Out Fox The $treet

Yext is a buy at $16. Aurora Cannabis is a buy on weakness to play a potential deal with 50% upside. Out Fox The $treet to launch soon! Stocks to watch on Thursday: Yext ( YEXT )  The digital knowledge management company should see a surge in demand as retail stores constantly shift open hours and services offered in store due to COVID-19. The stock has struggled to break strong resistance in the $17-18 range. A break would easily signal a run to previous highs.  Investors need to keep in mind that Yext should return to 30% revenue growth rates once the economy normalizes. Even the worse case scenario in FY21 (January) includes 18.5% growth. The stock has constantly bounced off $16 offering another gift entry point.  The Out Fox model remains highly bullish on the stock.  Aurora Cannabis ( OTC:ACB ) As mentioned in the  my research  today, the Canadian cannabis stock is a buy on any deal with  Aphria  ( OTC:APHA ). The ...

Aurora Cannabis was in talks with Aphria on a merger of equals. The deal was estimated to generate C$200 million in synergies. The stocks could have had up to 50% upside on a merger. Over the last week,  Aurora Cannabis  ( ACB ) and  Aphria  ( APHA ) apparently discussed a  merger  with talks falling apart. A merger would've made the new entity into a global giant in the cannabis space after the Canadians have lost a ton of market leadership to U.S. firms in the last year. The synergies alone could make this a no brainer deal as Aurora Cannabis already had made an impressive transformation on costs making the  long-term investment thesis  on the stock more bullish. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Aurora Cannabis announced plans for a 1:12 reverse stock split. Most research supports dire outcomes for most reverse stock splits. Not all splits are negative, though, providing potential upside on the stock after already falling on the news. Aurora Cannabis only trades at ~3x sales estimates now. With  Aurora Cannabis  (NYSE: ACB ) trading below $1, the market shouldn't be too surprised the company announced a reverse split of their stock. Historically, reverse splits are negatives for participating stocks, but the cannabis sector is a new space where the capital structure and regulatory restrictions are as much the issue for the company than any dire situation. My  investment thesis  still remains positive on the catalysts for Aurora Cannabis during 2020, while the stock will be volatile during this process. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Aurora Cannabis should benefit from expanded Canadian cannabis retail store openings in 2020. The Canadian market remains very inefficient with key provinces of Ontario and Quebec lacking retail stores. Even based on planned store expansions in 2020, the company would only see a 25% boost to consumer cannabis revenues. The stock has a $2 billion valuation with analysts only forecasting sales reaching $356 million in FY21. As  Aurora Cannabis  ( ACB ) flounders around $1.50, the negatives surrounding the stock shouldn't completely overshadow the opportunities for the Canadian cannabis market in 2020. The company has substantial catalysts in 2020 including additional retail stores in Canada, the rollout of Cannabis 2.0 products and global expansion including the U.S. CBD market. This article is the first in a series of articles discussing the 2020 catalysts for Aurora Cannabis with a focus on the opportunity for more retail stores in Canada. Read the full ...

Aurora Cannabis announced a major reorg which includes the CEO retiring and cutting over 50% of operations expenses. The company guided to substantial revenue misses for FQ2/FQ3 and provided no indication Cannabis 2.0 products are meeting sales goals. The cannabis company plans to launch a value brand. Even at $1, Aurora Cannabis would still trade at 3x updated sales targets for FY21. Following news  Aurora Cannabis  ( ACB ) was planning to cut 10% of the workforce, the company came out on February 6 with the announcement of a  major reorganization . The Canadian cannabis company has finally made a move to rationalize the business with the market realities, but the cuts are so massive that my  investment thesis  is still on hold due to the risks of meeting updated loan covenants and limited cash balances to execute a complicated corporate pivot. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclai...

Aurora Cannabis is attempting to sell a facility once planned to produce 105,000 kg of cannabis. The major Canadian cannabis stocks don't trade at distressed levels. The stock has a legitimate reason for trading at $1 per share or 2x FY21 sales estimates. My constant warning on Aurora Cannabis ( ACB ) has been the risks associated with the stock still trading on elevated expectations. Despite large declines, most of the Canadian cannabis stocks don't trade at distressed levels. The stock could very easily hit the  $1 price target  prescribed by Piper Sandler last week. Read the full article on Seeking Alpha.  Disclosure: No position. Please review the disclaimer page for more details. 

Aurora Cannabis still has a long road to reach profitability. Without cutting costs, the company has to grow quarterly revenues by over $50 million while hitting 60% gross margins. The departure of the Chief Corporate Officer is another red flag and could indicate a planned restructuring in the works. Avoid the stock until Aurora Cannabis can improve the profit picture. Over the last week,  Aurora Cannabis  (NYSE: ACB ) has seen a couple of key persons flee the company. The lack of a catalyst from Cannabis 2.0 products has to question the profitability picture of the Canadian cannabis LP in 2020 and beyond reinforcing my  negative investment thesis . Read the full article on Seeking Alpha.  Disclosure: No positions mentioned. Please review the disclaimer page for more details. 

Ontario finally plans to allow new cannabis retail stores, but the 2020 target is far below industry hopes. Cannabis 2.0 rollout appears disappointing in part due to lack of Ontario retail stores until mid-2020. The $3 billion stock price remains expensive with capital needs while facing more industry delays. Just when the Canadian cannabis sector appeared headed towards a couple of major catalysts in 2020, the sector has again been sabotaged by the governments inability to license new stores or break the illegal market. My  investment thesis  was looking for a chance to turn bullish on  Aurora Cannabis  ( ACB ), but the company remains in a tough financial situation until catalysts kick in later into 2020. Read the full article on Seeking Alpha.  Update - December 23, 2019 Not surprising with all of the Cannabis 2.0 delays, Aurora Cannabis hit a new low today. The stock needs to test the sub-$2 range and once coming out the other ...

Stocks to watch on Wednesday: Aurora Cannabis (ACB) - the large Canadian cannabis company opened an 11K square foot store in Edmonton. The stock is up 4% on the news and further signals that momentum traders have not left the stock. Aurora Cannabis is not ready to rally until the stock doesn't surge on immaterial news. More research: Aurora Cannabis Needs Industry Help Under Armour (UA, UAA) - the athletic retailer is up 5% today as Raymond James slaps a $30 price target on the stock. As predicted here, the accounting probe fears were being over played. The real issue was bad sales practices. The stock remains a huge buy under $20 here and on any breakout above the recent resistance below $22. Ambarella (AMBA) - the chip stock trades at 10x sales despite revenues only growing 10% after a couple of weak years. Ambarella appears headed for a new downtrend as the hype from the CV chips starts to disappear. Disclosure: Long UA.  Read the full disclaimer page for more...

The Canadian cannabis industry forecasts cutting cultivation capacity by up to 800,000 kg, but the top 10 producers are still expanding existing production. Aurora Cannabis still expects to more than double production from FQ1 levels while the top 10 producers are still on path to swamp legal demand. Revenue estimates are getting to levels where the company would need to see further material price cuts to not exceed targets. The stock price target is $2 without further Canadian cannabis industry rationalization. The major problems facing  Aurora Cannabis  ( ACB ) is that too much of the Canadian cannabis industry hasn't followed their moves with cutting cultivation capacity for 2020 and beyond. A few companies had already cut production targets for various reasons, but the bigger players in the industry still appear full speed ahead with expansion while the industry is already over supplied. For this reason, my  investment thesis  thinks Aurora Cannab...

Stocks to watch on Monday for the shortened Thanksgiving week: Glu Mobile (GLUU) - the market cap is down to $750 million with the stock down to nearly $5. The valuation remains as compelling as the chart from earlier in November. Glu Mobile is an absolute bargain whether or not Disney Sorcerer's Arena is a hit in Q1 or not. Aurora Cannabis (ACB) - the conversion of substantially all of a C$230 million convertible debt was a positive move for the company. The stock will suffer in the short term as these new shareholders have no restrictions on dumping the stock. Aurora Cannabis will need more cash to fund operating losses. As the company resolves some more of their funding issues and 2020 catalysts kick into full force, the stock will become a buy when the stock reaches $2. AMD (AMD) - new Ryzen Threadripper chips are just another reason to own AMD on the path to $50 and possibly much higher. The chip company is only starting the process of taking market share from ...

Stocks to watch on Tuesday: Aurora Cannabis (ACB) - the stock is headed towards $2 and fast. The cannabis stock has plenty of support around this level, but investors should be careful trying to catch a falling knife.  The stock valuation reaches $2.4 billion, but a lot depends on the amount of dilutive financing needed to fund ongoing operating losses. Kohl's (KSS) - the department store retailer had a mixed report with decent revenues while cutting EPS estimates due to extra costs. The dividend yield is a ridiculous 5.6% after this dip. The stock is now testing the lows from the summer sell off. Slack (WORK) - my previous research questioned valued above $17.50 and the news about top competitor Microsoft (MSFT) adding millions of new Team subs is highly concerning. Previous research: Slack: Wheels Just Fell Off Disclosure: Long KSS. Please read the disclaimer page for more details. 

Aurora Cannabis reported a horrible FQ1 quarter. The cannabis company made a smart decision to raise cash and cut capital spending by C$190 million. Cash remains a major problem requiring likely shareholder dilution to fund ongoing negative cash flows. The stock's market value at $3.4 billion is still high, but the company does have catalysts in 2020 positioning a near-term pivot to a bullish view. For the last year, the Canadian cannabis space was obviously headed to an oversupply scenario, yet companies like  Aurora Cannabis  ( ACB ) famously charged forward with more facilities. Along with the FQ1 report, the company finally  rationalized supply  to conserve cash. The move was very smart, but my  investment thesis  is still neutral on the stock due to the valuation while waiting for some bullish long-term themes to play out as the industry shakes out in the next few quarters. Read the full article on Seeking Alpha.  Update - No...

Stocks to watch on Monday: T-Mobile (TMUS) - CEO John Legere is stepping down May 1, 2020. The news is very negative for a wireless company that has thrived under his leadership. The stock needs to fall 10% to 20% before becoming an interesting investment without John as the CEO. Especially worrying is that the Sprint (S) deal isn't even done yet. The stock appears set for a new downtrend when $76 doesn't hold. AMD (AMD) - Cowen lifts the price target by $7 to $47. My research already lined out the path to $50 without meeting with CEO Lisa Su. The problem here is that investors needed to aggressively buy on the October dip to $28 and not this recent surge to $39. More research: AMD: Shift Up To The Next Level Aurora Cannabis (ACB) - the Canadian cannabis stock has broken below the downtrend. The valuation is starting to get appealing with several catalysts for the market to grow in 2020. The key is to let this trend play out and likely look for an entry point possi...

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  ( ACB )  corporate update . The stock has made an initial bounce off the recent lows below $4, but the  investment thesis  is still tilted towards a ...

Aurora Cannabis traded below $5 on Friday. Management is out of tune with market realities in the cannabis space. A move similar to Canopy Growth in the U.S. would signal a desperate company. The stock isn't likely to hold $5 with a market valuation of over 10x lowered FY20 revenues estimates. The case for owning  Aurora Cannabis  ( ACB ) at $5 turned weaker following  FQ4 results . The stock traded below this key price target on Friday and the MKM Partners  Sell call  is unfortunately correct based on the numbers and the commentary from management. My previous  investment thesis  called for supply rationalization to make the stock a Buy at $5 and the company has gone further over the edge into global production growth. Read the full article on Seeking Alpha. Update - October 1 Aurora Cannabis breaks $4. No end in site so don't try to time the bottom here. Update - September 26 The approval of the SAFE Banking Act by the Ho...

Canadian cannabis industry inventories continue to surge with over 300K kg in supply and monthly demand below 10K kg. The industry needs to rationalize capacity with store forecasts of only 600 retail locations by the March quarter. A stock price of $5 and a market cap of ~$5.5 billion remain lofty for breakeven EBITDA and FY20 revenue targets of $521 million. The cannabis bulls continue to claim that a lack of retail stores and legal supply has kept sales low, while the data doesn't support the thesis. No doubt, sales will increase substantially as retail stores in Canada grow, but the market is headed to a major over supply scenario led by market leader  Aurora Cannabis  ( ACB ). My  previous research  had the stock approaching a potential buy point near $5, but the latest  Health Canada stats  for June have the industry at a critical inflection point that needs immediate action. Read the full article on Seeking Alpha.  More commen...

Aurora Cannabis reported solid FQ4 preliminary numbers including a move towards positive EBITDA. Health Canada data doesn't support these healthy numbers with industry inventory levels soaring. The company likely only sold 50% of inventory available for sale. The $7 billion market cap is not a relative value in the cannabis sector. Before the open on August 6,  Aurora Cannabis  ( ACB ) updated the market with a positive  pre-announcement  on FQ4 results for the period ending in June. Apparently, the company remains on track to positive adjusted EBITDA targets by reaching revenue growth not supported by Health Canada sales data. Investors are urged to remain cautious on the stock with mounting cannabis inventories in the Canadian market over shadowing short-term results. Read the full article on Seeking Alpha. More commentary - Out Fox The $street - August 7 Disclosure: No position mentioned. Please review the disclaimer page for more details....

Aurora Cannabis broke recent strong support above $7. The large cannabis player announced a new business model of growing cannabis at outdoor sites. The move combined with Canopy Growth news suggests the adjusted EBITDA positive target isn't maintainable. The stock appears poised to retest the $4s. With a couple of recent disasters in the Canadian cannabis sector,  Aurora Cannabis  ( ACB ) will likely return to the recent lows. The sentiment shift in the cannabis sector will impact all stocks and a subtle signal of a new business model is problematic. The  investment thesis  continues to tilt negative until a lot of the hype is stripped from the cannabis sector and the desire to add new production ends. Read the full article on Seeking Alpha.  More commentary on WhoTrades Disclosure: No position. Please review the disclaimer page for more details. 

The market wants to push Aurora Cannabis towards previous highs. Cowen placed a $10.50 target on the stock while the previous high of $12.50 is on the radar. The Canadian cannabis market is about to become flooded with legal supply as the illegal supply undercuts prices. The best projection is that weak prices causes Aurora Cannabis to miss revenue targets this year, ultimately crushing the stock towards year end. My  investment thesis  on  Aurora Cannabis  ( ACB ) has long held that the cannabis stock might have another rally left based on sector momentum. In the short term, the market cares more about price than fundamentals and a move above $8 has been a signal for another test of previous highs. A big analyst call sealed the likely rally in the stock. Updated 3/13 The hiring of Nelson Peltz doesn't signify anything, but Nelson getting richer per the huge option grant to him. Regardless, the stock was big buy for this break above $8. Option Gr...