Cannabis stocks are set for a strong rebound in 2020. After underperforming last year, stock prices now appear to have corrected and many of the best picks have momentum behind them. The ETFMG Alternative Harvest ETF, a major industry benchmark, is up almost 10% in the year to date. This suggests that confidence is growing. Now is the ideal time to take advantage of some bargain picks.
Aurora Cannabis Inc. (NYSE: ACB) is one that looks especially promising. Canada’s second-largest cannabis company is traded on the New York Stock Exchange, making it accessible for American investors.
Aurora has suffered in the market due to a poor balance sheet and low liquidity. This could turn around in 2020, thanks to planned openings of new stores, and the launch of new edible cannabis and vaping products. The company’s cash burn problem is starting to fade, and this could bring investors back in big numbers. Aurora’s revenue has grown dramatically in the last four fiscal years, from $1.44 million in 2016, up to $247.94 million at the end of 2019.
With a gross profit margin of -0.04%, this company is on the cusp of profitability. Growing demand for legal cannabis and legalization movements worldwide are increasing the addressable market for Aurora. Bargain investors who are willing to take on some risk will see value in this stock.
- 1 Year Price Growth: -67.04%
- YTD Price Growth: -5.56%
- 3 Month Price Growth: -44.41%
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.