Out Fox The $treet

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...

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 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...

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 ...

Aurora Cannabis agrees to buyout distribution partner in Mexico after one business day. The company has now formed an extensive global distribution and partnership network at the cost of major shareholder dilution. A legitimate investor should question whether Mexicans will buy Canadian cannabis with readily available domestic supplies. Maintaining key support at $5.40 is crucial for owning this cannabis stock. When a company issues news seen as generally bullish by the investor community and the stock declines, investors should start asking more questions. Shareholders of   Aurora Cannabis   ( ACB ) find themselves in that situation with the stock trading down slightly on the news of buying the only licensed importer of medical cannabis in Mexico. The deal sounds too good to be true reinforcing my   investment thesis   of watching the price action in the stock for confirmation that a leader in the cannabis sector is headed in the right direction. R...

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 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....

In the much anticipated and long delayed Q4 earnings release, Canopy Growth (CGC) likely trades like a dude similar to Aurora Cannabis (ACB) . The company generated massive growth, but the opening up of the recreational cannabis market in Canada has as many questions as answers.

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 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. 

After the close, Aurora Cannabis ( ACB ) announced a proposed offering of $250 million convertible senior notes due 2034. Such an offering is a likely sign that Coca-Cola (KO) isn't offering the company a ton of cash to invest in their international cannabis expansion.

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 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...

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. 

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 (ACB) reported results after the close providing the first official view of Canadian cannabis companies following the legalization of adult-use cannabis on October 17. Updates from the earnings report, earnings call and after-market reactions will be continuously updated here.

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.

Article originally published to Out Fox members back on Oct. 5.  Aphria is a cheap Canadian cannabis stock up $1 since this call. Twitter remains favorite social media play. Sample research from  Out Fox The Street : Aphria ( OTC:APHA ) For a long time, Aphria was been a favorite amongst the Canadian cannabis LPs due to a cheaper valuation and stronger execution. Back on Sept. 24, the stock was  highlighted  as a better Canadian cannabis pick than  Aurora Cannabis  ( OTC:ACB ) when Aphria traded at $4.31. Aphria has gotten a big boost today with Cantor Fitzgerald hiking the price target by C$2.50 to C$15.50. The amount equates to $11.68 for a stock trading at only $4.41 before the market opened today. Some key points of the bullish call for the quarter ending August: Canadian Rec. revenue to grow 37% QoQ. Canadian Rec. EBITDA margins to top 20%. FQ1'20 revenues of C$171M. FQ1'20 EBITDA of C$16.3M. A big key to the quarterly results is the expectation o...

Aurora Cannabis was left out of the major deal making in 2018. The cannabis company updated FQ2 guidance to revenues of $50 to $55 million with a continued focus on pure production growth. The stock is down as the market is becoming less impressed with commodity farming operations due to the prime Oregon example. The stock is below key resistance at $5.40 as medical cannabis patient totals failed to impress. As the end of 2018 came and went,   Aurora Cannabis   ( ACB ) was a notable absentee from the deal making in the cannabis market. Just about all of the other major Canadian cannabis players got large investments or signed up powerful partnerships, but the related stocks didn't generally maintain rallies following the deals. Based on the early legalization data in Canada and Oregon, the best option for Aurora Cannabis might actually be selling production capacity while the Canadian market remains hot. Read the full article on Seeking Alpha.  Disc...

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 ...