The bullish sentiment in the cannabis market has cooled, but there are still strong picks available for investors who are willing to play the long game. Aurora Cannabis (NYSE: ACB) is often cited as a top bargain stock in its sector, but it has recently seen downgrades from some major analysts. What makes this stock exciting despite the weakening of interest at an institutional level?
The key to this stock is its engagement in the medical cannabis industry. It achieves a near 50/50 split of sales between legal recreational and medical cannabis products. In most major markets, like the U.S., medical cannabis makes up only 20% of the total market. This makes Aurora unique, and it’s a good sign for investors who believe in the potential of cannabis as a supportive medical treatment. Total revenue increased over 1155% in 2017 and 205% in 2018, indicating that this is one of the best cannabis companies as far as raw growth is concerned.
Aurora is continuing to expand its international presence, which is particularly important as more governments move to legalize medical cannabis. It now operates in more than 24 countries, giving it a strong foothold for what many believe to be an inevitable global cannabis boom.
It could take two years or even more for Aurora to see a return on its international expansion, but the potential is there for investors who are willing to wait. Stock is close to its January low today, which makes it a relative bargain considering that it currently has an average analyst target price of $12.57.
- 1 Year Price Growth: -20.94%
- YTD Price Growth: 30%
- 3 Month Price Growth: -31.40%
All information is based on current and historical market data, as well as publicly available financial data. As with any financial decision, your own research is important. Stock market outcomes can never be 100% accurately predicted. Familiarity with historical data, individual industries, and individual stocks is key to developing a robust portfolio. Note that stock prices can fluctuate rapidly during trading sessions.