Pot stocks are entering a crossroads right now as we delve deeper into March. After several months of consistent losses, investors are looking to find value in the industry. Some of the biggest marijuana stocks in the market such as Aurora Cannabis and Tilray, continue to be watched as markers of where the industry could be headed. But, these companies alone have shed off more than 10% of their values in the past month or so at the least. Because of this, cannabis stock investors are working out a new strategy for the rest of 2020.
The recent losses in the industry cannot be fully blamed on the cannabis market. Troubles with the global fears of Coronavirus plus other factors have contributed greatly to where we are today. But, the future still does look bright for the cannabis industry. There’s no doubt that the marijuana market will see a major amount of growth in the foreseeable future. But, it’s how we get there that is the most important right now. The focus currently seems to be on finding pot stocks that may be at value prices. Because of massive selloffs that have occurred in the past few months, many popular cannabis stocks are at bare bones prices. So for value investors, this means that there could be a new opportunity out there.
Pot Stock To Watch: The Case for Aurora Cannabis
Aurora Cannabis (ACB Stock Report) has been at the top of the cannabis market for quite some time. Only a year ago Aurora Cannabis looked like it would remain as the frontrunner in the industry due to its sheer size and production capabilities. But, as the cannabis market hit a rough patch moving into September of 2019, so did Aurora. One of the main strategies that Aurora has since abandoned, was one of the mass acquisitions. The company quickly began spending its free-flowing cash, buying up other companies as a way to grow its business.
The result, however, has been a large decline in its balance sheet. In addition to this, the company is facing a possible delisting from the NYSE as it hovers right above the $1 mark. Because of this, Aurora Cannabis may have to implement a reverse split method to ensure it remains above the NYSE threshold. If Aurora is able to get its free-flowing cash in order, there’s no telling how far it could go in the next few years. For now, however, Aurora remains a pot stock to watch, but maybe from afar.
Where Does This Pot Stock Stand In The Market?
Tilray (TLRY Stock Report) is also considered to be one of the behemoths of the industry. The company recently released its fourth-quarter results as well as its 12-month financial report for the 2019 year. As expected, the report consisted of quite a lot of losses that it has sustained over that time period. It did report a rise in revenue of almost 300% during 2019 to as much as $167 million.
But, its losses were put in at around $321 million for the same time period. Because of this, investors see Tilray continuing to be unprofitable for the foreseeable future. But, the company does remain as one of the largest in the industry which has to be worth something. The hopes are that as the industry moves toward hitting its projected milestones, Tilray can begin to see some major growth. For now, it does look like that could be some time away.