Cronos Group Inc: Recent Pullback Could Be an Opportunity

大麻巨头Cronos股价近期暴跌,买点可能已显现

2019-05-15 14:48:00 PROFIT

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Time to Check out Cronos Stock In today’s stock market, quality items seldom go on sale. So when a solid marijuana stock experiences a pullback, it deserves investors’ attention. I’m talking about Cronos Group Inc (NASDAQ:CRON), a vertically integrated cannabis company headquartered in Toronto, Ontario, Canada. While I like to uncover the lesser-known tickers in the marijuana industry for our Profit Confidential readers, sometimes it’s worth revisiting a well-known pot stock. Cronos happens to be one of the biggest players in the legal cannabis industry. A bonus is that, other than listing in its home country’s Toronto Stock Exchange, CRON stock also trades on Nasdaq. In an era when many pot stocks are only trading over the counter in the U.S., the fact that Cronos trades on a major U.S. stock exchange has boosted its appeal to American investors. Indeed, Cronos stock has been a favorite among marijuana investors. Over the past 12 months, shares of Cronos Group Inc have more than doubled in price. But as I mentioned earlier, what we are looking at right now is a stock that’s experiencing a pullback. In the morning of May 13, CRON stock plunged more than seven percent. That was quite a sizable drop, considering that Cronos is one of the biggest marijuana companies in the world by market capitalization. What looked even scarier is that, on May 9, Cronos stock already took an 8.8% tumble. So, should investors bail on this pot company, or should they consider this pullback to be an opportunity? Well, based on the reasons behind the stock’s downward recent move, I’m leaning toward the latter. Why Cronos Stock Was Falling You see, CRON stock’s tumble on May 13 was the result of a broader market decline. Due to escalated trade tensions (China announced that it will be raising tariffs on U.S. products starting on June 1), U.S. stocks were having a very bad start to the week. As of this writing, the Dow Jones Industrial Average is down more than 500 points. Looking around, we see that other big-name pot stocks trading on major U.S. stock exchanges—such as Tilray Inc (NASDAQ:TLRY), Canopy Growth Corp (NYSE:CGC), and Aurora Cannabis Inc (NYSE:ACB)—were also plunging on May 13. So, we know that the latest drop in Cronos Group’s share price wasn’t exactly the company’s own fault. But what about its tumble on May 9? Well, that was related to a piece of company-specific information that day: its first-quarter earnings report. For the quarter, the company generated CA$6.5 million in net revenue, which was a whopping 120% increase year over year. Solid top-line results were driven by booming sales of cannabidiol (CBD) oil and dry flower. (Source: “Cronos Group Inc. Announces First Quarter 2019 Results,” Cronos Group Inc, May 9, 2019.) For the quarter, Cronos had an operating loss of CA$558,000, which was a much narrower figure than the CA$2.2 million operating loss incurred in the year-ago period. “In the first quarter of 2019, the business performed in line with our expectations,” said Cronos Chief Executive Officer Mike Gorenstein. “We continue to stay laser-focused on our strategy of building our supply chain, distribution, intellectual property and brand portfolios.” (Source: Ibid.) However, as we know from CRON stock’s drop of almost nine percent on May 9, investors didn’t really cheer for this earnings report. In particular, while the company more than doubled its revenue year-over-year, that amount fell short of analysts’ expectation of CA$7.0 million. Furthermore, stock market participants weren’t exactly pleased to hear about the company’s guidance for adjusted earnings before interest, tax, depreciation, and amortization (EBITDA). During the earnings conference call, Cronos Group’s Chief Financial Officer Jerry Barbato said, “As we continue to invest in our business, our brands and R&D initiatives, our adjusted EBITDA will likely decline over 2019, will position the company for accelerated growth in 2020.” (Source: “Cronos Group, Inc. (CRON) CEO Mike Gorenstein on Q1 2019 Results – Earnings Call Transcript,” Seeking Alpha, May 9, 2019.) Not a Market Favorite Right Now, But Still a Solid Pot Stock Sure, a missed top-line number and a projected adjusted EBITDA decline don’t make the best news. However, as it stands, Cronos is still one of the best marijuana companies in the market. You see, the CRON stock bears can say what they want, but the blunt reality is, the company managed to sell a lot more cannabis and produce it at a lower cost. In the first quarter of 2019, Cronos Group Inc sold 1,111 kilograms (2,449 pounds) of cannabis, a 122% increase year-over-year. Meanwhile, the company’s cost of sales was $2.69 per gram, down 14% from the $3.13 per gram from a year earlier. Thanks to lower production costs, Cronos Group’s gross margin expanded from 47% in the year-ago period to 54% in the first quarter. (Source: Cronos Group Inc, op cit.) Don’t forget, in the first quarter, Cronos closed a CA$2.4-billion strategic investment from Altria Group Inc (NYSE:MO), the maker of “Marlboro” cigarettes. Altria now owns around 45% of Cronos and has a warrant to increase its stake by another 10%. Having a strategic partnership with the tobacco giant could bring Cronos the additional financial resources, product development capabilities, and regulatory expertise that are needed to expand its presence in the global cannabis industry. Cronos Group Inc Stock Chart Chart courtesy of StockCharts.com Analyst Take At the end of the day, keep in mind that marijuana stocks are some of the most volatile tickers in the market. And since uncertainty has been a theme for U.S. equities lately, marijuana companies—Cronos included—could experience further volatility. The company’s business remains solid, however. If Cronos Group Inc can continue producing and selling more cannabis while improving its operating efficiency, it could turn out to be a big winner in the long run. In other words, CRON stock’s recent pullback could be a good investment opportunity.
核查克族库存的时间 在今天的股票市场上,优质商品很少出售。因此,当一只稳定的大麻股票遭遇回调时,它值得投资者关注。 我说的是 Cronos 集团( NASDAQ : CRON ),一家垂直整合的大麻公司,总部位于加拿大安大略省的多伦多。 虽然我喜欢为我们的《盈利机密》读者披露大麻行业中不太知名的股票,但有时值得重新审视一只知名的大麻股票。 克罗诺斯恰好是合法大麻产业中最大的参与者之一。另一个好处是,除了在本国的多伦多证券交易所( Toronto Stock Exchange )上市外, CRON 的股票也在纳斯达克上市。 在许多火锅股票只在美国场外交易的时代,克罗诺斯在美国一家主要证券交易所交易的事实提高了它对美国投资者的吸引力。 事实上,克洛诺斯股票一直是大麻投资者的最爱。在过去12个月里, Cronos Group Inc 的股价上涨了一倍多。 但正如我前面提到的,我们现在所看到的是一只股票正经历着回落。5月13日上午, CRON 股价暴跌超过7%。 考虑到克罗诺斯是世界上市值最大的大麻公司之一,这一降幅相当大。更可怕的是,5月9日,克罗地亚股市已经下跌了8.8%。 那么,投资者应该为这家罐子公司纾困吗?还是他们应该认为这次撤资是一个机会? 嗯,基于最近股市下跌背后的原因,我倾向于后者。 为什么克罗诺斯股票下跌 你看,5月13日 CRON 股价暴跌是大盘下跌的结果。 由于贸易紧张局势升级(中国宣布将从6月1日开始提高对美国产品的关税),美国股市本周开局非常糟糕。截至本文撰写之时,道琼斯工业平均指数下跌了500多点。 展望未来,我们看到其他在美国主要证券交易所交易的大牌大麻股票——如 Tilray Inc ( NASDAQ : TLRY )、 Canopy Growth Corp ( NYSE : CGC )和奥罗拉(Aurora) Cannabis Inc ( NYSE : ACB )——也在5月13日暴跌。 因此,我们知道, Cronos Group 股价最近的下跌并不完全是该公司自己的错。但5月9日的暴跌又有什么意义呢? 那么,这与当天的公司特定信息有关:第一季度收益报告。 本季度,公司实现净利润650万加元,同比增长120%。稳定的顶线成果是由蓬勃销售的大麻( CBD )油和干花。(来源:“ Cronos Group Inc .公布2019年第一季度业绩,” Cronos Group Inc .,2019年5月9日) 在本季度, Cronos 的营业损失为558,000加元,比去年同期发生的220万加元的营业损失要小得多。 “2019年第一季度,该业务的表现符合我们的预期,” Cronos 首席执行官 Mike Gorenstein 表示。“我们继续专注于构建供应链、分销、知识产权和品牌组合的战略。”(资料来源: Ibid ) 然而,正如我们从5月9日 CRON 股价下跌近9%中所知,投资者并没有真正为这份盈利报告欢呼。尤其是,尽管该公司收入同比增长一倍以上,但这一数字低于分析师预期的700万加元。 此外,股市参与者并不十分高兴地听到公司关于调整后息税折旧摊销前利润( EBITDA )的指导意见。 Cronos Group 首席财务官 Jerry Barbato 在盈利电话会议上表示:“随着我们继续投资于我们的业务、品牌和研发计划,我们调整后的 EBITDA 很可能在2019年下降,这将使该公司在2020年实现加速增长。”(资料来源:“ Cronos Group , Inc .( CRON )首席执行官 Mike Gorenstein 于2019年第一季度业绩——盈利预测”, Seek Alpha ,2019年5月9日。(二) 现在不是市场的宠儿,但仍然是一个坚实的股票 当然,错过的一线数字和预计调整后的 EBITDA 下降并不是最好的消息。然而,就目前来看,克罗诺斯仍然是市场上最好的大麻公司之一。 你看, CRON 的股票持有者可以说他们想要什么,但最直接的现实是,该公司成功地以较低的成本销售了更多的大麻。 2019年第一季度, Cronos Group Inc 出售了1111公斤(2449磅)大麻,同比增长122%。与此同时,该公司的销售成本为每克2.69美元,较上年同期的3.13美元下降了14%。 由于生产成本降低, Cronos 集团的毛利率从去年同期的47%上升到第一季度的54%。(资料来源: Cronos Group Inc ., op cit .) 别忘了,在第一季度,克罗诺斯关闭了奥驰亚集团( Altria Group Inc .)24亿加元的战略投资,奥驰亚集团是“万宝路”香烟的制造商。 奥驰亚现在拥有克罗诺斯45%的股份,并有权再增加10%的股份。与烟草巨头建立战略伙伴关系可以为克罗诺斯带来更多的财政资源、产品开发能力以及扩大其在全球大麻产业中的地位所需的监管专门知识。 Cronos Group Inc .股票图表 股票图表的礼节.com 分析师承担 最后,请记住,大麻股票是市场上波动最大的股票。由于不确定性最近一直是美国股市的主题,包括克罗诺斯在内的大麻公司可能会经历更大的波动。 然而,该公司的业务仍然稳固。如果 Cronos Group Inc 能够在提高运营效率的同时继续生产和销售更多的大麻,那么从长远来看,它可能会成为一个大赢家。换句话说, CRON 股票最近的回落可能是一个很好的投资机会。