Aurora Cannabis Added to S&P/TSX Composite Index

Aurora Cannabis Added to S&P/TSX Composite Index
A Technical Look into the Valuation For Aurora Cannabis Inc. (TSX:ACB)
Here we will take a look at several key ratios for Aurora Cannabis Inc. (TSX:ACB), starting with the Book to Market (BTM) ratio. Value investors seek stocks with high BTMs for their portfolios.  The ratio is a comparison of the firm’s net asset value per share to it’s current price.  This is helpful in determining how the market values the company compared to it’s actual worth.  The Book to Market value of Aurora Cannabis Inc. currently stands at 0.098867. 

In terms of EBITDA Yield, Aurora Cannabis Inc. (TSX:ACB) currently has a value of -0.003227. This value is derived by dividing EBITDA by Enterprise Value.

The research report from ArcView and BDS Analytics predict legal marijuana average sales growth of 28% in the next three year. Several U.S. states have already legalized cannabis industry, while Australia had recently legalized cannabis exports – it is the fourth country that legalized medicinal marijuana exports with the aim to capitalize on the projected $55B global market.

Aurora Cannabis Inc. (TSX:ACB) presently has a current ratio of 2.91. The current ratio, also known as the working capital ratio, is a liquidity ratio that displays the proportion of current assets of a business relative to the current liabilities. The ratio is simply calculated by dividing current liabilities by current assets. The ratio may be used to provide an idea of the ability of a certain company to pay back its liabilities with assets. Typically, the higher the current ratio the better, as the company may be more capable of paying back its obligations.

Aurora Cannabis Growth: Aurora Cannabis Inc (OTCQX: ACBFF) has been investing substantially in growth opportunities – the company is anticipating an increased demand in the next few years. The market trends are supporting Auroras enthusiasm in future fundamentals; the market reports suggest a high double-digit growth in Cannabis sales in the next three years.

The Price to book ratio is the current share price of a company divided by the book value per share.  The Price to Book ratio for Aurora Cannabis Inc. TSX:ACB is 10.114593.  A lower price to book ratio indicates that the stock might be undervalued.  Similarly, Price to cash flow ratio is another helpful ratio in determining a company’s value.  The Price to Cash Flow for Aurora Cannabis Inc. (TSX:ACB) is -392.894829.  This ratio is calculated by dividing the market value of a company by cash from operating activities.  Additionally, the price to earnings ratio is another popular way for analysts and investors to determine a company’s profitability.  The price to earnings ratio for Aurora Cannabis Inc. (TSX:ACB) is 840.396389. This ratio is found by taking the current share price and dividing by earnings per share.

North American Marijuana Index has posted remarkable gains since the start of second half of last year, thanks to traders increasing optimism and legalization of Cannabis from major countries. Cannabis Index has hit the highest level of 350 points at the beginning of the year from only 69 points at the start of the second half of last year.

Update: TSX Posts Modest Gains, Adding 26 Points, Paced by Cannabis Stocks, Stronger Crude Oil Prices

Looking at some ROIC (Return on Invested Capital) numbers, Aurora Cannabis Inc. (TSX:ACB)’s ROIC is -0.064374. The ROIC 5 year average is and the ROIC Quality ratio is . ROIC is a profitability ratio that measures the return that an investment generates for those providing capital. ROIC helps show how efficient a firm is at turning capital into profits. 

Aurora Cannabis share price rallied more than 350% in the last twelve months alone – with the 52-week trading range of $1.92 – $12.30. Aurora Cannabis shares are currently trading around $8.85, down from the 52-week high of $12.30 due to the threats to NAFTA agreement and potential tariffs from Donald Trump’s on Canadian imports.

Weekly Cannabis Report: Ontario And Canopy In The News

Free Cash Flow Growth (FCF Growth) is the free cash flow of the current year minus the free cash flow from the previous year, divided by last year’s free cash flow.  The FCF Growth of Aurora Cannabis Inc. (TSX:ACB) is .  Free cash flow (FCF) is the cash produced by the company minus capital expenditure.  This cash is what a company uses to meet its financial obligations, such as making payments on debt or to pay out dividends.  The Free Cash Flow Score (FCF Score) is a helpful tool in calculating the free cash flow growth with free cash flow stability – this gives investors the overall quality of the free cash flow.  The FCF Score of Aurora Cannabis Inc. (TSX:ACB) is .  Experts say the higher the value, the better, as it means that the free cash flow is high, or the variability of free cash flow is low or both.

“We are very pleased to have come to terms with CanniMed on this powerful strategic combination that will establish a best-in-class cannabis company with operations across Canada and around the world,” said Terry Booth, the chief executive officer of Aurora.

Cannabis Stocks Take A Hit In February

The Gross Margin Score is calculated by looking at the Gross Margin and the overall stability of the company over the course of 8 years.  The score is a number between one and one hundred (1 being best and 100 being the worst).  The Gross Margin Score of Aurora Cannabis Inc. (TSX:ACB) is 50.00000.  The more stable the company, the lower the score.  If a company is less stable over the course of time, they will have a higher score.

Before Australia, Uruguay, Canada, and the Netherlands had legalized medicinal cannabis exports, while several other countries are planning to take major steps for expanding their footprints in the marijuana industry.

At the time of writing, Aurora Cannabis Inc. (TSX:ACB) has a Piotroski F-Score of 4. The F-Score may help discover companies with strengthening balance sheets. The score may also be used to spot the weak performers. Joseph Piotroski developed the F-Score which employs nine different variables based on the company financial statement. A single point is assigned to each test that a stock passes. Typically, a stock scoring an 8 or 9 would be seen as strong. On the other end, a stock with a score from 0-2 would be viewed as weak.

Aurora Cannabis announced its acquisition of CanniMed Therapeutics (OTC: CMMDF +17.6%) for C$1.1B – the acquisition will allow Aurora to expand its market share in the global cannabis industry.

Aurora Cannabis Inc. Investors: More Dilution Is Ahead

Shifting gears, we can see that Aurora Cannabis Inc. (TSX:ACB) has a Q.i. Value of 62.00000. The Q.i. Value ranks companies using four ratios. These ratios consist of EBITDA Yield, FCF Yield, Liquidity, and Earnings Yield. The purpose of the Q.i. Value is to help identify companies that are the most undervalued. Typically, the lower the value, the more undervalued the company tends to be.

Watching some historical volatility numbers on shares of Aurora Cannabis Inc. (TSX:ACB), we can see that the 12 month volatility is presently 98.036400. The 6 month volatility is 107.476300, and the 3 month is spotted at 118.514300. Following volatility data can help measure how much the stock price has fluctuated over the specified time period. Although past volatility action may help project future stock volatility, it may also be vastly different when taking into account other factors that may be driving price action during the measured time period. 

Sector wise on the TSX, healthcare led the way as cannabis stocks rose. Materials were also stronger despite weaker gold and silver prices . Energy also lost ground even as crude oil prices shed 1.1%. Financials were modestly weaker.

In stock news, Cara Operations (CARA.TO) jumped more than 12% as same store sales rose, the restaurant company raised its divided and received an upgrade from BMO. Valeant Pharmaceuticals (VRX.TO) added 1% following its debt offering, while Barrick Gold (ABX.TO) gained 3% following an analyst upgrade. Heavily traded Aurora Cannabis (ACB.TO) rose 2.5% while Canopy Growth (WEED.TO) gained nearly 5%.

There were no economic reports in Canada today. On Tuesday, Bank of Canada Governor Poloz speaks on “Todays labour market and the future of work.” The text of his prepared speech will be available 10:15am ET on Tuesday. The governor will hold a press conference at 11:45am ET. The data and events calendar shifts to the slow lane this week after the busy docket seen last week. Manufacturing shipments (Friday) are expected to fall 1.0% in January (m/m) after the 0.3% dip in December, driven by the 2.1% tumble in export values revealed in the January trade report. Q4 net worth (Thursday) will be closely watched, as the report contains the debt-to-disposable income ratio. The ratio saw a record high 171.1% in Q3, and could move even higher in Q4 to underpin the elevated degree of sensitivity household have to higher interest rates. The report should underpin the BoCs go-slow approach to policy normalization. February existing home sales are due Thursday. The Teranet/National Bank HPI for February is scheduled for Wednesday. International securities transactions for January are out Friday. Meanwhile, Canadians collective household debt was up 6% in the fourth quarter of last year from the same period in 2016. Equifax Canada says Canadian consumers now owe more than $1.82 trillion, including mortgages.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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