Aurora Cannabis Inc (OTCMKTS:ACBFF) has certainly started 2018 off with a bang. The company hit the newswires with several key new developments, and the stock took off, launching another 25% higher to kick off the year. While there were a few items addressed by management, the big statement was the company’s note that its operations in Canada and Germany have resulted in new record cash from operations.
As we have said on a number of occasions, there are two big measuring sticks for lasting success at the top of the heap in the cannabis patch right now: 1. Day-to-day cash from operations in a big way, and 2. the ability to diversify how that cash is put to use. Aurora, as we noted last time around, is the clear leader in the space in these two facets of the game. The company just announced that it now has cash plus marketable securities exceeding $500 million. That’s a half of a billion bucks it can immediately sink into new investments, including simple productive capacity.
Aurora Cannabis Inc (OTCMKTS:ACBFF) is a licensed producer of medical marijuana pursuant to the Marijuana for Medical Purposes Regulations and operates a 55,200 square foot expandable state-of-the-art production facility in Alberta, Canada.
ACBFF’s wholly-owned subsidiary, Australis Capital Inc., seeks to be an active participant in the U.S. Cannabis market. Aurora is trading on the Canadian Securities Exchange under the trading symbol “ACB”. The company is headquartered in Vancouver, Canada.
According to company’s materials, “Aurora’s wholly-owned subsidiary, Aurora Cannabis Enterprises Inc., is a licensed producer of medical cannabis pursuant to Health Canada’s Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The Company operates a 55,200 square foot, state-of-the-art production facility in Mountain View County, Alberta, is currently constructing a second 800,000 square foot production facility, known as “Aurora Sky”, at the Edmonton International Airport, and has acquired, and is undertaking completion of a third 40,000 square foot production facility in Pointe-Claire, Quebec, on Montreal’s West Island.
In addition, the Company holds approximately 9.6% of the issued shares (12.9% on a fully-diluted basis) in leading extraction technology company Radient Technologies Inc., based in Edmonton, and is in the process of completing an investment in Edmonton-based Hempco Food and Fiber for an ownership stake of up to 50.1%. Furthermore, Aurora is the cornerstone investor with a 19.9% stake in Cann Group Limited, the first Australian company licensed to conduct research on and cultivate medical cannabis. Aurora also owns Pedanios, a leading wholesale importer, exporter, and distributor of medical cannabis in the European Union (“EU”), based in Germany.”
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As noted above, Aurora has been perhaps our number one favorite play in the cannabis space over the past year. And today’s spate of new announcements only serves to highlight the main reasons why.
Now, one thing I will say here that runs counter to the celebratory feel of things: you wanted to be on board this one back when we first started to single it out last year. This is not the time to pound into the offer with a long-term investment. The company is taking a checkered flag victory lap with this press release. There’s everything here but an actual trophy. They are telling you to buy shares. That means it’s awfully likely the insiders are starting to diversify their own portfolios. In other words, this is the time to learn from why this was such a great stock over the past 6 months, and go looking for the next one.
That’s not to say: go short Aurora. This is still a strong looking play. But the share strength has been out of this world over the past year, and the insiders are clearly going to market. So, we are ready to start looking for a new favorite horse. For that, stay tuned.
Earning a current market cap value of $3522.5M, ACBFF has a significant war chest ($127.9M) of cash on the books, which stands against virtually no total current liabilities. ACBFF is pulling in trailing 12-month revenues of $23.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 168.6%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $ACBFF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $ACBFF, either long or short, and we have not been compensated for this article.