The Aphria stock price had a big rally after earnings, and it shows the market wants to see a rebound…
In the last few months, we’ve seen some scandals in the cannabis industry that have pushed prices down.
On August 1, the Aphria stock price opened at $5.35 per share. After the company reported earnings, it jumped to an intra-day high of $7.45 on August 2. That’s a nice 39% pop in just one day.
The company increased its overall net cannabis revenue by 85%, which is a big deal.
However, as I mentioned in a report about Aphria, there were some important lessons from this earnings report that weren’t being talked about.
There’s a slew of companies ready to report earnings and while we know not all of them are in our model portfolios, we know our members own companies that will release financial results over the next few weeks.
Today, we wanted to make sure you had a list of what companies are going to report earnings and when they are expected to do so.
But I also wanted to make sure you know the biggest red flags to watch out for to make sure that the companies you own deserve your hard-earned money…
What to Know About Earnings Reports
In an earnings report, some companies will emphasize certain aspects of its business, while leaving others untouched. This practice embellishes high-performance areas and distracts you from what’s really going on.
Now, to help you filter out what’s important and what is just slapping a fresh coat of paint on a barn that is about to fall down, I compiled a list of some of the biggest red flags when it comes to earnings reports.
Cannabis Red Flags
- Late Filings
A late filing reflects management’s inability to maintain and track its own performance.
- Revenue Manipulation
Revenue is vulnerable to misrepresentation. Some companies will report revenue before it is actually earned, or simply make up income that is not there. Something else to watch is sales that are complicit to related parties – like a sister or subsidiary – that don’t actually go through.
- Inventory Manipulation
This is a gain/loss, but on biological assets for cannabis plants, this is tricky.
- Pending Class-Action Lawsuits
These can significantly impact share price upon a win or a loss.
Cannabis Earnings Reports in August
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Now that you’re even more prepared for earnings season, I wanted to give you a list of some of the biggest reports coming out for the rest of August.
If you own any of them, I want to make sure you know when they are set to release their financials.
We know this is a lot to keep track of, which is why many of our members are utilizing our NICILytics stock rating system.
Not only do we provide a rating for over 200 companies, our analyst reports are derived straight from the company’s financial statements on a consistent reporting basis.
We help you from being overwhelmed by the amount of investing choices out there by focusing on the best long-term cannabis plays with our easy rating system.
As always, Lifetime Members can access our stock ratings right here.
If you don’t already have access to our one-of-a-kind database, you can learn how to get immediate access here.
Executive Director, National Institute for Cannabis Investors
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August 14 2019