Aurora Cannabis (ACB) is expected to release its next earnings report next month. As September approaches the stock is trending downward.
(Chart courtesy of Investing.com)
After ACB last reported in May, investors were initially excited that the company was looking for a long- term CEO and reducing SG&A expenses and. However, the company has yet to announce a CEO and ACB’s cannabis industry peers have been reporting less than stellar earnings, which has weighed on the stock.
If ACB is going to recover, the company needs to accomplish a few things. First, the company needs to do what they promised and continue to reign in their SG&A expenses. Second, the company needs to appoint a new, full-time permanent CEO.
And third, total debt is an issue the company needs to remedy. The company has over $2 billion dollars in goodwill that needs to be written down. If ACB can continue to strengthen its balance sheet, the company will be much more attractive to new investors.
Overall, though I am a long-term investor in ACB, I believe that there are currently too many unknowns to recommend this stock for any short-term trades. Therefore, investors may want to wait it out on the sidelines until after the company reports earnings.
Disclosure: The author is long ACB
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ACB shares . Year-to-date, ACB has declined -61.42%, versus a 6.30% rise in the benchmark S&P 500 index during the same period.
About the Author: Aaron Missere
Aaron is an experienced investor who is also the CEO of Departures Capital. His primary focus is on the cannabis industry. He also hosts a weekly show on YouTube about marijuana stocks. Learn more about Aaron’s background, along with links to his most recent articles. More...
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