Out Fox The $treet

Stocks to watch on the last day of 2019: AMD (AMD) - Rosenblatt raises the price target for the chip stock to $65. Analyst Hans Mosesmann has a similar view on the stock as Stone Fox Capital. The stock remains extended as 2019 comes to close. Investors will want to look for a pullback to start 2020 after the massive year end rally. Cronos Group (CRON) - pot stocks are seeing a big rally to end 2019. Cronos Group is up 17%, but the move just appears a dead cat rally. Don't chase any of the Canadian cannabis stocks higher. Disclosure: No position. Please review the disclaimer page for more details. 

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...

Despite all the excitement over cannabis stocks, the sector has generally traded flat since mid-September. My research has consistently shown that the industry can too easily add supplies to meet and actually far exceed market demand.

Aurora Cannabis is now down 55% from the highs around $12.50. The market cap remains a large $5 billion despite the company only reporting pro-forma quarterly revenues of $35.6 million. The stock is oversold and back to strong support at $5.40. Any further weakness in the face of surging demand and reports of beverage and tobacco industry interest would a huge negative signal. The best time to get into a market like the previously hot cannabis sector is after the related stocks are beaten down. Such is the case for  Aurora Cannabis  ( ACB ) now down over 55% from the double top at $12.50. As more and more areas legalize medical or recreational cannabis use, the market opportunity will only grow exponentially. The market dynamics of the cannabis sector are complex and the stock valuations are still stretched so the best way to derive the right valuation for Aurora Cannabis is the strong support at the current price. Read the full article on Seeking Alpha....