Opinions
Brian Acker, CA
Aurora Cannabis
ACB-T
DON'T BUY
Jun 26, 2018
$9.430
Stock price when the opinion was issued
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DON'T BUY
He feels all cannabis stocks are gambling stocks. A maturing debenture is expected to keep downward pressure on the share price. There is no assurance that any existing company will be a survivor -- it is simply too early. No one is making money in this space. Without being able to predict revenues and expenses, it is too risky. He would stay away from these.
BUY
They each have their own strengths. He would pick Canopy (WEED-T) because they are the 800 lb gorilla. Aurora has lots of news about balance sheet challenges but they have low costs that he thinks will still come down further.
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He sees cannabis as no different from the Internet craze in the 1990’s. Between now and October, he expects all these stocks to crash. The equity market is fueling this industry. Enthusiasm is driving the price, not fundamentals. In October, valuation will start being driven by fundamentals and the fundamentals won’t support the prices. The group will go down and then a few survivors will rise, but we don’t which ones yet.