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Bullboard - Stock Discussion Forum Auxly Cannabis Group Inc T.XLY

Alternate Symbol(s):  CBWTF

Auxly Cannabis Group Inc. is a Canada-based consumer packaged goods company in the cannabis products market. The Company is focused on developing, manufacturing and distributing branded cannabis products. The Company's brands include Parcel, Back Forty, Foray, Dosecann and Kolab Project. It provides various products, including vaporizers, edibles, dried flowers, pre-rolls, capsules and oils and... see more

TSX:XLY - Post Discussion

Auxly Cannabis Group Inc > Why the 3Q Investor Reaction
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Post by Investorpedia on Nov 17, 2021 12:24pm

Why the 3Q Investor Reaction

XLY has become an interesting turn-around story, and are on a nice path back to profitability. So why the negative reaction? So as an investor, I am thinking what can be the major disappointments.

First, large debt servicing is a big drag. 2nd, although they are increasing CDN market share, production limitations were a surprise. 3rd, no view for entry to US market. 4th, any hiccup to execution could lead to more share dilution, or increased debt.

Investor buy-in will depend fully on their confidence that the XLY ship will be kept steering in the right direction.

I for one, has a relatively high degree of confidence.
Comment by UniqueKitty on Nov 17, 2021 1:20pm
I see your points, 'Investorpedia.' What I'm seeing is more a lack of reaction. It doesn't help that the mj market sentiment remains in the toilet over all. The 'BUD BATH' continues.  But, let's kick it around anyway.  1. Auxly's largest debt bears a 4% interest rate. Find that elsewhere in the mj space. 2. Granted. Expected automation not ...more  
Comment by NLJigger1 on Nov 17, 2021 1:42pm
UniqueKitty I concur , just can't put messaging together llike you do. I'm equally confident about Auxly and the further of this company. We're back on track and gaing momentum. With all of the positive news it's a matter of time before the share price breaks free and heads Northward where it belongs. You can't hold a winner from moving forward and we are winners with Auxly ...more  
Comment by SCQuin on Nov 18, 2021 9:16am
Actually, the negative investor reaction was caused by the Q3 ER that shows Auxly is clearly losing momentum in the critical area of becoming cash-flow-positive. It seems now that investors will have to wait until the Q2 ER to see if this will even be possible in 2022. Someone in the company (the management team) needs to take responsibility for the fact they are not positioned to meet the demand ...more  
Comment by nortzy27 on Nov 18, 2021 10:02am
ur right quinn,this is a trade about 4 times a yr  ,everytime it looks good it lets all the faithful shareholders down,remember last friday when there was a huge drop end of day?well news had leaked i presume ,i market sold half of position right after reading news and there inability to lower ebitda,the company is good and will continue to monitor and look for a trade,and still hold a ...more  
Comment by Investorpedia on Nov 18, 2021 10:18am
Good for you Nortzy. Wish I had been as astute as you. They need to cut costs while increasing revenue... not an easy feat while at at near to maximum production capacity. Operating margins and production capacity must somehow be increased. No more predictions from me...it's a wait and see......
Comment by Oceanis on Nov 18, 2021 11:44am
Are you kidding me investorpedia, there no where near production capacity, they haven't even begun to be near their production capacity.  1.1million sq/ft. Greenhouse state of the art. As an "investor you should know that. What Auxly is doing is, optimizing the capacity output as needed according to supply/demand, while, tweating the quality of the output to premium standards ...more  
Comment by UniqueKitty on Nov 18, 2021 12:14pm
SCQuin, may think Auxly is near production capacity but Auxly CEO, Hugo Alves has a different take on things. Here a Hugo quote from the Q3 conference call; ..."I'm very happy to report that we finished the month of October with 7.3% share of overall market, and we did move into the number 5 spot.  And we're confident that we're going to continue to increase share over ...more  
Comment by SCQuin on Nov 18, 2021 12:47pm
Hugo said this "Our quarter could have been much better had we been able to fill all of the demand." 
Comment by Investorpedia on Nov 18, 2021 12:56pm
SCQuin, I could not have said it better.
Comment by UniqueKitty on Nov 18, 2021 2:13pm
With respect to up scaling flower and meeting pre-roll demand. This is not an overarching statement of the business at large. It's a specific problem with a series of available solutions.  Hugo continued in his intro with this; "we did encounter some operational challenges during the quarter, which negatively impacted our gross margin. Those challenges were related to ...more  
Comment by bull_runz on Nov 18, 2021 2:50pm
You got your 24...A C C U M U L A T E !!! :)
Comment by Investorpedia on Nov 18, 2021 12:53pm
Oceanis, 19% margins very low. Skew processing automation and cost reductions will be key. They can grow billions of bud if they want but the aforementioned is my focus and concern for now. Not to get me wrong, as I have previously posted, I have confidence that will prevail....XLY has executed a significant turn-around so far.
Comment by Oceanis on Nov 18, 2021 1:23pm
I thought your focus was Capacity? you said that they're "at, or near their capacity" did ya not, now it's margins? You can learn a lot from the people that have been here for a longtime investorpedia. This captain obvious play needs work.  Just sell your valens for a loss and buy Auxly on the cheap and be done with it!  You know you want too!  valens is over ...more  
Comment by UniqueKitty on Nov 18, 2021 10:39am
I presume, 'take responsibility' means; someone gets canned?  Pretty sure that already happened. The failure here falls squarely on the equipment manufacturer.It's not easy holding people outside of your own company accountable. It's outside of AUXLY's control.  That said, I'm pretty sure the recommendation of the manufacturer likely originated from ...more  
Comment by SCQuin on Nov 18, 2021 10:46am
Its called "risk management" something I am not good at given LONG position here...lol
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