There are many bargains out there right now but Aurora Cannabis (Aurora Cannabis Stock Quote, Chart, News TSX:ACB) is not one of them. So says Brian Acker of investment firm Acker Finlay.
Acker appeared (from home) on BNN Bloomberg’s “Market Call” program today and fielded a call on onetime market darling Aurora. His answer to whether or not the beaten down stock was no a buy was a resounding no.
“I wouldn’t buy it here,” Acker said. “As, individuals, no, we haven’t touched these cannabis stocks. You know, at the height of it, they were worth 100 billion dollars of market cap. Now they’re worth a fraction of that. And it’s the earnings, they just aren’t there for a lot of them. So, look, this is the opportunity. You can buy good quality Canadian and US stocks at discounts to book value. Why would you look at a piece of crap like this, really? So forget Aurora, there’s so many other good things out there to look at and buy and make money on with a hell of a lot less risk than this one. So forget about it move on. This is an opportunity of really upgrading the quality of your portfolio and. And that’s what you should do.”
Shares of Aurora Cannabis have been falling for a year, cut from a 2019 peak of more than thirteen dollars to recent lows below a dollar.
On March 16, former CEO Terry Booth filed a report on the System for Electronic Disclosure by Insiders (SEDI) regarding his sale of approximately 12,161,900 shares into the open market.
“The board and management remain focused on the plan we laid out in February and we are progressing as planned toward appropriate capital allocation, balance sheet strength, and profitability. We look forward to updating the markets on our next quarterly earnings call,” executive chairman and interim chief executive officer Michael Singer said of the news.
A recent piece in Yahoo Finance suggested there may be at least a bit of silver lining for ACB, however. An unbylined article noted increased demand in the wake of the coronavirus pandemic and the company’s unique ability to facilitate it.
“The global economic shutdown due to the coronavirus was a potential nightmare for Aurora Cannabis (ACB),” the piece read. “The Canadian cannabis company is in the middle of cutting capacity and costs for the new reality in the market while trying to avoid running out of cash. A complete shutdown of cannabis stores would’ve crushed any remaining hope in financial improvements at the business, but the market has seen the opposite effect of the shutdown actually lead to a boost to cannabis sales as consumers stay at home.”
At press time, shares of Aurora Cannabis on the TSX were down 12.3 per cent to $1.28.