The shares of the top pot producer Aurora Cannabis (TSX:ACB)(NYSE:ACB) soared more than 15% on Tuesday on higher expectations of its quarterly earnings. However, it was again the same, old story from Aurora. It reported a weaker-than-expected revenues and posted one of the biggest losses in history.

Aurora Cannabis: Yet another disappointing quarter

For fiscal Q4 2020, Aurora Cannabis reported $72 million in revenues, a decline of more than 5% from the previous quarter. Its net loss jumped to $1.8 billion driven by goodwill writedowns and asset impairment charges. The company reported $2.9 billion in impairment charges in the entire fiscal year 2020.

The recent gains of the top pot stock might evaporate, given Aurora’s disappointing results. Once investors’ favourite, Aurora Cannabis stock has lost almost 70% so far this year.

The company management expects $62 million in revenues for Q1 2021, lower compared to the recently reported quarter. According to management guidance, Aurora Cannabis was expected to turn EBITDA positive by Q1 2021. However, now the target has been pushed back by a quarter. On the net income front, Aurora has reported a loss for the last seven straight quarters.

Aurora announced the closure of several production facilities in June in order to increase efficiency. It currently operates an annual production capacity of 142,000 kg per year.

Aurora Cannabis was successful in lowering its production costs during the fiscal fourth quarter. It spent around $0.89 to produce a gram of cannabis, lower from $1.22 per gram in the earlier quarter.

Concern for investors

Too many players amid lower-than-expected demand have dominated the marijuana industry in the last few years. The industry once looked promising due to its steep growth prospects, but the industry as a whole has been on a decline lately.

Aurora Cannabis has some of the geographically diversified operations across the globe. However, its international sales have failed to pick up and continued to burn cash. Along with falling stock price, Aurora’s continued losses and declining revenue growth might bother investors. Additionally, a prolonged equity dilution will also be one of the major concerns for them.

A higher number of retail shops, along with an innovative recreational product range, should boost Aurora Cannabis’s sales. Product differentiation will be vital here, as many pot players are working on launching similar goods. Notably, top-line growth and consistent efforts on pruning operating costs will help the company reach breakeven.

Declining stock price

Aurora Cannabis still seems far from turning profitable. The top pot stock has dug a deep hole in investors’ pockets in the last few years. While Aurora stock has lost around 90%, cannabis stocks at large have lost approximately 55% in the last 12 months.

Aurora Cannabis is currently trading at a forward price-to-sales valuation multiple of four. This looks expensive against its average historical valuation as well as compared to peers. The stock will likely continue to trade volatile and could be a risky bet for conservative investors.

More reading

• Aurora Cannabis Q4 Earnings: Where Did Things Go Wrong?
• Aurora Cannabis (TSX:ACB): The Perfect 5-Year Contrarian Bet?
• Why Aurora Cannabis (TSX:ACB) Stock Gained 15% Yesterday
• TSX NEWS: Why These 2 Stocks Rose by Over 5% On Tuesday
• Is Aurora Cannabis (TSX:ACB) Stock a Buy Before Tuesday Earnings?

Fool contributor Vineet Kulkarni has no position in any of the stocks mentioned.

The post No Respite for Aurora Cannabis (TSX:ACB) Investors appeared first on The Motley Fool Canada.

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And once again the Futures are up.  

As you can see from the S&P chart, we have had some massive gaps up in the thinly traded open and then drifted down during real trading at the end of the day.  This is like someone who works for the auction house shouting "100 Million Dollars" on the first bid for a painting to make sure the other suckers in the audience start bidding higher.

In the case of the markets, the Banksters buy up the Futures on thin trading (so it's very cheap to do) and cause the Retail Suckers to pour in and chase the momentum so the Banksters can dump their stocks all day long during real volume trading.  This is how rich people exit the market - they create a buying atmosphere and they take their profits while poor people follow their advice - which doesn't actually apply to their own actions.  You see the big brokerage houses doing that all the time, exiting positions while their analysts are pumping the Tesla stock.

We had a good day yesterday shorting the Dow (/YM) Futures from our trade idea in the Morning Report and congratulations to all who played along.  Our morning call for our Members was:

So we're sticking with our strategy of shorting the indexes (which didn't work yesterday) as we're likely to be rejected here (Dow (/YM) 28,100, S&P (/ES) 3,405, Nasdaq (/NQ) 11,475 and Russell (/RTY) 1,550) and, as usual, we can just short the laggards, which would be /ES crossing below 3,400 and /YM confirming below 28,000 - we should catch a quick ride down but the Fed goes tomorrow and that should give the marketsupport until they are disappointed by that so tight stops above!

As you can see, this wasn't rocket science, the pivot points on the Dow were 28,014 and 27,795 and we simply allowed for the pre-market BS pump job and took a stab at shorting early but once we confirmed the move below 28,000, it was a no-brained to jump in for the 200-point drop on the Dow (at $5 per point, per contract!).  This morning we're back to 28,000 again but we have a Fed Meeting at 2pm so it's not a good day to play the futures - too volatile.

Speaking of volatile, 

IN PROGRESS

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• Futures and Options expiration week delivers pain for most global equity investors, strong gains for investors in IPOX Strategies. IPOX SPAC Index (SPAC) extends big run-up.
• IPOX 100 U.S. (ETF: FPX) adds +1.73% to +15.32% YTD. IPOX International (ETF: FPXI) rises +1.98% to +43.52% YTD. IPOX Europe (ETF: FPXE) adds +2.00% to +16.07% YTD.
• More U.S. deals lined up as IPO window open in Europe

Track the performance of U.S. SPACs live with the IPOX® SPAC Index (BBG: SPAC, Reuters: .SPAC): The liquid IPOX SPAC (SPAC) added +3.81% last week, to +19.31% since its 07/30 live launch, outperforming the S&P 500 (SPX) and Russell 2000 (RTY) anew. SPAC news include: 1) fleet electrification solution provider XL Fleet to merge with Pivotal Investment Corp II; 2) 9 SPACs launched last week and at least 12 new SPACs filings include Apollo sponsored Apollo Strategic Growth Capital; 3) Playboy Enterprises explores “going public” via SPAC merger.

Expiration week delivers pain for most global equity investors, strong gains for investors in IPOX. U.S. Futures and Options expiration left investors in the IPOX Strategies (ETFs: FPX, FPXI, FPXE) towards

the top of the weekly performance rankings, as U.S. equity risk declined (VIX: -3.87%), rates steadied, and large-cap U.S. technology stocks drifted anew (NDX: -1.36%). In the U.S., e.g., the broad-based IPOX 100 U.S. (ETF: FPX), benchmark for U.S. IPO and Spin-off performance, added +1.73% to +15.32% YTD, extending the YTD/YY lead vs. the S&P 500 (SPX) to +1257 (857) bps. Strength extended to markets abroad, with the IPOX International (ETF: FPXI) and IPOX Europe (ETF: FPXE) all rising. Strength in IPOX-tracked specialty exposure often untracked in the conventional portfolios drove the good showing, including Michael Jordan-backed SPAC IPOX 100 U.S. member (ETF: FPX) online entertainment services provider DraftKings (DKNG US: +33.60%), online collaborations platform operator Zoom Video (ZM US: +14.55%), Dutch Payment processor Adyen (ADYEN NA: +10.76%) and key Saudi Arabia’s health care services provider Dr. Sulaiman Al-Habib (SULAIMAN AB: +6.86%). Corporate Actions and seasonality pressured select names including security services firm ADT (ADT US: -20.07%) and outdoor products/services providers vehicle maker Camping World (CWH US: -12.72%) and cooler maker Yeti (YETI US: -8.68%).

* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOM0). Source: Bloomberg L.P. & Refinitiv/Thomson Reuters. For IPOX Alternative Strategies Returns, please contact [email protected]

IPO Deal-flow Review and Outlook: At least 26 firms IPO’d across the eligible global markets last week, with the average (median) equally-weighted deal adding +57.67% (+11.81%) based on the difference between the final offer price and respective Friday’s close. U.S. cloud data warehouse Snowflake (SNOW US: +100.00%), DevOps software developer JFrog (FROG US: +47.23%), game software company Unity (U US: +31.44%) and portable dialysis firm Outset Medical (OM: +122.26%) all surged on debut. Abroad, Canadian payment firm Nuvei (NVEI CN: +77.50%) and British e-commerce unicorn The Hut Group (THG LN: +18.40%) also recorded strong gains, while Kuwait stock exchange operator Boursa Kuwait (BOURSA KK: +939.00%) rose more than tenfold. While high-profile data analytics unicorn Palantir (PLTR US) pushed its Direct Listing to month-end, select key deals lined up include Silver Lake-backed telemedicine firm GoodRx (GDRX US), PE-backed motorhome maker Knaus Tabbert (KTA GR) and German defense supplier Hensoldt (5UH GR). Other IPO news include: 1) Macquarie prepares IPO for its data analytic company Nuix; 2) mortgage lender LoanDepot to revive IPO plan; 3) TikTok weighs U.S. IPO upon U.S. ban whereas its rival Kuaishou mulls $5B Hong Kong IPO; 4) more homecoming secondary offerings from U.S.-listed Chinese companies include Zai Lab, ZTO Express, Baozun, and Huazhu.

Track global deal flow live on: https://bit.ly/32zolmG

The post The IPOX® Week, September 21th, 2020 appeared first on Low Cost Stock & Options Trading | Advanced Online Stock Trading | Lightspeed |.

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