Cannabis remains a highly popular sector for younger investors. According to the free-stock trading app Robinhood, Aurora Cannabis Inc (NYSE: ACB) remains the most widely owned stock on its platform, a position it has held for over three months.
Coincidently, around 420,000 Robinhood users owned shares of the cannabis giant as of last week, which first took the top spot away from Apple on January 31. Since then, shares of Aurora have been the most-bought on the platform since then.
What has puzzled some is why Aurora, in particular, deserves this level of popularity from the millennial age group. Other cannabis companies are larger, such as Canopy Growth Corp (TSE: WEED)(NYSE: CGC) and are better positioned to take advantage of other upcoming markets, such as CBD-infused edibles thanks to major partnerships with alcohol producers.
Other companies like Cronos Group (NASDAQ: CRON) and Tilray Inc (NASDAQ: TLRY) have loftier valuations by traditional financial standards. Nor is Aurora Cannabis’ growth potential, while still large, significant enough to outclass smaller rivals like HEXO Corp (TSE: HEXO), which is one of many cannabis companies poised to exponential explode in the coming year or two. Aurora Cannabis might simply hold the position of the symbolic figurehead of the cannabis industry.
Vivien Azer, considered by many to be Wall Street’s top marijuana industry analyst, ended up picking Aurora Cannabis as her top choice for the industry earlier this year.
As summarized by one recent Yahoo Finance article, Aurora’s advantages come from really strong fundamentals in its business operations, including strong cultivation capacity growth, efficiencies of scale, high gross margins, as well as a slew of international partnerships and acquisitions cementing its position on a global scale as well as domestically.
The really are only a handful of problems for the company worth mentioning. For one, Aurora’s net margins remain negative, a problem that many other cannabis companies face.
Most analysts expect the marijuana giant to see profits sometime in 2020. Aurora’s other major problem is the lack of a significant partnership with an alcohol company to help develop CBD-infused beverages, a market that’s going to open up soon in Canada in October.
Shares of Aurora Cannabis didn’t really react to the news. While newsworthy, it’s not particularly surprising to analysts that cannabis stocks are more popular with younger investors.
Aurora’s stock price ended up staying roughly the same today, dipping less than half a percent. Shares of the cannabis giant have surged over 80 percent since the start of the year, outperforming other cannabis giants such as Cronos, which shot up only 45 percent in comparison.
Aurora Cannabis Company Profile
Aurora Cannabis Inc is a Canada-based company engaged in the production and distribution of medical cannabis.
The Company is vertically integrated and horizontally diversified across every key segment of the value chain, from facility engineering and design to cannabis breeding and genetics research, cannabis, and hemp production, derivatives, home cultivation, wholesale and retail distribution.
The Company’s purpose-built facilities which integrate technologies across all processes are defined by automation and customization. The Company has a funded capacity of more than 500,000 kilograms per year as well as sales and operations in 24 countries worldwide. – Warrior Trading News