The markets just don’t seem to know what to do with themselves after the Federal Reserve announced its rate cut. After early gains, likely on the back of positive U.S. housing market and manufacturing data, stocks spent the bulk of the day drifting lower on worries about the trade war yet again intensifying.
The Dow Jones Industrial Average has dipped all the way back into negative territory as of this writing, with the S&P 500 about to join it.
Maybe that explains why a Chinese stock was a major point of interest today. And here are a few other stories that our readers found to be of particular interest.
Peace, Love and Aurora Cannabis Stock
Stifel Nicolaus analyst Andrew Carter issued a negative note on Aurora Cannabis (NYSE:ACB) stock, and that’s music to David Moadel’s ears. “I get so excited — almost giddy, really — when a stock of a great company tanks solely based on one analyst’s negative review,” he wrote.
He points out that since its peak in March, ACB stock has nearly halved, and some people have grown skittish after Aurora’s most recent earnings report. Even InvestorPlace’s Chris Lau and Laura Hoy are looking on the negative side. But Moadel thinks this is a huge opportunity. After all, what’s the best time to buy? When there’s blood in the streets.
“I view Aurora Cannabis as a solid investment in the future of legalized cannabis,” he wrote. “Even with its earnings miss, Aurora remains the second-biggest cannabis company in Canada — and with 625,000 kilograms of cannabis product expected on an annual basis by early 2020, I still put Aurora on my short list of licensed producers that can meet the demands of a rapidly growing market.”
$32 Is the Magic Level in JD Stock
Most of the discussion around JD.com (NASDAQ:JD) lately has been trade war this, trade war that. It’s hard to blame anyone for that — the news on that front hasn’t been good for a while, and it just keeps getting worse. As Bret Kenwell wrote, “It’s a threat that looms over many of its peers, Alibaba (NYSE:BABA) included. But it also includes iQiyi (NASDAQ:IQ), Baozun (NASDAQ:BZUN), Baidu (NASDAQ:BIDU) and others. One tweet can completely change the dynamic for this group and severely alter sentiment. Unfortunately, that’s just a risk that’s in these stocks at this point.”
But for right now, there’s decent revenue and earnings growth expected. And Kenwell sees the technical situation as improving. Resistance at $32 is the key. As he said, “Let’s see if JD.com can break out over $32 and gain momentum from here. If it can, it may be worth a look on the long side.”
Netflix Mired in a Crowded Field
Netflix (NASDAQ:NFLX) pioneered the streaming world that is quickly swallowing up the entertainment industry. But it feels like everyone and their brother … er, subsidiary … is getting into the streaming game.
So what does that mean for Netflix stock?
As Will Healy pointed out, “With original content no longer able to hold customers by itself, NFLX faces more direct competition than at any time in its history. While Netflix should hold its own for the foreseeable future, it leaves investors with few reasons to pay a high multiple for NFLX stock.”
For Healy, that multiple is key. He doesn’t think the biggest problem is that Netflix faces stiffer competition. The problem is that the market still hasn’t priced all that competition in.
When are Hexo’s Earnings, Anyway?
Using the time-honored method of “looking at the last earnings date and counting forward three months,” Hexo (NYSE:HEXO) should already have reported its latest quarterly earnings. Unfortunately for current and would-be investors alike, it hasn’t actually done so yet. And when will it? Your guess is probably as good as ours.
But while we wait, Vince Martin thinks there are a few things we need to know. First, “The issue for HEXO heading into earnings is that it’s not focusing on short-term strategy because it can’t. Hexo is trying to become a leader in cannabis edibles, but edibles won’t be available in Canada until mid-December, according to the industry’s regulator.”
And second, it’ll be difficult to guess what Hexo might do after earnings. Marijuana stocks have been dour even when they report good earnings. But maybe a bottom is near.
That’s it for today’s commentary. Please feel free to drop us a note at editor@investorplace.com to let us know what we got right and what we got wrong. Happy investing!
