InvestorPlace Roundup: Aphria Stock Needs Better Friends

Marijuana and oil stocks were among the hottest topics today

The markets are hanging out in the red today, spurned on by fears about a spike in oil prices. Drone strikes against oil facilities in Saudi Arabia sent the oil market scrambling — both Brent and WTI crude prices are up well over 10% today.

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The timeline for getting the damage repaired is likely to be counted in weeks, not days. And in the meantime, oil stocks are on everyone’s mind. The United States Oil Fund (NYSEARCA:USO) pushed to gains of over 13% on the day. It would be better news if it didn’t come with headlines of international unrest.

But as many readers focused their attention on the oil stocks, here are a few of the other articles InvestorPlace readers found particularly interesting today:

Aphria Stock Needs Better Friends

There’s a tendency in the markets for some stocks to occasionally fall in sympathy with one of their close peers. And James Brumley thinks that’s exactly what’s happening with Aphria (NYSE:APHA) stock.

Aphria flexed on earnings, and notable to many investors was the fact that APHA actually turned a profit. That’s something plenty of its marijuana stock brethren are still working toward. You’d think that would launch APHA stock to the head of the pack, but its rally mostly faded with the rest.

Brumley does point out that the amount of Goodwill on the books may be a problem, but overall says, “Right or wrong, Aphria stock is guilty by association. When most other names in the business are losing ground due to valuation concerns, the selling can be rather indiscriminate.”

Understanding How Hexo Stock Values Its Inventory

As we wait for Hexo (NYSE:HEXO) to report earnings, Mark Putrino wants to make sure you understand one of the most interesting and potentially misunderstood parts of a marijuana stock’s valuation — how it values its inventory.

As Putrino explains, “Four variables are considered to determine the valuation. These are the average selling price, the yield per plant, the stage of growth and the amount of wastage.”

The average selling price and stage of growth are pretty straightforward, but wastage and yield are estimated, and if you want to invest in Hexo stock, it’s important to understand how they make those estimates.

(For what it’s worth, he also mentions that Hexo is “very forthcoming” with the calculation and the numbers it uses.)

Vital Levels to Watch for Nio Stock

A couple of InvestorPlace writers took a look at Nio (NYSE:NIO) today, both considering it for a short-term trade.

Nio stock is on a bit of a roll lately, and Bret Kenwell says that with a potential bottom in for the Chinese auto market, Nio could be ready for more gains. As he put it, “The technicals are starting to behave better for Nio stock; now it needs the fundamentals to improve as well.”

Nicolas Chahine, meanwhile, thinks if the stock can push past resistance, there are more gains to be found. “The NIO stock price is now headed into resistance because of a price cluster near $3.50 per share,” he wrote. “If I’m not yet long the stock, I would wait until the bulls are able to push prices above that before chasing it. ”

It’s also important to remember that Nio has earnings coming up on Sept. 24.

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!


Article printed from InvestorPlace Media, https://investorplace.com/2019/09/investorplace-stocks-roundup-aphria-stock-needs-friends/.

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