valuations in this commodity-based consumer market may take a further hit in the coming months. The recent price weakness in most pot stocks including ACB has improved relative valuations, but these stocks aren't cheap. Headwinds That May Affect Aurora Cannabis StockIt is important to remember that weed is an agricultural commodity. In late 2018, during the early weeks following legalization, Canadians spent about $40 million on legal weed. However, since then sales haven't really held up. Instead the figures have come in much less robust than initially anticipated.In other words, there are possibly too many players in Canada, a relatively small market. Annual Canadian sales are not likely to exceed $4 billion. In the legal retail market there is an oversupply. And as the largest producer, Aurora Cannabis is likely to have a major supply in its inventory.On the other hand, the black market is still thriving in Canada. Thus, how can a producer like Aurora Cannabis maintain high margins in an industry that does not have meaningful growth potential?No one knows when (or if) federal legalization will happen in the U.S. And other international sales outside these two countries are not big enough to act as a substantial catalyst for the share price of ACB as well as other pot stocks.Could consolidation be a way forward for most of these cannabis producers like Aurora stock? Could Canadian Legalization 2.0 Help ACB Stock?In Canada, pot edibles and beverages will become legal on Oct. 17, one year from the original legalization of cannabis in the country. Industry watchers are referring to this new era in Canadian pot markets as "Legalization 2.0."New products are not expected to hit shelves till Dec. 16 as license holders will have to give Health Canada 60 days notice if they intend to sell them. Upcoming Canadian regulations will strictly limit what types of consumables can be produced and marketed. For example, manufacturers cannot legally combine pot and alcohol in products.In some ways, this significant legal development feels like deja-vu. Many industry watchers regard the legalization of edibles and beverages as another another significant milestone for pot companies. So what does that mean for ACB stock?Around this time last year, Canadian cannabis stocks had started rallying in anticipation of the nationwide adult-use legalization. For example in mid-August, 2018, Aurora Cannabis stock touched a low of $4.05. By mid-October, ACB stock saw a high of $12.53.Therefore, the hype surrounding the launch of pot edibles and drinks in Canada is likely to give a bit of fizz to ACB stock in the coming weeks, too. However I don't expect as big of a jump this September.In other words, it might become a classic case of "buy the rumor; sell the news." The Bottom Line on ACB StockIn the coming weeks, I expect ACB stock to trade between $5 and $7. From a valuation standpoint, the stock is not necessarily a bargain at $5. However, I expect the second stage of legalization in Canada to give a boost to most pot stocks.For Aurora stock, $7 level would be likely to act as strong resistance. Only after the stock is able to push through and stay above $7 can Aurora shareholders begin to relax for the longer-term prospects.The cannabis industry remains speculative at best. Yet there may still be an opportunity for those with a high risk tolerance. Given the new steps in legalization in Canada, this quarter might be an opportune time to start a position ACB stock.As of this writing, Tezcan Gecgil 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 Aurora Cannabis Stock Share Price Might Still Move Up appeared first on InvestorPlace.
Among investment sectors, few have incurred the kind of volatility as legal marijuana. Major Canadian cannabis players like Tilray (NASDAQ:TLRY), Canopy Growth (NYSE:CGC) and Cronos (NASDAQ:CRON) forwarded disappointing earnings reports. Thus, with Aurora Cannabis (NYSE:ACB) set to launch its fiscal fourth-quarter results, many had hopeful eyes on Aurora Cannabis stock.Source: Shutterstock Unfortunately, those expectations were badly misplaced. Aurora disclosed its Q4 numbers after Wednesday's close, and Wall Street did not react kindly. On the top line, the medical-cannabis specialist rang up $98.9 million CAD, which represented a 52% lift from the prior quarter. However, Aurora management forecasted Q4 sales to come in between $100 million CAD to $107 million CAD. As a result of the revenue miss, the ACB stock price tanked in after-hours trading.After a night's rest to digest the news, the Street immediately hit the "sell" button. Due to the mini-panic, Aurora Cannabis stock closed Sept. 12 below the $6 level. From a technical perspective, this was an unfortunate development. ACB stock was finally looking interesting since the beginning of this month. Now, questions have sprouted about this once-vaunted cannabis player.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAnother factor that has raised concerns among investors is Aurora's international business. One of the biggest investment arguments for Aurora Cannabis stock is its international footprint, the biggest in the sector. However, most of the company's financial performance comes from its local Canadian market. * 10 Battered Tech Stocks to Buy Now But in Europe, for example, the company generated $4.5 million CAD in medical-cannabis sales. That's up 12%, a very modest rate compared to its Canadian growth rate. With management continuing to make high-dollar investments, can ACB stock survive? Aurora Cannabis Stock Tanked for Understandable ReasonsHeading into the Q4 earnings report, the ACB stock price had robust technical momentum. At the same time, on a fundamental basis, the organization was going up against a wall of pressure.Primarily, every other major cannabis player had failed to impress the Street. Unlike in late 2017, Aurora Cannabis stock and its ilk did not benefit from the honeymoon effect. Cannabis investments no longer moved on compelling narratives, such as Canada legalizing recreational weed. Instead, prospective buyers were placing extra attention on the "boring" stuff, like fiscal sustainability.That created a major problem. Let me be blunt: There are two reasons why mainstream financial institutions take a pass on cannabis-related businesses. First, legal uncertainties -- and political controversies -- surround the sector. Second, the financials for most of these names are rough.And that's been the story for Aurora Cannabis stock and its peers throughout this year. Undoubtedly, Aurora and the rest of the marijuana market offer tremendous potential in their narratives. For example, if the U.S. legalizes marijuana, it changes the calculus for ACB stock.But before the narrative comes the reality. While Aurora's revenue growth has been impressive on a mathematical scale, so has its debt load. Sure, companies like Aurora have healthy cash balances, in part due to strategic partnerships. Yet the concern is this: Aurora cannot keep spending without turning at least some of its narrative potential into hard results.Ultimately, I think that's why the Street was so disappointed. 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.If you looked at the Q4 results, you really didn't get that impression from Aurora Cannabis stock. Should You Dump ACB Stock?Part of being a good investor is knowing when to give up. Unlike sports, there's no such thing as a moral victory in the markets. Either you're making money or you're not.Under this framework, Aurora Cannabis stock looks like a candidate to sell. And I don't blame you if you decide to go that route.That said, here's the plain truth about ACB stock: No matter what anybody says about the financials, the play here has always been the narrative. When companies in established industries show the kind of quarterly results that Aurora does, you should jettison immediately -- we know approximately the upper boundaries of traditional industries.But we really don't know anything about marijuana. Maybe the segment peaked in Ottawa, and everybody else doesn't know it yet. Or, the U.S. and other regions will start opening the legalization door.Clearly, Aurora Cannabis is banking aggressively on this latter possibility. Whether you believe in the same will determine how you approach ACB stock.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Hereas Why Aurora Cannabis Stock Stumbled appeared first on InvestorPlace.
London Stock Exchanges Rebuffs Hong Kong Hong Kong is in the news again, but this time not for rioting. The London Stock Exchange (OTCMKTS:LNSTY), which trades over the counter in the US, has rejected the preliminary $37 billion takeover bid from Hong Kong Exchanges and Clearing (OTCMKTS:HKXCY), and has also said that it has no interest […]The post Market Morning: LSE Rebuffs Hong Kong, China US Ceasefire, Secret Cannabis Formula, ECB Printing Resumes appeared first on Market Exclusive.
If you've followed my work over the past year, you know that I'm a strong supporter of marijuana stocks. While the viability of individual names varies, overall, the lack of a defined upside excites me. In other words, the cannabis market could be the most transformative of our generation. Or it could crash and burn. For CannTrust Holdings (NYSE:CTST) and CannTrust stock, I'm referring to the latter.Source: Shutterstock In short, CTST stock could be the first of the major New York Stock Exchange-traded cannabis companies to implode. Granted, I'm not breaking new ground here. Since the beginning of July of this year, shares have cratered over 68%. It's a good thing that Stockcharts.com defaults to a logarithmic scale for their charts; otherwise, it'd be hard to fit that magnitude of a drop in nominal unit-based scale.Initially, the troubles for CannTrust stock began when Health Canada, the namesake country's federal health agency, discovered a shocking scandal: CannTrust was illegally growing cannabis. But it wasn't just the infraction against clearly defined rules and protocol that hemorrhaged CTST stock. Instead, it was the violation's deliberate nature.InvestorPlace - Stock Market News, Stock Advice & Trading TipsCannTrust employees, with the knowledge of executive leadership, created illegal grow rooms hidden behind false walls. Clearly, management premeditated their actions. Thus, it was no surprise that the company fired former CEO Peter Aceto with cause. * 10 Battered Tech Stocks to Buy Now If that wasn't bad enough for CannTrust stock, we have another scandal: black market cannabis seeds allegedly got mixed into CannTrust's inventory.While it's not as dramatic of a headline as the hidden grow rooms, this latest controversy could spell big trouble for CTST stock. Thus, I wouldn't even gamble on the name. CannTrust Stock Has Zero CredibilitySince its inception, virtually all marijuana companies sought one attribute: credibility.During the early stages of the green market, companies attempted to convince investors, potential partners and financial institutions that their underlying business was realistically viable. Right now, these same firms are attempting to show that they can convert some of these storylines into actual results.However, it's been a trying time. Established leaders, such as Cronos Group (NASDAQ:CRON), Canopy Growth (NYSE:CGC), Tilray (NASDAQ:TLRY) and most recently Aurora Cannabis (NYSE:ACB) have attempted to do this conversion through their earnings results. So far, they've failed spectacularly.But with CTST stock, you have the worst of both worlds. Obviously, if CannTrust knowingly created illegal grow rooms, investors can't trust their financials. And if the story about black-market seeds is true, the company can't even manage its own products. Thus, CTST has neither financial nor fundamental credibility.And that really means only one thing: CannTrust stock is a goner.Believe me: although the black-market seeds sound like a granular and perhaps inconsequential violation, it's actually an earth-shattering one.That's because we have a vaping crisis on our hands. Recently, President Donald Trump declared his intentions to ban all flavored e-liquids used in vaporizers. Citing an epidemic in underage vaping, Trump didn't appear open to negotiations.Now, if you dig into this story deeper, you'll recognize that the Food and Drug Administration is leaning toward illegally acquired THC-laden cannabis as a prime suspect for the surge in lung illnesses.I mention this because of the power of public perception. Tacitly, the FDA appears to suggest that proper, retail vaping products are fine to use. But with CannTrust's latest scandal, it proves that you can't even trust established, legitimate organizations.It's truly an ugly situation for CannTrust stock. Wall Street Has Lost Patience with CTST StockAlthough the vaping crisis has taken center stage, my opinion is this: the controversy will boil over eventually, leading to some reasonable concessions on both sides. For instance, many e-liquid companies need to take responsibility and stop using marketing that allures children.Anti-smoking advocates succeeded in eliminating Joe Camel, the Camel cigarette's once-popular brand face. Understandably, the cartoonish character attracted children, which of course is a big no-no. Anti-vaping advocates can do the same for donut-flavored e-liquids, for instance.But when it comes to CannTrust, I think the bad taste they created is simply too much. Seemingly everything about this company is a lie. Worse yet, their actions impugn the (hopefully) reputable behaviors of their peers. Since marijuana stocks tend to rise and fall in sympathy with each other, CannTrust stock will victimize many names.When the markets settle down, they'll give a second chance to the established leaders in this space. But for CTST stock, I think Wall Street has lost its patience. One massive scandal is already enough. But having two in a highly controversial market? Why bother with CannTrust when literally every other cannabis-based opportunity is better?As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Hereas Why You Canat Trust CannTrust Stock appeared first on InvestorPlace.
Legalizing medical marijuana has been a challenge in Florida. Looking at the initiatives, recreational legalization might see daylight in Florida by 2020.
The two largest pot companies in the world have developed secret formulas that predicts U.S. federal and state cannabis legalization.
Just a few giants still dominate the emerging cannabis industry, so it's always news when one reports earnings. Number two by market cap is Aurora Cannabis (NYSE:ACB) stock, which dropped roughly 9.5% today on last night's quarterly results. But there's a lot more to this story behind the headlines - and a major upside catalyst on the horizon. So let's take a look.The sell-off tells me that investors reacted to analyst expectations and not reality. Wall Street had been looking for roughly 103 million Canadian dollars in revenues, and Aurora turned in C$98.9 million.Now, first of all, only a handful of analysts follow ACB stock at this point, so it's hard to extrapolate anything meaningful from that. Today had nearly 25 million shares changing hands based on, like, five guys' opinions.InvestorPlace - Stock Market News, Stock Advice & Trading TipsSecondly, keep in mind that Aurora's revenues are growing faster than you'll see with almost any other industry.Specifically, in this latest quarter (fiscal Q4 2019), Aurora's C$98.9 million was a 52% increase from fiscal Q3 2019 revenues of C$65.1 million. When you look at the year-ago quarter, that's a 72% increase (from C$55.2 million). And when you look at the same quarter two years ago, that's a 447% increase (from C$18.1 million).And then you've got to look at future projections. In the chart below you see that the trend is still strong. For 2020, we're looking at potentially $521 million in annual revenues - more than double where we are now. And by 2022, Aurora Cannabis is projected to be a $1.7 billion company by revenue. That's just three years from now. (And that's U.S. dollars, not Canadian.)Source: YCharts So for Aurora to miss by C$4 million … that's a drop in the bucket. Especially when you look at the bigger trend.Now, I mention this not to prove my commitment to ACB stock or really any particular cannabis company. I mention it to illustrate that the sellers today are falling into a trap that we at Investment Opportunities avoid:…namely, getting caught up in short-term thinking for what should be a long-term play.And the sellers are about to miss out on what could be a major bullish event. Get Ready for "Legalization 2.0"Now is a particularly bad time to be selling Canadian pot stocks. Because "Legalization 2.0" is about to hit.Next month, on October 17, companies can apply for a license from Health Canada to sell cannabis edibles, beverages, and vaping products, as well as extracts and topicals. Then, 60 days later - in December - these products will actually hit the store shelves.A year into full legalization, Canada has over 200 licensed growers and sellers of the marijuana flower - for a country of less than 40 million people. If the cannabis giants want to stay dominant, there's a big opportunity among edibles and vapes in particular. These products have higher profit margins than the flower - as high as 92%. What's more, they open the doors to a deeper pool of customers… including folks more likely to use cannabis if they can do so more discreetly, without the smoke.And this is clearly on executives' minds. Aurora Cannabis already warned in May that it would be building up inventory, preparing to release edibles, vapes, and concentrates - and that, in fact, this buildup may hold back revenues a bit for this latest quarter.Aurora's strategy here is telling. The company has made it pretty clear that this specific product line-up takes the "U.S. consumer" into account. And when you look at the numbers, it's obvious why. Canada is Just The BeginningThe California marijuana market alone is bigger than all of Canada… and it's growing. If and when U.S. legalization occurs, the United States will immediately become the largest market in the world. In fact, it will be bigger than the rest of the world combined.I expect federal legalization very soon - and again, you need to be invested well BEFORE a big catalyst hits.And aside from legalization nationwide, U.S. stocks are already the best buying opportunity in marijuana.At Investment Opportunities, we were able to ride Canadian stocks like Canopy Growth (NYSE:CGC) much of the way higher, which I'm quite proud of. But a lot of attractive U.S. stocks are both undervalued and still in "penny stock" territory.Penny stocks often get a bad rap. But they are actually critical to the global marketplace. The world NEEDS tiny companies -- just as much as bigger ones. They're the job creators. The innovators.You just want to be VERY choosy about which ones you buy.I use strict guidelines to pick penny stocks -- and I tell you all about them in this free presentation.You'll see my five-step evaluation process for early investments, including in the marijuana market. Then you'll see how to get a free copy of America's Top 4 Marijuana Moonshot Stocks… I'll even give you a fifth bonus name just for fun. Click here to watch now.Matthew McCall left Wall Street to actually help investors -- by getting them 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) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Aurora Cannabis (ACB) Stock: The Real Story With This Earnings Report appeared first on InvestorPlace.
Former co-CEO Bruce Linton’s termination was ‘abrupt change’ resulting from ‘personalities not seeing eye to eye,’ Zekulin says
[Editor's note: This story will be updated each week with new stocks and analysis. Please check back often for Mark's latest take on marijuana stocks.]In financial markets certain levels are more important than others with respect to the amount of supply and demand that exists within them. In addition, financial market prices are always doing one of three things. They are either going up, going down or staying the same. When applied correctly, technical analysis of marijuana stocks should help you identify the important levels and trends in this sector.Understanding these dynamics will help you make money. For instance, suppose you want to buy a stock if it drops to the $10 level. Your plan may not work if you don't understand the current market dynamics. There may be significant support at the $11 level. The stock may fall but not get to $10. It may find support around $11 and then rally. Because you didn't know where the support was, you lost out on a chance to make money for one dollar.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThere was important news for the industry that no one seems to be talking about. The Office of the Attorney General said that it will begin processing applications to research cannabis. As of right now, the University of Mississippi is the only institution in the United States that is currently allowed to do so. The DEA said that it wants to improve access to marijuana research. This is a major step down the path toward legalization on a Federal Level. * 10 Battered Tech Stocks to Buy Now This news could be the reason why many of the stocks in this industry have broken their recent downtrends and have been consolidating. Aurora Cannabis Inc (ACB)Aurora Cannabis Inc (NYSE:ACB) is a Canadian-based company that grows and sells medical marijuana, indoor cultivation systems and hemp-related food products.ACB broke its downtrend after finding support around the $5.50 level. If this level breaks and it goes lower, look for support around the $5 level. This is where the lows were in December and January.If the stock trades higher, there is a good chance that it will hit resistance around the $7 level. This level was resistance in August. It was also support in June and July.Why would a prior level that was support become a resistance level? One of the reasons is because the people who bought it at $7 when it was support are now looking at losses. They tell themselves that if the stock trades back up to the $7 level, they will sell it to get out at breakeven. This supply of stock at the level creates resistance. Cronos Group Inc (CRON)Cronos Group Inc (NASDAQ:CRON) grows and sells marijuana.CRON stock has broken its recent downtrend and has been consolidating above support around the $10.75 level. If it rallies there will probably be resistance around the $14 level. It was a support level from May through late July.It seems to me like CRON stock will continue to consolidate in the short-term. It is in the middle of a range and the momentum is neutral.An interesting but largely ignored dynamic with this stock is that by consummating its deal with Altria (NYSE:MO) CRON effectively became a sin stock. These are stocks of companies that engage in what some would consider unethical behavior. Altria, AKA Phillip Morris, certainly fits the description. * The 7 Stocks Hedge Funds Are Buying Big Because of this certain institutional money managers that have ESG concerns will not be able to invest in the stock. This could put it at a disadvantage to its competitors. Canopy Growth Company (CGC)Canopy Growth (NYSE:CGC) grows and sells marijuana.CGC stock broke its recent downtrend and has been consolidating around the $27 level.If it heads lower, there is a good chance that it will find support around $23. This is where it recently found a low before rallying. The people who wanted to buy at $23 and didn't tell themselves that if it drops back to $23, they will buy it.Those who shorted it at $23 are now looking at a loss. They tell themselves that if the stock drops back and they can get out of it at breakeven, they will cover at $23. Added to this are professional traders that want to profit off of a clearly defined level and you can understand why a prior support level could be support again.If CGC heads higher there is a good chance that it will run into resistance around the $32 level. This level was support in the first half of August. KushCo Holdings, Inc. (KSHB)KushCo Holdings, Inc. (OTCMKTS:KSHB) sells packaging supplies.KSHB stock has broken its recent downtrend and has been consolidating around the $3.75 level.Consolidating or trading sideways are terms that refer to markets that are in equilibrium. In other words, the forces of supply are equal with the forces of demand.When stocks are in a downtrend, the forces of supply are stronger than the forces of demand. When markets are trending higher the forces of demand are overpowering the forces of supply. * The 10 Best Index Funds to Buy and Hold When trendlines are properly understood and drawn correctly, a trendline break could mean that the control of the market is about to change. In the situation here when the red downtrend line broke, it was an early indication that the selloff was about to come to an end. The stock has been trading sideways since then. HEXO Corp (HEXO)HEXO Corp (NYSE:HEXO) grows and sells medical marijuana.HEXO recently found support around the $3.80 level. This level will probably be support again if it heads lower. The stock may have formed a reversal pattern, which would mean that it is about to head lower.The stock rallied everyday from Aug. 30 through Sept. 6. Each day, the closing price was higher than the opening price. These days are blue on the chart. The days when the closing price was lower than the opening price are red.Then on Sept. 9 something happened which could mean that the forces of supply are about to take leadership over from the forces of demand.You can see that the stock opened at what was the high price of the day. Then it sold off over the course of the day and closed at its lows (this is represented by the big red line). This pattern could mean that the sellers are about to take control of the market. Innovative Industrial Properties (IIPR)Innovative Industrial Properties (NYSE:IIPR) manages industrial properties and leases them to licensed medical marijuana growers.IIPR is consolidating below the important $90 level. This level is important because it was a resistance level from last March through June. Then, when the market saw some dramatic selling two weeks ago, it is where the stock found a floor. Since then, it slowly traded through the level and has been consolidating below it.Why would a level that was prior resistance become support? Those who bought it there and those who wanted to buy it but didn't each told themselves they will acquire shares if it drops back to the level. * 7 Strong-Buy Stocks Hedge Funds Are Buying Now Those who are short were feeling pretty good when it went lower. But after the stock rallied and broke $90 to the upside they are losing money. They say to themselves that they will buy it back at $90 if they can, so they can close out of their position without losing money. This demand for the stock at the $90 level is what creates support. Medicine Man Technologies, Inc. (MDCL)Medicine Man Technologies, Inc. (OTCMKTS:MDCL) provides cultivation consulting services to cannabis growers.MDCL stock is overbought and it is approaching a level that has been resistance before. We will probably see some profit taking or consolidation.The levels around $3.90 were the top in April, and then again in May and June. In addition, MDCL stock is the most overbought that it has been since April.Overbought refers to the momentum. Momentum is where the price is today versus where it was X many days ago. When this number reaches an extreme to the upside, it is considered to be overbought.This is an important dynamic to understand about markets. When they are oversold and get to support, they tend to rebound. When markets are overbought and get to resistance, they tend to selloff.As of this writing, Mark Putrino did hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post 7 Marijuana Stocks With Critical Levels to Watch appeared first on InvestorPlace.
Aurora Cannabis (NYSE:ACB) stock dropped in after-hours trading on a weak earnings report. Shares fell from $6.49 at the close Sept. 11 to below the $6 level. With results failing to meet consensus, investor sentiment for ACB stock could become more negative. But is this recent stumble an opportunity to load up on Aurora Cannabis stock?Source: Jarretera / Shutterstock.com Shares continue to trade at a high valuation. But the long-term strategy for Aurora may still be in motion. Let's take a closer look and see if there's short-term upside for the ACB stock price. ACB Stock Earnings Fall Shy of ConsensusOn Sept. 11, Aurora released earnings for their fourth quarter which ended June 30. Net cannabis revenue grew 61% from the prior year's quarter, to $94.6 million CAD. The company's cash cost to produce per gram fell 20% to $1.14 CAD per gram. Gross margins grew to 58% from 55% in the prior year's quarter. Thanks to increased margins, the company's adjusted EBITDA losses shrunk from $36.6 million CAD in Q3 2019 to a $11.7 million CAD loss in Q4 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor fiscal year 2019, sales were $247.9 million CAD. This is an 349% increase from the prior fiscal year. But despite this growth, Aurora fell short of consensus. Earlier in 2019, ACB anticipated positive adjusted EBITDA by the end of FY19. But the company revised this guidance in August. After yesterday's earnings, the company is no longer referencing "positive adjusted EBITDA." Instead, Aurora "expects adjusted EBITDA to improve." * 10 Battered Tech Stocks to Buy Now The analyst community also pared down their estimates after the August walk-back. According to FactSet (NYSE:FDS), prior to August, analysts estimated Q4 revenue of roughly $112 million CAD. This was cut to a range of $100 million CAD-$107 million CAD. With actual Q4 performance falling short of this revised consensus, there are new challenges to the growth story with ACB stock.Other cannabis stocks have posted weak results in the past few months. Weak numbers at Canopy Growth (NYSE:CGC) pushed shares down 25% since mid-August. Tilray (NASDAQ:TLRY) shares have fallen from $41.16 per share to near $30 per share since its August earnings release. Reality is bringing pot stock valuations back to earth. Does this mean it's time to buy on the dip? Let's take a look at the valuation of ACB stock relative to peers. Aurora Cannabis Stock Trades at a Premium to PeersACB stock trades at a premium to most of its peers. Aurora Cannabis stock trades at an enterprise value/sales ratio of 53. Compare this to Canopy Growth, which trades at an EV/Sales ratio of 40.5. Tilray trades at an EV/Sales of 36.2. Aphria (NYSE:APHA) trades at a low EV/Sales ratio of 9.7. The only major pot stock trading at a higher valuation is Cronos (NASDAQ:CRON). Cronos trades at a staggering EV/Sales ratio of 106.4.But does this make ACB stock overvalued? The cannabis sector in general continues to be richly priced. Despite stumbles, investors anticipate a bright future for the marijuana industry. But with top-line performance falling short of expectations, can investors expect a short-term rebound? The Canadian marijuana market continues to be over saturated. A fully open U.S. market continues to be out of reach. Congress has made little progress on federal marijuana legislation.A saving grace for Aurora Cannabis stock is the company's global diversification. As I have mentioned previously, Aurora's focus on European markets has been a strength. Aurora has also focused more on the stable medical segment. But other risks counter the bullish case. The company's heavy use of convertible debt could cause problems down the road. Additional issuance of shares could drive the ACB stock price down further. Stay on the Sidelines With AuroraIt's tough to stomach the current ACB stock price. While the company has many strengths, the path to profitability remains unclear. There needs to be a shakeout in the Canadian cannabis market before it can become profitable. Solid movement on the U.S. federal legalization front needs to happen. One of the major marijuana stocks needs to hit profitability. Even if said "profitability" is adjusted positive EBITDA.I believe marijuana stocks will fall further. Aurora Cannabis stock is no exception. The company's shares could rebound on a crumb of good news. But in the short term, all bets are off with regards to the ACB stock price. To play it safe, stay on the sidelines with Aurora. Wait for a more opportune moment. If valuations turn irrationally low, make your move. But otherwise do not enter a position.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 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post Weak Earnings Might Cause Aurora Cannabis Stock to Keep Falling appeared first on InvestorPlace.
Canopy Growth (NYSE:CGC) has bounced back by 16.3% so far in September after a brutal sell-off over the past few months. I recommended Canopy Growth stock back on Au. 30. I felt the stock had been oversold given how little its fundamental picture has changed.Source: Shutterstock A brand new report on Canadian cannabis market share seems to confirm the idea that Canopy is dominating the nascent Canadian market. Experienced investors know a first-mover advantage is extremely valuable in the long-term.One of the biggest reasons why CGC stock has dropped in the past few months is because its losses have been heavier than expected. However, the early market share numbers suggest Canopy's strategy of aggressively investing in ramping up its business is already paying off.InvestorPlace - Stock Market News, Stock Advice & Trading Tips The NumbersBank of America found Canopy has a 25% market share of all cannabis listings in Canada. The study included 1,980 listings, 101 brands and 39 different cannabis producers. * 10 Stocks to Sell in Market-Cursed September Canopy Growth Corp has the largest share of the Canadian market by a long shot. Analyst Christopher Carey says Canopy's market share is roughly double the 13% market share of its closest competitors, Aurora Cannabis (NYSE:ACB) and Organigram (NASDAQ:OGI).Carey says establishing that first-mover advantage is critical."Establishing distribution - early and big - can be significant in creating long-term market share moats for a business competing in new consumer categories prone to fragmentation," he said.Unfortunately, the market share study wasn't all good news for Canopy Growth stock. The 25% "share of listings" represents product already on shelves throughout Canada. Bank of America also looked at "sell-in," or total retail purchases of cannabis. Sell-in represents the future share of listings. In that statistic, Canopy has dropped to second place with 22%, trailing Aurora at 27%. The Future of CannabisCarey says investors shouldn't get too worried about Canopy losing sell-in share. In the June quarter, Canopy's harvest jumped 183% quarter-over-quarter, much of which was hot-selling THC flower.Carey is expecting this spike in harvest will translate to a 33% quarterly increase in Canopy sell-in in the fiscal second quarter of 2020. That big push could push Canopy back ahead of Aurora in sell-in share.Obviously having that top market share spot is ideal, but as long as Canopy remains at or near the top, investors should be rewarded in time. Certainly, investors want Canopy Growth to be the Coca-Cola (NYSE: KO) of cannabis, but it will be just fine if Canopy Growth stock ends up the PepsiCo (NASDAQ: PEP) of Canadian cannabis.In fact, PEP stock has generated a total return of more than 2,630% over the past 30 years. KO stock has a total return of 2,570% in that time. How to Play Canopy Growth StockThe latest Canadian market share numbers were certainly good enough to keep Carey in the bull camp when it comes to CGC stock."Canopy remains a company, if a still imperfect story, with a chance at becoming a leading global player in cannabis, especially given its industry leading [balance] sheet and partnership," he said.Bank of America has a "buy" rating and $27.66 price target for Canopy Growth stock.If you are a cannabis investor that believes the industry is just getting started, I think you can't go wrong owning Canopy Growth stock. My only recommendation would be to hedge your bets by owning ACB stock and at least two or three other cannabis stocks as well.As much as you love Canopy Growth stock and think Canopy will end up as the Coke or Pepsi of cannabis, it is still extremely early in the cannabis game. Especially in the event of U.S. legalization, there will be plenty of demand to support multiple market winners.It's likely most of the smaller names can't beat out Canopy Growth Corp and Aurora directly. But they might make appealing buyout targets down the line.I would recommend all cannabis investors buy Canopy Growth stock, ACB stock and at least two more of their favorite cannabis plays for a more diversified approach to the market.As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Canopy Growth Stock Needs to Be One of Your Main Cannabis Plays appeared first on InvestorPlace.
Canadian pot producer Aurora Cannabis reported fiscal fourth-quarter sales after the close Wednesday that missed the company's own estimates, sending shares into retreat.
It goes without saying that Canopy Growth (NYSE:CGC) has endured a rough summer. Market leadership could not compensate for falling multiples, earnings and revenue misses, and a CEO firing. Canopy Growth has bounced back from near-term lows. Still, it remains too early to tell whether that bounce represents a pause in the decline or a genuine turnaround. Until investors can get a clear direction on CGC stock, I recommend staying away for now.Source: Jarretera / Shutterstock.com Investors Should Prepare for a FallCanopy Growth, and the marijuana industry overall, wants to put this summer behind them. Since the end of April, CGC stock has lost nearly half of its value. Differences with investor Constellation Brands (NYSE:STZ) cost CEO Bruce Linton his job. Moreover, a massive revenue and earnings miss for the second quarter only added to the pain.Unfortunately, the fall could bring a further fall. The price of dried cannabis has failed to gain traction as inventories rise. Further, the cash position of CGC continues to fall as it fell by 36% over the previous two quarters.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Healthcare Stocks to Buy Despite the Headlines Furthermore, despite the decline, CGC remains expensive. It currently trades at about 37.2 times sales. In the recent past, such a multiple did not phase investors. However, we have dealt with a market where peers such as Aurora Cannabis (NYSE:ACB), Tilray (NASDAQ:TLRY), and Cronos Group (NASDAQ:CRON) have also seen their stocks drop.Moreover, the profit picture looks increasingly bleak. For the next fiscal year, analysts had predicted a profit of 31 Canadian cents (24 cents) per share 90 days ago. Now, that estimate has become a loss of 75 Canadian cents per share. That will place further pressure on its cash and could lead to more debt or more stock issuance in a climate of falling prices. Don't Bet on Quick LegalizationSo what would revive Canopy Growth stock? InvestorPlace contributor Will Ashworth argued that Trump legalizing weed across the country would boost both his re-election chances and CGC.I happen to agree in principle. I also like that CGC positioned itself to jump into the U.S. with the Acreage Holdings (OTCMKTS:ACRGF) purchase once weed becomes legalized. However, we have to operate in the environment we have, not the one we want. Hence, I do not recommend investing based on that piece unless the political winds change direction. While sudden legalization, especially in the U.S., would help Canopy Growth, investors should instead assume legal status comes to the developed world at a slower pace. How Should I Trade CGC?In my view, investors should exit their positions in CGC for now. In the near term, the industry probably faces multiple compression. Investors should not expect the market to grant Canopy Growth stock any type of immunity. Even though fall will arrive soon, investors need to prepare for winter and probably a more permanent climate of lower valuations.Still, once the market stops selling off CGC, I see the equity as a lucrative long-term investment. First, I believe this industry downturn will ultimately benefit CGC stock. Countries across the world continue to march toward legalization.Canada's strict regulatory structure on the marijuana industry has generally not done its companies any favors. However, they helped hugely by seeing the trend toward legalization early and moving first to embrace it. Now, Canopy Growth can use its dominant position in Canada to achieve early mover status in places such as Europe. This process will only speed up should the U.S. move toward legal status more quickly than anticipated.Moreover, the downturn will lead to an industry shakeout. In this downturn, the more financially-troubled firms will have to sell out to larger firms such as Canopy Growth, in many cases on the cheap. Others will simply close their doors. Either way, over the next few years, CGC will face much fewer competitors at home. * 10 Stocks to Sell in Market-Cursed September Canopy Growth stock has become dead money in the near term. However, once it endures a harsh winter, I think it will spring forward to massive long-term gains.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 * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Time to Write Off Canopy Growth Stock in the Short Term appeared first on InvestorPlace.
Cronos Group (NASDAQ:CRON) stock remains overvalued. Despite cannabis sector's summer selloff, CRON stock still trades at a premium to peers. But with recent acquisitions, the company's future prospect may start to meet expectations. Last month's acquisition of several U.S.-based CBD businesses could help bolster the company's growth strategy.Source: Shutterstock But what makes CRON stock a better pick than the rest? Peers such as Aurora Cannabis (NYSE:ACB) and Canopy Growth (NYSE:CGC) are not without their flaws. But both sell at more reasonable valuations.Is there opportunity with Altria Group (NYSE:MO) backed Cronos? Or should investors seek cannabis plays elsewhere? Let's take a closer look at Cronos Group stock.InvestorPlace - Stock Market News, Stock Advice & Trading Tips What's The Latest at CRON?In August, Cronos Group purchased 4 U.S.-based CBD businesses from Redwood Holding Group. The most notable asset purchased in this deal was the Lord Jones brand of CBD-infused skincare products. In the U.S., marijuana has yet to be legalized on the federal level. But CBD is fully legal. Gaining a toehold in the American market via CBD is just the first step. * Take Buffett's Advice: 5 Vanguard Funds to Buy But Capitol Hill is moving slow on legalization. Without access to banking services, "Big Pot" in the United States remains a pipe dream (for now). This didn't stop Altria Group from making a big bet on Cronos. Altria (parent of Phillip Morris USA and a major investor in vaping giant Juul) made a $1.8 billion investment. This gave the tobacco giant a big seat at the table.The relationship with Altria helps Cronos with their vaping product strategy. But the health effects of vaping have dominated the headlines. However, as InvestorPlace contributor Josh Enomoto wrote on September 10, the "vaping crisis" could cool down over time. But with these challenges, its tough to see a clear path to profitability. With the stock trading at such a high enterprise value/sales ratio, Cronos needs to hit it out of the park to "grow into its valuation". Cronos Remains Extremely OvervaluedCRON stock continues to trade at a premium. The company's enterprise value/sales (EV/Sales) ratio is a staggering 109.9. For comparison, Aurora Cannabis trades at an EV/sales ratio of 51.6. Canopy Growth shares change hands at a EV/sales ratio of 40.1. Tilray (NASDAQ:TLRY) has an EV/sales ratio of 32.9. Aphria (NYSE:APHA) sells at a relatively reasonable EV/sales ratio of 9.8.Is Crono's premium valuation all thanks to Altria? Having America's biggest tobacco company on your side is a plus. But it is no guarantee of U.S. market domination. The deal was highly dilutive for Cronos shareholders. Altria received a slug of warrants along with their investment. These warrants have a strike price of $19/share. This is well above Crono's current price of $11.73/share. But the high amount of warrants outstanding minimizes upside.But this deal gave Cronos plenty of capital. As of June 30, 2019, CRON had CAD $1.6 billion in cash, and CAD $745 million in short-term investments. Even after the recent asset purchases, the company has plenty of money to fuel growth. Additional capital raises are unlikely. The company is operating at a loss. But it is not hemorrhaging money as quickly as its peers. This means downside is limited. But with upside challenges, it is tough to see the value in CRON stock. Look Elsewhere For a Pot PlayI am still waiting for pot stocks to reach lower valuations. But you may be more keen on placing a bet on the cannabis sector. If you are looking for a pot play, look at any other stock but Cronos. The company continues to trade at a mind-boggling valuation. It has a logical strategic partner (a tobacco company). But it remains unclear how this will translate into a market edge.I have been bearish on both Aurora Cannabis and Canopy Growth. But at least both of these companies offer a clearer path to success. Among the other major marijuana stocks, companies like Aphria stand out for their reasonable valuation. * 10 Stocks to Sell in Market-Cursed September It may pay to take your time with marijuana stocks. Valuations could reach more reasonable valuations down the road. But if you are looking for a pot play today, look at anything else but Cronos Group stock.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 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Stay Far Away From CRON Stock Until Its Valuation Comes Down appeared first on InvestorPlace.
The summer of 2019 was a period of malaise for the cannabis sector, and unfortunately that meant a selloff in Hexo (NYSE:HEXO) stock, whether it deserved the downward price pressure or not. As I see it, adverse developments from well-known names like Canopy Growth (NYSE:CGC), and Aurora Cannabis (NYSE:ACB) induced a panic that spilled over into the rest of the cannabis sector.Source: Shutterstock Since many outlets predict Sept. 12 earnings, it might be a smart idea to wait and see which way the Hexo stock price goes before taking a position. It's also fine to start a position if you believe in the recovery of cannabis stocks.Hexo in particular has great potential as a turnaround story.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Hexo Is Growing by Leaps and BoundsI recall when Hexo reported its third-quarter 2019 earnings, and it's no exaggeration to say that the results were outstanding. For one thing, Hexo completed its acquisition of Newstrike Brands during that quarter and in doing so, increased its production space to an astonishing 1.8 million square feet and its estimated annual cannabis production capacity to 150,000 kilograms. * 10 Stocks to Sell in Market-Cursed September Sebastien St.-Louis, the CEO and co-founder of Hexo, also delighted shareholders with the projection that the company will earn $400 million in revenues during fiscal year 2020. He also forecasted that Hexo will double its net revenues in the fiscal Q4.I've heard analysts refer to 2019's market as "Cannabis 2.0" or "Legalization 2.0," and Hexo is a prime example of what they're referring to. The company is not only bigger and better than it was before. It's also proactively preparing for the future. Hexo's agreement with Molson Coors (NYSE:TAP) to sell cannabis-enhanced beverages is a perfect example of how the industry is moving forward. Analysts' Projections on HEXOAn upcoming earnings announcement means that analysts are coming out of the woodwork to share their opinions on HEXO stock. For the fourth quarter of 2019, analysts project that Hexo will announce revenues of $25.5 million CAD. They expect the company to sustain a loss of 5 cents per share for the Canadian version of Hexo stock.These are very modest expectations influenced by the dismal performance of the cannabis sector as a whole. I don't see any reason why the actual results won't exceed analyst expectations. And I wouldn't be surprised if the Hexo stock price retraces upwards. My Takeaway on Hexo StockDon't get me wrong. Hexo is a much smaller company than CGC, ACB and other famous brands in the legalized cannabis space. I do not recommend taking a large position in HEXO stock shares, even after the upcoming earnings announcement. There are future developments that could create volatility for the entire cannabis market.The event that immediately comes to mind is the day when Health Canada will allow an array of cannabis products (edibles, extracts, creams, etc.) to be consumed. That day is slated for Dec. 16, but I won't be shocked if the legalization date gets delayed for one reason or another.Therefore, I will advise that prospective HEXO buyers exercise due caution. Accumulate shares gradually, prepare for possible downside in the price, respect your stop-losses if you use them and always keep your position sizes reasonable.Despite my warnings, I remain bullish on the Hexo stock price as I see the company as proactive. It's expanding quickly and preparing for a new and exciting era in legalized cannabis.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post You Won't Find Better Value Than Hexo Stock in the Canna-business appeared first on InvestorPlace.
Cronos Group and Aphria are Jim Cramer's top picks in the cannabis sector. Aphria’s upbeat earnings results restored investors' faith in the sector.
Aurora Cannabis (NYSE:ACB) stock will report its earnings on Thursday before the opening bell. Investors will closely watch Aurora Cannabis stock for guidance amid its decline and that of its peers.Source: Shutterstock Yes, some of the stock decreases came when peers such as Canopy Growth (NYSE:CGC) and Tilray (NASDAQ:TLRY) issued their reports. Still, ACB stock faces its own test. Although Aurora should continue to lead the world in marijuana production, size alone will not make ACB a buy going into earnings. Q2 Expectations and ACB StockFor the second quarter, analysts expect a loss of five Canadian cents (3.8 cents) per share. The company reported losses of 15 Canadian cents per share in the same quarter last year. However, investors should note that Aurora has missed estimates in three of the previous four quarterly reports.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Stocks to Sell in Market-Cursed September They also predicted revenues of C$258.95 million ($196.71 million). If this holds, it will represent a 369.1% increase in revenues year-over-year. ACB brought in revenues of C$55.2 million in the second quarter of 2018.Despite the massive increase in revenue, the only likely source of profit for Aurora Cannabis will come from stock trading. The company recently sold its 10.5% stake in The Green Organic Dutchman Holdings (OTCMKTS:TGODF).This nets the company $86.5 million. As our own James Brumley states, the deal could buy C$86.5 million ($65.71 million) worth of time to generate profits. It could also help with debt relief as the company has to pay back C$230 million worth of debt on March 9, 2020. Outstanding Shares and Aurora Cannabis StockAnother key component that should garner investor interest involves the shares outstanding on Aurora Cannabis stock. In previous articles, I have remained bearish on ACB stock for the massive amount of dilution. About 129 million shares existed in 2016. Today that figure now exceeds one billion.In a sense, I do not blame the company for diluting the stock. The market's toleration for high multiples seems to have fallen. Despite an ACB stock price of around $6 per share, the equity still trades at about 43.7 times sales.While Aurora continues to lose money, it makes sense from a company perspective to issue more shares. However, with that level of dilution, it leaves investors with no good reason to pay nearly 44 times sales for the stock. Other dangers for Aurora Cannabis StockThis situation could also lead to something unthinkable for a world leader in marijuana production--a reverse stock split. The average price-to-sales (PS) ratio for the S&P 500 stands at 1.53. Even if ACB stock fell to a PS ratio of 4.37 under current revenue figures, that would take ACB to about 60 cents per share.A reverse split means little in a financial sense, and I believe revenue growth will reduce the PS ratio over time. Still, it would represent a huge psychological blow if it needed to make such a move to escape penny stock status.James Brumley makes another critical point. Companies such as sit on billions in goodwill from various acquisitions. Aurora itself paid C$3.2 billion ($2.43 billion) to purchase MedReLeaf. A forced write-down of this purchase and comparable takeovers by peers could hurt stocks across the industry. This could have also played a role in Aurora's sale of TGODF stock. Final thoughts on ACB stockUnder current conditions, the company earnings report will likely leave investors with little reason to own Aurora Cannabis stock. Aurora Cannabis remains a world leader in the production of marijuana. Even if the company falls short of earnings estimates again, I see little that should threaten this leadership change.However, investors need to separate Aurora Cannabis from Aurora Cannabis stock. Given the elevated multiple, Aurora has supported itself and funded acquisitions in large measure from massive stock dilution. Despite the proceeds from selling its stake in the Green Organic Dutchman, the company still needs cash to fund operations and pay debts. As long as this practice continues, I see little reason to own ACB stock.As I have stated before, profiting from Aurora Cannabis stock long term will only happen when the company transforms itself. When it becomes profitable and pays dividends like Altria (NYSE:MO), investors can more reliably earn positive returns from the Aurora story.Unfortunately, today's Aurora Cannabis could easily face write-downs and possible a reverse stock split. With continuing losses, stock dilution, and earnings misses, investors have little incentive to pay almost 44 times sales for such an equity, before or after the earnings release.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 * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Avoid Aurora Cannabis Stock, Both Before and After Earnings appeared first on InvestorPlace.
Aurora Cannabis (ACB) stock has been rising before its fourth-quarter earnings on Thursday. The stock has risen 12.4% this month.
Canopy Growth (NYSE:CGC) has been on a roller coaster so far in 2019. Like much of the rest of the market, Canopy Growth stock came into the year depressed and under pressure.Source: Jarretera / Shutterstock.com However, it didn't take long for shares to go from sub-$30 to $50+ though. That price action took place in the month of January, but bulls have lost that steam.Luckily for InvestorPlace readers, many have been bearish since $38.InvestorPlace - Stock Market News, Stock Advice & Trading TipsAfter plunging all the way down to $22.76, shares are on the rebound. The hard part is determining whether this is a dead cat bounce (i.e. a temporary reprieve before more downside ensues) or a true reversal off the lows. With the recent rally, shares are no longer down more than 50% from the highs, although Canopy Growth stock still sports big losses.Let's take a closer look at the stock to determine what the best course of action is. Trading CGC Stock Click to EnlargeLast week, CGC was a Top Stock Trade on InvestorPlace and I also flagged the name on Twitter. Even though shares are taking a breather, it's important to see that they're holding up above the 20-day moving average. * 10 Stocks to Sell in Market-Cursed September While it would be discouraging to see CGC lose this mark, As long as it stays above $26.25, it looks technically okay for bulls. However, the big question is whether shares can hurdle $30.At $30, CGC stock would approach a significant level on the chart, as well as downtrend resistance (blue line). Above here and Canopy Growth stock can start working on filling the gap up to $32. There's also the 50-day moving average up near $32, although it's declining on a daily basis as well.Over $32 and CGC bulls can start thinking about a return to the 61.8% retracement, which is currently north of $36. But let's not get too ahead of ourselves. We first need to see CGC hold up over $26.25 and push through $30. After that, we can start looking at further upside targets.Below $26.25 and the recent lows near $23 are back on the table. Balance SheetCGC still has a strong balance sheet, but with negative free cash flow and M&A, it's weakening over time.Cash and short-term investments of $2.42 billion are down more than 32% from the quarter ending in December 2018. Current assets are down ~$916 million (-23.7%) to $2.95 billion in the same period, although total assets are up 4.2%.That also comes with 31.3% spike in current liabilities to $284.6 million. Total liabilities have gone from $891 million six months ago to $2.1 billion, up roughly 135%.So while total assets still outweigh total liabilities by nearly three-to-one and there are no concerns about CGC meeting its short-term obligations, the balance sheet is weakening vs. six months ago. Sizing up Canopy Growth StockMany considered Canopy Growth stock (and many others still do) the blue chip cannabis stock to be long.It had the strongest balance sheet, early-mover advantage in both the U.S. and Canada, and strong backers via the $4 billion investment from Constellation Brands (NYSE:STZ).But it's not just CGC stock that's been under pressure. We've seen weakness in Aphria (NYSE:APHA), Tilray (NASDAQ:TLRY), Cronos Group (NASDAQ:CRON), Aurora Cannabis (NYSE:ACB) and most others.Many of the bullish catalysts for CGC and the cannabis industry as a whole are still in place. Both the U.S. and many parts of the globe are working toward legalization. Many companies and startups are focused on cannabis-related treatments and recreational uses.While Canopy reported 250% year-over-year revenue growth for Q1 last month, the results missed expectations. Earnings per share badly missed estimates, although the miss can be explained away by some financial engineering related to expiring warrants. Still, it would have been nice to be provided an adjusted number in the release.Further, it doesn't help that Constellation Brands and Canopy's management had a "strategy clash" in July, which results in Canopy CEO Bruce Linton leaving the company. That adds some uncertainty to the picture.Where does that leave us? The valuation is rich for CGC and most other cannabis plays and that's putting it lightly. That's no secret, but when the news flow is negative and momentum is bearish, the valuation will hurt the share price. We need to see the charts start to cooperate for Canopy Growth to look good on the long side.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 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Keep an Eye on Canopy Growth Stock, but Don't Buy It Just Yet appeared first on InvestorPlace.
TORONTO, Sept. 11, 2019 /PRNewswire/ - Canopy Rivers Inc. ("Canopy Rivers" or the "Company") (RIV.V) (CNPOF), a venture capital firm specializing in cannabis, is pleased to announce the formation of its Strategic Advisory Board, a group of respected business leaders that will provide guidance to Canopy Rivers' executive team as it continues to build and strengthen the Company's global portfolio of leading cannabis companies. "We have assembled a group of outstanding individuals with exceptional track records as leaders in their respective industries," said Narbe Alexandrian, President and CEO of Canopy Rivers.
Although its target product is green, Cronos Group (NASDAQ:CRON) and its legal marijuana peers have been seeing red lately. CRON stock in particular absorbed a severe beating to start off the second week of September, falling over 5%.Source: Shutterstock Of course, volatility in marijuana-based investments is nothing new. When the good times are rolling, investments like Cronos Group stock are akin to cryptocurrencies. In the height of the emotions, you don't anticipate that things can sour.Unfortunately, the downside is also very much like blockchain-based assets. If you're not prepared for the whiplash, CRON stock is simply not for you.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNevertheless, the 5% decline is surprising because compared to other major weed players, Cronos is the most stable. For instance, our own Chris Markoch recently wrote about the fundamental differences that make CRON stock stand out. * 7 Stocks to Buy In a Flat Market Primarily, Cronos refuses to perform the secondary share offering that has almost become a meme in this industry. One of the biggest criticisms of this tactic is that it dilutes equity. Instead, CRON is focused on sustainable expansionary strategies.As a prime example, the cannabis firm paid for its Redwood Holding Group in cash. Such measures have helped mitigate its debt exposure, which stands at around $15 million. In contrast, Canopy Growth's (NYSE:CGC) debt load is $700 million. Right there, Cronos Group stock has an advantage in terms of likely forward stability.Yet on Monday, CGC only took a 1.6% hit. A fellow Canadian marijuana firm, Aurora Cannabis (NYSE:ACB), only dropped 1.2%. If Cronos Group stock is so stable, why is it taking the most punishment? CRON Stock Must Ride Out Nearer-Term HysteriaA possible explanation into the severe decline for Cronos Group stock is the underlying company's aggressive investments toward cannabis-based vaporizers. Coincidentally, Markoch mentioned vaping pens and other derivative products as future viable revenue-making channels.I wholeheartedly agree. However, a recent surge in supposedly vaping-related acute lung illnesses have captured the public's attention. Recently, New York Governor Andrew Cuomo urged his constituents to cease vaping immediately. At present, the Centers for Disease Control and Prevention is investigating 450 cases across 33 states.But how does this relate to cannabis and CRON stock? According to The New England Journal of Medicine, the vast majority (80%) of people who vaped and suffered acute lung injury used both nicotine and tetrahydrocannabinol (THC) or cannabidiol (CBD) products.Even more damaging, The New England Journal of Medicine's findings were corroborated by other sources, most notably the Illinois Department of Public Health. According to the latter's research, several lung-illness patients had vaped materials containing THC.As you might imagine, this news is not at all conducive for CRON stock. Even if there is no connection between vaping cannabis-based products and the lung-illness epidemic, the optics are terrible.If this wasn't bad enough, the Food and Drug Administration warned consumers not to use products containing THC. In Cronos Group's defense, the company emphasizes the therapeutic component of the cannabis plant. Still, as I mentioned earlier, the stigma remains, potentially hurting Cronos Group stock.Moreover, the mainstream media is really latching onto this controversial story. For example, Dr. Mehmet Oz of "The Dr. Oz Show" fame on Monday came out against vaping. Essentially, he urged viewers to cease vaping until the medical community can figure out what's going on.For CRON, it appears that a core revenue channel is being taken away. Should Cronos Stock Stakeholders Worry?Admittedly, the news does not look good. Again, even if the arguments lacked merit, the anti-vaping establishment has the upper hand to frame the narrative. As CRON stock is more levered to vaping than other cannabis investments, it has taken the brunt of the damage.In the nearer term, shares might be more volatile than usual. However, in the long run, I don't see this impacting the company.One of the leading online vape shops in the country, Vapor Authority, recently posted a comprehensive rebuttal against the supposed connection between vaping and acute lung illnesses. Among their many arguments, the vaping retailer noted that neither the CDC nor the FDA have forwarded a causal factor. Moreover, it's likely that illegal products or substances from the black market are responsible for this crisis.It will take time for this issue to cool down. But once it does, CRON stock can get back to its business of growing cannabis in a fiscally sustainable manner.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post Cronos Group Stock Suffers Sharply Amid Vaping Crisis appeared first on InvestorPlace.