There’s never a dull day in the cannabis market. The big news of the past week was the massive 9% decline in Aurora Cannabis Inc. (TSX & NYSE: ACB) after the company stated that it missed revenue expectations, even after trimming its forecast. While it might look like a rough tumble, it may not be as bad as it appears from a longer viewpoint.
After the Thursday drop erased two days worth of gains, ACB stock ended up not that much worse off at the end of the week than it was at the beginning.
(Aurora Cannabis Chart - Sept 9 - 13, click to enlarge.)
For day traders who bought Aurora stock right before the earnings report came out mid-week, this loss probably hurts a lot more. It was the big decliner for the week in the cannabis market, hitting lows down 8% to $7.76 (CAD).
Something this news also sheds light on is that Aurora's executives had indicated that the company was on track to achieve positive revenue, though they backed off on that sentiment in Wednesday’s release on lower earnings. Even so, investors had been excited about this news building up over the year, especially when fellow cannabis company Aphria Inc (TSX & NYSE: APHA) had already shown profitability. When Aurora said it would also be profitable, it captured just enough investor attention. Now the company admitted it will take more time and won’t be profitable as soon as expected. Investors want to see short term results and revenue with the cannabis market and Aurora’s distancing from any commitment to that now may see its shares trend even lower, but only time will tell.
Even so, the cannabis market continues to push forward and there are some other operators worth taking a look at.
Sunniva Inc (CSE: SNN) - Ended the week lower, but has been showing an upward trend from steep lows sustained last month. Its shares were hitting highs of almost $2, but lost ground August 14th when a massive spike of volume hit, but the stock is making a comeback ever since. SNN has had a good run in the meantime, up more than 100% over 90 cent lows.
Stillcanna Inc. (CSE: STIL) - This stock had a pretty healthy close to the week, up 12% while still being a bargain at 56 cents. It’s an obvious bounce and still remains to be seen if it can capitalize on this revival.
Also trading in the green - CBD pioneers Charlotte’s Web Holdings (CSE:CWEB).