DEEP FOCUS: Everything you need to know about GW Pharmaceuticals

… of medical marijuana companies that include Canopy Growth Corporation (NYSE: CGC), Aurora Cannabis (NYSE: ACB), Aphria Inc. (NYSE: APHA), …

Shares of GW Pharmaceuticals (NASDAQ: GWPH) have gained 72% in the year-to-date period, emerging as a new favorite among pot investors. However, before you take a plunge into any stock, it is ideal to have a clear understanding of the company and its operations.

Here is a quick look at everything you needto know about the British biopharmaceutical company.

Operations

GW Pharmaceuticals focuses on discovering and developing cannabinoid prescription medicines using botanical extracts. The company’s lead product is Epidiolex, an oral medicine for the treatment of refractory childhood epilepsy, as well as Dravet syndrome, Lennox-Gastaut syndrome, tuberous sclerosis complex, and infantile spasms.

Over 7,600 patients have received Epidiolex prescriptions since launch. The company also develops and markets Sativex, an oromucosal spray for the treatment of spasticity due to multiple sclerosis. Separately, it develops various product candidates for the treatment of glioblastoma, neonatal hypoxic-ischemic encephalopathy, and schizophrenia.

The company has submitted a regulatoryapplication in Europe for the adjunctive treatment of seizures associated withLGS and Dravet syndrome. It continues to evaluate Epidiolex in additional rareepilepsy conditions including Tuberous Sclerosis Complex (TSC) and Rett syndrome.

For the most recent quarter, revenues from Epidiolextotaled $33.5 million.

Marketand competition

GW Pharmaceuticals competes with a number of medical marijuana companies that include Canopy Growth Corporation (NYSE: CGC), Aurora Cannabis (NYSE: ACB), Aphria Inc. (NYSE: APHA), and Cronos Group (NASDAQ: CRON).

medical marijuana companies

These companies have been identified asmajor players in the global medical cannabis market, which is projected to growat a CAGR of 22.9% during 2019-2024 to reach a value of $44.4 billion by 2024,according to a reportby imarc.

The report states that cannabis is a preferred treatment option as it is safer and has fewer side effects. Cancer is the biggest area of application for medical cannabis while others include arthritis, migraine, and epilepsy. North America is the largest market for medical cannabis while other key regions include Europe, Asia Pacific, Latin America, and the Middle East and Africa.

Financials

GW Pharmaceuticals has reported losses in all four trailing quarters, though it has surpassed Wall Street consensus in three of the quarters. Revenues have been increasing over the years, though not really in a steady manner.

For the current financial year, Wall Street expects GW Pharma to report revenues of $213 million, compared to just over $15 million last year, helped by its cannabis-based products. The topline is projected to more-than-double in 2020 to $511 million. These projections are clear evidence for the market’s optimism over the company’s growth potential.

On theother hand, it might take some time for the company to jump into profitability,though it is likely to cut down its losses. For the current fiscal year, lossesare projected to be $4.18 per share, less than half of what it reported infiscal 2018. For fiscal 2020, we might see further cut down in losses to $2.34.

Cash Flow

Over the past one year, high operating costs, especially research and development expenses, have impacted the UK-based pharma firm’s cash flows, which remained in the negative territory in each of the four trailing quarters.

Liquidity is expected to remain under pressure even as the company’s key drug candidate Sativex is getting ready for the final approval after successfully completing the clinical trials. Going forward, contributions from Epidiolex will help GW Pharma improve bottom-line performance while easing the strain on cash flow.

GW pharma cash flow

At the end of theMarch quarter, cash and cash equivalents came in at $521.7 million, down 12%from the same period of 2018. During the three-month period, operating cashflow improved to (-) $58.4 million from (-) $65.4 million in the same period oflast year. Cash flow benefitted from an improvement in accrued liabilities to$6.7 million from last year’s negative figure. The progressive reduction indebt in recent times also bodes well for the cash position.

Streetview

According to TipRanks, all the 10 analysts who are tracking the stock have a “Buy” rating with a 12-month target of $219. This is an upside of about 25% from today’s trading level of $176. The bullishness of the stock is pivoted on solid sales growth expected from its lead cannabinoid product Epidiolex.

Guggenheim analyst Yatin Suneja in his research note states, “GWPH reported a solid Epidiolex sales beat ($33.5MM vs. Street ~$15MME) on significant demand and better than expected uptake in the marketplace. While management did try to caution investors by highlighting “unusual” benefits from bolus/pent-up demand in 1Q, we expect continued robust and broad uptake for the drug.”

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Could Aurora Cannabis Inchares (NYSE:ACB) Change Direction After More Shorts?

Aurora Cannabis Inc. produces and distributes medical cannabis products. The company has market cap of $7.35 billion. It is vertically integrated and …

The stock of Aurora Cannabis Inchares (NYSE:ACB) registered an increase of 1.49% in short interest. ACB’s total short interest was 72.08 million shares in June as published by FINRA. Its up 1.49% from 71.03 million shares, reported previously. With 32.09 million shares average volume, it will take short sellers 2 days to cover their ACB’s short positions. The short interest to Aurora Cannabis Inchares’s float is 7.76%.

The stock decreased 1.88% or $0.14 during the last trading session, reaching $7.3. About 16.07M shares traded. Aurora Cannabis Inc. (NYSE:ACB) has risen 45.78% since June 22, 2018 and is uptrending. It has outperformed by 41.35% the S&P500.

Aurora Cannabis Inc. produces and distributes medical cannabis products. The company has market cap of $7.35 billion. It is vertically integrated and horizontally diversified across various divisions of the cannabis value chain, from facility engineering and design to cannabis breeding, genetics research, production, derivatives, high value-add product development, home cultivation, wholesale, and retail distribution. It has a 33.8 P/E ratio. The company’s products consist of dried cannabis and cannabis oil; CanniMed vegan capsules; and hemp products, as well as sells vaporizers, consumable vaporizer accessories, and herb mills for using herbal cannabis products.

More notable recent Aurora Cannabis Inc. (NYSE:ACB) news were published by: Investorplace.com which released: “Should You Buy Canopy Growth Stock Prior to Earnings in June? – Investorplace.com” on May 29, 2019, also Benzinga.com with their article: “Signs An Aurora Cannabis Technical Breakout May Be Imminent – Benzinga” published on April 24, 2019, Nasdaq.com published: “Akerna Stock Offers Investors a New Way to Play the Cannabis Craze – Nasdaq” on June 21, 2019. More interesting news about Aurora Cannabis Inc. (NYSE:ACB) were released by: Finance.Yahoo.com and their article: “Forget Aurora Cannabis: These 3 Growers Offer a More Attractive Value Proposition – Yahoo Finance” published on May 27, 2019 as well as Fool.com‘s news article titled: “Marijuana Stocks: You’re Missing 2 Key Points About International Expansion – The Motley Fool” with publication date: June 08, 2019.

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Here Is Why You Should Trust Cannabis Stocks in a Recession

Canopy Growth (TSX:WEED)(NYSE:CGC) and Aurora Cannabis (TSX:ACB)(NYSE:ACB) are the top two Canadian cannabis stocks going by market …

Before this month started, investors were scrambling to react to a volatile month of May. Trade tensions between the United States and China stoked economic anxiety, and oil plunged into a bear market to start June. Economists have warned that slow growth will be the reality in 2019, but the threat of a recession still looms large. Yield curve inversions have done little to alleviate those concerns.

I want investors to forget about income-generating equities for a moment and instead consider another option in a recession: cannabis stocks. Yes, you read that right. Cannabis stocks have soared over the past several years, passing through significant volatility along the way. However, these equities may be one of the best options to own in dangerous economic times.

Canopy Growth(TSX:WEED)(NYSE:CGC) and Aurora Cannabis(TSX:ACB)(NYSE:ACB) are the top two Canadian cannabis stocks going by market cap. These equities are a good place to start considering both companies have already carved out an enormous production footprint that will grow into the next decade. Canopy Growth stock had climbed 55% in 2019 as of close on June 19, while Aurora had increased 46% year to date.

What makes cannabis a good play in difficult economic times? For one thing, “vice” has historically been robust in the face of broader turbulence. So-called sin stocks like alcohol and tobacco are solid targets in tough periods. In some cases, earnings have received a boost. Alcohol sales in the United States and Canada increased in 2008 and 2009.

A new industry like cannabis also has the potential to lift other sectors. Take the massive construction projects required at Canopy Growth and Aurora in order to support the ramp up in production capacity. Aurora Sky, Aurora Cannabis’s new 800,000-square-foot greenhouse facility, is expected to be able to produce 100,000 kilograms of cannabis annually at full capacity. The project cost over $150 million and created many jobs in the Edmonton area.

Cannabis stocks are new to the market, so investors have yet to see how these equities will behave in a recession. However, consumption trends during the last financial crisis may give us some insight into how the industry would fare in a pullback. Cannabis consumption has been on the rise in the 21st century. Drug use rates did drop among the unemployed during the last recession, but the crisis was not enough to upend the broader trend for the recreational cannabis market. Reliable data is admittedly hard to come by, as the industry has only recently come out of the shadows due to new legislation.

The cannabis market has staked a reputation as a lucrative but volatile sector for investors. Economic turbulence could see the cannabis sector emerge as a safe spot if the industry can prove as robust as other sin stocks. Large producers with an established footprint like Canopy Growth and Aurora Cannabis will be the safest plays in such a scenario.

You might be missing out on one of the biggest opportunities in Canadian investing history…

Marijuana was legalized across Canada on October 17th, and a little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

Besides making key partnerships with Facebook and Amazon, they’ve just made a game-changing deal with the Ontario government.

One grassroots Canadian company has already begun introducing this technology to the market – which is why legendary Canadian investor Iain Butler thinks they have a leg up on Amazon in this once-in-a-generation tech race.

This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.

Learn More About This TSX Stock Now

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Why Aurora Cannabis (TSX:ACB) Could Double in Price!

Aurora Cannabis (TSX:ACB)(NYSE:ACB) is a long way from peak performance. The cannabis company’s all-time high of almost $17 per share is well …

Aurora Cannabis (TSX:ACB)(NYSE:ACB) is a long way from peak performance.

The cannabis company’s all-time high of almost $17 per share is well in the rear view today, with the stock trading at the time of writing at about $10 per share — a price it’s remained at for over a month now.

It’s getting analysts and investors alike frustrated with the stock, wondering if there is any hope to reach those peak numbers again, and, ideally, surpass them.

Well, it turns out that the same rule that applies to the markets as a whole likely applies to Aurora as well. It boils down to one key word we all hate to hear: patience.

Aurora has an incredibly intriguing future ahead of it. While that future can be painful at times, those who stick with the stock will likely see a doubling in share price in the relatively near future. Let’s look at why.

Earnings results

It’s easy to look at Aurora and become discouraged when it comes to the company’s earnings results — or, rather, lack of them. Operating income has been in the red report after report, with the most recent hitting a loss of about $86 million. Granted, it’s an improvement from the last two quarters with a loss of $148 million and $111 million, but it’s still disappointing to see all that red again and again.

But here’s the number I’m most interested in: cost per gram. This is where investors should focus their attention when it comes to the larger marijuana producers; it’s where Aurora has recently had some pretty great results. The company now boasts a cost of sales per gram of $1.42, down 26% from the last quarter and well on the way towards the company’s goal of producing at a cost of $1 per gram.

This metric is already a lot smaller than other leading cannabis producers such as Aphria at $3.90 per gram and $6.40 for cannabis titan Canopy Growth. But what makes this number drool worthy is the cannabis producer’s outlook on production.

Going global

Aurora’s executives have been quite outspoken. In Canada, there isn’t a desperate need to fill when it comes to cannabis; it’s a global phenomenon — one the executives are planning to be set up for in the next five years. To achieve this, the company has been making acquisition after acquisition — 15 in total in fewer than three years. And, of course, it’s been diluting share prices in the process.

While the market cap has been going up, share prices have been going further down. But Aurora is doing this for a reason. The company talks about the cannabis industry being worth about $150 billion globally, with medical cannabis making up $50 billion of that total. That’s a large opportunity looking to be filled.

That’s where Aurora is looking to shine, becoming the leader in terms of production capacity. The goal is to reach 700,000 kilograms of cannabis production per year, making them first even to Canopy Growth at this point in time. No other cannabis producer can get anywhere near numbers like these.

While some analysts have said this would create an oversupply in the Canadian market, again, Aurora is looking for global expansion. It will need the product available once everything is said and done, as the company already has its foot in a number of countries around the world. And again, this need could be in a mere five years.

Foolish takeaway

Aurora offers one of the best options out there. In my view, this is a buy-and-hold investment, with the $10 share mark an opportunity for investors looking to get in on the cannabis market and have some patience with it. The potential for growth is high, and the company continues to be a rival with some of the largest cannabis companies out there for production potential. Even if cannabis goes global and they have a small amount the market share (which, by the way, should be much larger), Aurora stands to make billions in profits.

In the next year, analysts predict Aurora could double to $20 per share. In a decade, with potentially the U.S. and most of Europe on board with cannabis legalization, that number could soar into the stratosphere.

You might be missing out on one of the biggest opportunities in Canadian investing history…

Marijuana was legalized across Canada on October 17th, and a little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

Besides making key partnerships with Facebook and Amazon, they’ve just made a game-changing deal with the Ontario government.

One grassroots Canadian company has already begun introducing this technology to the market – which is why legendary Canadian investor Iain Butler thinks they have a leg up on Amazon in this once-in-a-generation tech race.

This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.

Learn More About This TSX Stock Now

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Is Charlotte’s Web (TSX:CWEB) a Better Buy Than Aurora Cannabis (TSX:ACB)?

Competition in the cannabis industry is growing, and it’s getting even harder for industry leaders like Aurora Cannabis (TSX:ACB)(NYSE:ACB) to hold …

Competition in the cannabis industry is growing, and it’s getting even harder for industry leaders like Aurora Cannabis (TSX:ACB)(NYSE:ACB) to hold their positions. With a market cap of around $10 billion, Aurora is definitely one of the highest-valued stocks in the markets, but whether it will stay that way is the big question.

Let’s take a close look with how the company compares against Charlotte’s Web Holdings (TSX:CWEB), which recently listed on the TSX.

Recent performance

Aurora is coming off a Q3 where its sales reached $65 million, which was still short of expectations. For the trailing 12 months, the company’s revenues are now at around $168 million, which is significant growth considering sales for fiscal 2018 were just $55 million and $18 million the year before that. However, it’s been the bottom line that has been the issue, with Aurora incurring net losses of $211 million over the past four quarters. And with lots of expansion on the way, it could get a lot worse before it gets better.

In its most recent quarter, Charlotte’s Web posted sales of US$22 million, putting its total for the last four periods at US$78 million, or about $104 million after conversion. It’s well off of Aurora’s pace, but a key difference is that Charlotte’s Web has been able to post profits in each of its past four quarters. While they haven’t been particularly large, the company has even been able to post a positive operating income figure as well.

Strategy and overall potential

The two companies are deploying vastly different strategies from one another. Aurora is focusing on the global market with a presence in dozens of countries, with Canada playing a big role in that. While the company is looking to deploy a hemp strategy for the U.S., it’s going to be well behind Charlotte’s Web, a company that’s already dominating that space. With its products already in thousands of locations across the country, Charlotte’s Web’s strategy has focused on hemp, and it’s proven to be a very strong one thus far.

Overall, Charlotte’s Web certainly has the edge here. Not only has it generated strong growth, but it’s more focused than Aurora’s and has been profitable as well.

Valuation

Although Charlotte’s Web has had fewer sales than Aurora, it trades at around 21 times its revenues, which is far less than the multiple of 61 that Aurora’s stock trades at. In terms of valuation, it’s clear that Charlotte’s Web provides investors much better value for their money today.

Bottom line

Aurora may be ahead of Charlotte’s Web based on sales, but that could change a year from now, as hemp has been taking off in the U.S. and could lead to even more growth in that segment. And with a more sustainable business model that’s provided stronger financials, it’s hard not to give Charlotte’s Web the edge, especially with its valuation being much more attractive overall.

You might be missing out on one of the biggest opportunities in Canadian investing history…

Marijuana was legalized across Canada on October 17th, and a little-known Canadian company just unlocked what some experts think could be the key to profiting off the coming marijuana boom.

Besides making key partnerships with Facebook and Amazon, they’ve just made a game-changing deal with the Ontario government.

One grassroots Canadian company has already begun introducing this technology to the market – which is why legendary Canadian investor Iain Butler thinks they have a leg up on Amazon in this once-in-a-generation tech race.

This is the company we think you should strongly consider having in your portfolio if you want to position yourself wisely for the coming marijuana boom.

Learn More About This TSX Stock Now

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