Out Fox The $treet

  Aphria reported horrible FQ3 results for the period ending February. The Canadian cannabis company only generates 35% of revenue from cannabis sales. The stock is far too expensive with a $4.4 billion market valuation and their prime business only generating ~$210 million in run-rate revenues. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » Heading into the  Tilray  ( TLRY ) merger close,  Aphria  ( APHA ) reported a horrible quarter. The company further confirmed why overpaying for Canadian cannabis stocks is never warranted. My  investment thesis  remains negative on Aphria and the new entity despite a nearly 50% dip from the peak in February. Read the full article on Seeking Alpha.  Update - May 3 The deal closes with the new Tilray having a $8 billion valuation. The current FY revenue target is only $790 million, but the numbers include $350 millio...

Article originally published to Out Fox members back on Oct. 5.  Aphria is a cheap Canadian cannabis stock up $1 since this call. Twitter remains favorite social media play. Sample research from  Out Fox The Street : Aphria ( OTC:APHA ) For a long time, Aphria was been a favorite amongst the Canadian cannabis LPs due to a cheaper valuation and stronger execution. Back on Sept. 24, the stock was  highlighted  as a better Canadian cannabis pick than  Aurora Cannabis  ( OTC:ACB ) when Aphria traded at $4.31. Aphria has gotten a big boost today with Cantor Fitzgerald hiking the price target by C$2.50 to C$15.50. The amount equates to $11.68 for a stock trading at only $4.41 before the market opened today. Some key points of the bullish call for the quarter ending August: Canadian Rec. revenue to grow 37% QoQ. Canadian Rec. EBITDA margins to top 20%. FQ1'20 revenues of C$171M. FQ1'20 EBITDA of C$16.3M. A big key to the quarterly results is the expectation o...

Yext is a buy at $16. Aurora Cannabis is a buy on weakness to play a potential deal with 50% upside. Out Fox The $treet to launch soon! Stocks to watch on Thursday: Yext ( YEXT )  The digital knowledge management company should see a surge in demand as retail stores constantly shift open hours and services offered in store due to COVID-19. The stock has struggled to break strong resistance in the $17-18 range. A break would easily signal a run to previous highs.  Investors need to keep in mind that Yext should return to 30% revenue growth rates once the economy normalizes. Even the worse case scenario in FY21 (January) includes 18.5% growth. The stock has constantly bounced off $16 offering another gift entry point.  The Out Fox model remains highly bullish on the stock.  Aurora Cannabis ( OTC:ACB ) As mentioned in the  my research  today, the Canadian cannabis stock is a buy on any deal with  Aphria  ( OTC:APHA ). The ...

Aurora Cannabis was in talks with Aphria on a merger of equals. The deal was estimated to generate C$200 million in synergies. The stocks could have had up to 50% upside on a merger. Over the last week,  Aurora Cannabis  ( ACB ) and  Aphria  ( APHA ) apparently discussed a  merger  with talks falling apart. A merger would've made the new entity into a global giant in the cannabis space after the Canadians have lost a ton of market leadership to U.S. firms in the last year. The synergies alone could make this a no brainer deal as Aurora Cannabis already had made an impressive transformation on costs making the  long-term investment thesis  on the stock more bullish. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Ontario finally plans to allow new cannabis retail stores, but the 2020 target is far below industry hopes. Cannabis 2.0 rollout appears disappointing in part due to lack of Ontario retail stores until mid-2020. The $3 billion stock price remains expensive with capital needs while facing more industry delays. Just when the Canadian cannabis sector appeared headed towards a couple of major catalysts in 2020, the sector has again been sabotaged by the governments inability to license new stores or break the illegal market. My  investment thesis  was looking for a chance to turn bullish on  Aurora Cannabis  ( ACB ), but the company remains in a tough financial situation until catalysts kick in later into 2020. Read the full article on Seeking Alpha.  Update - December 23, 2019 Not surprising with all of the Cannabis 2.0 delays, Aurora Cannabis hit a new low today. The stock needs to test the sub-$2 range and once coming out the other ...

The Canadian cannabis industry forecasts cutting cultivation capacity by up to 800,000 kg, but the top 10 producers are still expanding existing production. Aurora Cannabis still expects to more than double production from FQ1 levels while the top 10 producers are still on path to swamp legal demand. Revenue estimates are getting to levels where the company would need to see further material price cuts to not exceed targets. The stock price target is $2 without further Canadian cannabis industry rationalization. The major problems facing  Aurora Cannabis  ( ACB ) is that too much of the Canadian cannabis industry hasn't followed their moves with cutting cultivation capacity for 2020 and beyond. A few companies had already cut production targets for various reasons, but the bigger players in the industry still appear full speed ahead with expansion while the industry is already over supplied. For this reason, my  investment thesis  thinks Aurora Cannab...

Stocks to watch on Tuesday: Glu Mobile (GLUU)  - the stock is soaring from an addition to the S&P SmallCap 600 index. The stock is incredible cheap at slightly over 2x bookings estimates. Glu Mobile has a huge gap to close here.  Aphria (APHA)  - the stock is up over 20% on a relief rally following a big dip in the stock price since the start of September. The Canadian cannabis company saw revenues decline from the prior quarter and adjusted EBITDA from the cannabis operations drop. The key was the reaffirming of guidance: revenues $650 million to $700 million and adjusted EBITDA of ~$90 million. The stock has a market cap of only $1.3 billion or about 14x EBITDA estimates. Aphria should bounce from here.  Snap (SNAP)  - the social messaging stock appears a good short, if the stock fails to break above $14 here. Snap shouldn't be above a market cap of $20 billion while still generating large EBITDA losses on revenues of $2.2 billion next year. ...