IB Net Payout Yields Model

Aurora Cannabis: Positive Market Data With Several Catches

The Canadian cannabis industry saw a big boost in July sales of dried cannabis.
The sales increase was swamped by additional supply pushing inventory levels in 30.5 times total sales for the month.
Aurora Cannabis recently dumped a large amount of inventory on the wholesale bulk market at a low gross profit.
The stock made a nice bounce off $4, but my stock view still remains bearish with a market cap of $4.5 billion and weak financials.
The cannabis sector has taken a beating in the last few months as sector sales and regulatory issues have taken out some of the hot air in the bubble. The July sales and inventory data from Canada finally provides some positive data points for investors, but the market still faces supply rationalization issues not adequately addressed in the recent Aurora Cannabis (ACBcorporate update. The stock has made an initial bounce off the recent lows below $4, but the investment thesis is still tilted towards a bearish view until the cannabis sector addresses these supply issues.
Read the full article on Seeking Alpha.

More commentary - OutFoxThe$treet - October 10
Update - October 10
Aurora Cannabis is back below $4 on a brutal warning by HEXO (HEXO). The chart suggests the recent support around $4 isn't going to hold. Avoid the stock.

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