Aurora Cannabis: Animal Spirits

Aurora Cannabis continues rallying after another premium deal.
The company not providing financial details of acquisitions and quarterly operating losses in press releases is a major red flag.
Momentum traders on Robinhood are very bullish on the stock.
Aurora Cannabis has the potential to improve the investment picture via more detailed financials on the FQ2 report with more details of the path to an EBITDA-positive FQ4.
The company is still making the wrong deals.
My previous research has been critical of Aurora Cannabis (ACB) making too many deals and aggressively expanding cannabis production into the inevitable sector crash. Instead of making strategic partnerships and looking to sell production facilities at premium prices, the company continues down the path of massive shareholder dilution that will eventually wreck the stock.
Read the full article on Seeking Alpha.
Update 1/20
For investors ultra bullish that Canadian cannabis growers are going to take over the world including the US, read this Benzinga investor conference summary. Note what a company like CuraLeaf (CURLF) has going on in the US.

-The company’s 12 cultivation facilities and 10 growing operations give it   650,000 square feet of production space, the most of any American cannabis company, he said. 
-Lusardi highlighted Florida and New Jersey as success stories, as he said CuraLeaf opened more stores in Florida than anyone else in 2018 and holds 40 percent of the New Jersey retail cannabis market.
-“Cannabis is a commodity, but we’ve already seen on the west coast tremendous pressure on the commodity itself,” he told a room of investors. “For now, it pays handsomely in the U.S. to be a vertical operator given the state-by-state operations.”

The point here is that just about every country in the world will be able to produce enough cannabis for their own markets. Global expansion is fools gold. 
Disclosure: No position. Please review the disclaimer page for more details. 

Comments

Popular posts from this blog

Camping World: Momentum Stinks

Snap Q4'18 Earnings - Live Updates