Why I Just Bought Aurora Cannabis

On 4 September I bought 450 shares of Aurora Cannabis (ACB) @$8.91

It has taken a week to recover my purchase price as the stock starting to back up on me. Since mid August the stock has gained 350% but I have only gained a scant 1.7% or $71. It's only been a week but as you can see, this stock and sector are not for the faint of heart.

I'm just using ACB as a speculation to make some short term money. The main reason I chose ACB instead of all the others is that it has traded as high as $15.20 in the last 52 week period. All the others seem to be making new highs every day so who knows where they will be trading at.

I'm speculating here that ACB gets back to it's old high giving us an almost double from here. At least I know how high it could go because it's been there. The others are just very hard to gauge.

As I've sated before and it's important to remember in this weed stock euphoria. Many of these stocks have no earnings and are highly leveraged. ACB is one of them. They have acquired smaller producers and in doing so have taken on a lot of debt. I don't like that but right now the market is giving them a lift. As soon as momentum and volume start taking this stock down, I will sell and take profits. We will see how the market revises it's forecasts for ACB as we reach legalization on 17 October. Let's look at the current numbers;

Beta: -0.91

ROE: -2%

Forward P/E: 151.5

EPS Growth: -0.3%

Revenue: $41.9M, per share =0.10

Debt: $209M
Forward Dividend: 0.61%
Payout Ratio 10%

Price Paid: $8.91

52 week high: $15.20

Earnings are not yet keeping up with revenues. There is also a tremendous amount of paper out there as the company has had to dilute the shares buying companies and borrowing money. Almost a billion shares outstanding with Aurora. Another huge negative for a company not making any money. This is nothing but an outright gamble for me on the future of ACB.

If you buy this company like I did, keep an eye on it as a trading stock. This is not a long term hold for me. If it keeps going up on institutional interest until legalization I will keep holding. This is not investing, just a pure speculation as my blog name signifies. Let's hope the gamble goes my way and it starts to rise to the heights of Aphria and Canopy Growth.

I think it is worth the punt.

What I Like

• production up every quarter, currently over 233,000 pounds per
• acquired the largest medical marijuana producer in Europe last year
• intends to add oils to it's portfolio
• acquisition of MedReleaf improving earnings
• reports earnings for 3rd quarter on 25 September
• if beer company's keep looking, then ACB is a prime candidate for buyout
• the stock popped 10% yesterday on almost 30 million shares traded

With the introduction of Constellation Brands taking a 50% position in Canopy Growth you can bet other alcohol manufacturers will come looking for opportunity in this space. If and when that happens you can bet on some companies being taken out at huge premiums from here.

This is why they're called speculations. Only buy here with money you can afford to lose.

I NEVER SPECULATE WITH MY RETIREMENT MONEY. THIS IS ALL INVESTED IN DG STOCKS FOR INCOME

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Would you buy Aurora Cannabis or do you own it?