The ACBFF stock is among the top trending stocks in the investment world.
One of the top stocks in marijuana segment, it is seeing a sharp rise in interest.
The legalization of marijuana in California is a major trigger.
But more than that, the thriving marijuana growth and business in Canada led to a renewed interest.
You have a phenomenal number of investors from across the world now.
Of course there are some select stocks that have seen significantly higher demand than the rest.
The ACBFF stock is one such stupendous growth story.
It promises a good mix of fundamental strength and inorganic growth.
Needless to mention that investors have evinced quite a bit of interest in this stock
In the past few months, the ACBFF stock price has seen a significant upward movement.
In November 2017, it gained almost 80% in 6 days.
With a market cap of $4.28 billion, it is now one of the best stocks to play on marijuana.
The expansion plans by the company is also making users interested.
But the question that many have at this juncture is the valuation.
The concern is whether the ACBFF stock price showing signs of a stretch.
Are valuations close to danger zones?
Should investors look at booking profit now?
Most importantly, should investors but the ACBFF stock at current levels?
Now this is one of the most important questions.
This is because, any potential gain will be closely linked to the price that investors buy.
This is exactly the reason why determining a proper price point is important.
Moreover, investors need to get a clear idea about a potential dip.
For all of these you need an in depth analysis of the ACBFF stock price.
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ACBFF Stock: Company Insight
Probably the first thing that you must understand about the ACBFF stock is the company fundamentals.
The ACBFF stock or the Aurora Cannabis is based in Canada.
The company operates primarily from Vancouver.
They have two areas of specialization, distribution of Cannabis and Cannabis Oil.
So you can understand that the business thrust is primarily medicinal Cannabis.
They essentially sell marijuana to those patients who have the legal permission to take the medicines.
The most striking feature is that the company promises smooth and secure delivery.
The mobile app launched by Aurora Cannabis further smoothens the service.
It completely eases their operation module and makes them accessible to patients.
No wonder they are one of the most rapidly growing Cannabis distributor in Canada.
In fact, keeping in mind the huge growth that they are also expanding operations.
Apart from Canada, the company now has a thriving presence in United States.
They have even spread their operation across Australia and Germany.
The list of their subsidiaries globally includes:
- Peloton Pharma in Canada
- Australis Capita in United States
- Pedanios GmbH in Germany
- Cann Group in Australia
Apart from these they have stake in many other Cannabis firms across US and Canada.
Radient Technologies and Larsenn along with H2 Bio are many such companies.
So apart from the distinct customer base of its own, they also capitalize on these customers.
Needless to mention that their individual manufacturing facility also increases Aurora’s area of operation.
Moreover, they help the company channelize its growth on two fronts.
On the one side they have strong fundamental and organic growth.
On the other hand, their acquisition spree ensures that their global presence increases.
Assessing Sales Growth For ACBFF Stock
When you assess the prospects of ACBFF stock price, you have to consider the sales potential.
It almost becomes imperative to understand the quality of sales and the extent to which it is growing.
A fair analysis of the overall customer base is also crucial in this context.
In just the first quarter of 2017, Aurora Cannabis registered over 8000 patients.
By the end of the financial year, the number of registered patients doubled.
In fact, according to September numbers by Aurora, the registered patients are close to 20,000.
Needless to mention that with this increase in customers, they increased the extent of sales.
The company has registered a steady rise in the per gram sales as well.
Along with it, the sale price for every gram of marijuana also increased.
The normal demand-supply matrix made sure that the cost of production decreased too.
Marketing costs too decreased with increased sales ratio.
In many ways, it also highlights the strong fundamentals of the business.
It highlighted how the company is growing its wings and learning to optimize value.
The higher growth numbers also address some extent of the earnings concerns.
Earnings across the marijuana space has been bordering close to stagnancy.
However, with the steady growth in per gram consumption, there is some redressal.
Moreover, there are some fundamental reasons too why the company is not generating adequate earnings.
It is investing a significant amount in financing acquisitions and expansions.
Of course, the gains from these initiatives will percolate eventually.
It is impossible to record these gains overnight.
In many ways these are investments that ensure better sustainability of earnings.
They will help business scale up smoothly going forward.
Moreover, this also factors in the relatively high marketing cost in the initial phase.
The Canada Factor
When you are analyzing the ACBFF stock price, Canadian prospects are crucial.
Canada is not just the home market for these company, it is also one of the biggest.
The good news is that this market still represents the scope for steady growth.
The chances are that this number will rise even further going forward.
This is because Canada is all set to legalise marijuana by July 2018.
This, no doubt will enhance the overall sales.
With more freedom in the usage, sale and distribution will become more dynamic.
Now, in this perspective, the expansion across Canada surely makes sense.
Its current facilities across Canada spreads over 55,000 square feet.
But the good news is they have more than 7 million square feet available for future expansion.
The low taxes and energy expenses is also seen as catalysts.
Despite expansion, these two factors will keep costs under control.
Moreover, the company is further expanding its operations across Canada.
They are in the middle of developing a 800,000 square feet area in Edmonton.
This facility is likely to reach its full potential by end of 2018.
This also coincides with the completion of the legalization process in Canada.
Needless to mention, this provides a further impetus to expansion.
The proximity of the airport is also seen as a key factor in keeping costs lower.
The total output from this facility is expected to reach 100,000 kg every year.
They are also developing a second unit in Quebec.
This is also a subsidiary of Aurora Cannabis and is named Peloton.
This particular facility is spread over 40,000 square feet and is designed to aid expansion.
Apart from these two, they are also growing inorganically.
There has been a significant increase in the number of acquisitions in Canada thus far.
Inorganic Expansion In Canada
Let us now analyse the overall acquisition prospects of this company.
It has been expanding operations and presence significantly across Canada.
CanvasRx is one of their most commendable acquisitions in the contry.
While Aurora’s specialty is production and distribution, this acquisition improves other prospects.
CanvasRX is known for its patient outreach experience and awareness programmes.
The connection with patients and long-term relation with doctors is also a crucial trigger.
This goes on to establish an aggressive edge to the overall production potential.
The takeover of Larssen and H2 Biopharma also helps in enhancing its overall efficiency.
The company managed to establish its proficiency in a series of opportunities with these.
Larssen specializes in greenhouse engineering and growth of potted plants.
It means that they optimize the production potential of this firm.
The H2 Biopharma also has a facility close to 50,000 square feet.
This is specifically design for marijuana production.
The other advantage of this facility is that it is close to Montreal airport.
As a result, distribution and transportation expenses are also controlled.
This has similar benefits to Aurora’s new facility that is coming up close to Edmonton.
So all in all, the company is successful in creating positive triggers for aggressive growth.
It has not just bet heavily on expansion, it has been done in a smooth and seamless manner.
Most of the takeover targets also have a huge locational advantage.
That helps in bringing down cost to a significant extent.
Moreover, most of these acquisitions help the ACBFF stock in creating a greater area expertise.
They are no longer just superior producers and distributors of marijuana.
The company is making significant inroads in achieving an all-round growth.
This is what the trigger for a superior future performance becomes.
The reason why the ACBFF stock reflects superior value is also because of the international presence.
The company is not just looking at active expansion in Canada.
It realizes that a constructive global presence is necessary as well for comprehensive growth.
This is why it is also increasing its global footprints through acquisition.
In May 2017, it took over German marijuana distributors, Pedanios.
They are wholesale importers and exporters of medicinal marijuana.
Needless to mention, it makes them a potentially strong growth driver for the company.
In fact, Pedanios is one of Germany’s biggest distributors.
They distribute to over 1500 pharmacies and leverage the EU for widespread sales.
Steady growth in their sales numbers is seen as a major positive.
Moreover it is expected to catapult Aurora Cannabis to the net level of growth.
The idea is that it will helps establish the ACBFF stock as a strong player in the EU region.
Aurora’s other major international acquisition is Australia’s Cann Group.
The marijuana major has close to 23% stake in this company.
This is an Australian distributing major.
Additionally, it also has the license to grow and research Marijuana in Australia.
Therefore, they can easily help Aurora establish firm foothold in the Australian market.
It also braces them strongly for the next level of boom in the Marijuana market.
Cann’s already strong presence in Australia will give them the time advantage to reap rich benefits.
Apart from this the company also has significant presence across United States.
The big advantage of most of these facilities is the way it enhances their global foothold.
The regulatory nods from different countries across the world is set to boost demand.
But Aurora’s with its massive and aggressive acquisitions is poised to handle this boom.
Distinct Advantage Over Competition
When you undertake an ACBFF stock price analysis, a mention about competition is inevitable.
In fact, one of the key points to consider is how they are poised to take over Canopy as market leader.
In fact the ACBFF stock has many advantages over its competition.
This is what is likely to channelize the future growth.
From production to sales to connect, it is making distinct progress in the overall game plan.
It is not just poised to take on the growing demand in Canada or US.
The company is targeting a bigger growth prospect.
It is poised to become a major player on a global basis.
The unique mobile application allows it’s a distinct leverage over others.
It enhances the patient outreach facility and creates a better connectivity model.
Most importantly this mobile application is a first of its kind in terms of distributing medicinal marijuana.
Needless to mention that this enhances the customer base in a significant manner.
It is running a close second to Canopy Growth in terms of absolute market growth.
The progress in the direct retail sales and the big boost in production is likely to catapult it forward.
Moreover, once its two facilities are completed, the average production will rise significantly too.
That means, the cost of production will also reduce to a large extent.
To top it, the company is also expected to benefit from legalization of marijuana sales globally.
The ACBFF Valuation Matrix
The valuation matrix of the ACBFF stock is the other important trigger.
When you compare the price to book valuation of this company with its peers, you can analyse the prospects better.
So do you consider the ACBFF stock overvalued or undervalued?
Well, if you add the price to earnings as well as the price to book ratio, ACBFF stock has a 9.91 valuation.
Canopy growth in comparison has 4.87 reading and Aphria is 6.67.
So does it make Aurora Cannabis an expensive stock to buy at current levels?
Well, it is no doubt overvalued at current levels.
But it also signifies that the stock is set for a correction.
The good news is you can buy the stock at a discounted rate to take advantage of future growth.
Demand for medicinal marijuana is on the rise.
The greater production capacity undeniably makes it a force to reckon with.
That is what makes it imperative to watch the stock’s movement going forward.
The stock represents significant value in terms of the latent demand potential.
The hope is that may rationalize valuation.
One reason for that hope is also the overall brokerage views on the stock.
Most brokerages are Overweight on the stock.
They expect the prices to rise to $1 level.
Needless to mention this is significantly above the 52-week high prices too.
The Median PE estimates for the next financial year is also encouraging.
It goes on to highlight that the stock is going to clock substantial gains.
Moreover, the demand portfolio and the regulation climate is also encouraging.
That enhances the overall expectation that fundamentally the business is set to grow.
This means that the company will register significant customer growth and revenue rate going forward.
Therefore, we can conclude that the ACBFF stock price is no doubt overbought at current levels.
But at the same time it is due for correction.
Moreover, it is one of the best plays in the marijuana segment.
It is poised to take up demand and address higher sales in a significant manner.
Both in terms of organic and inorganic growth, the company is poised to take up the potential demand surge.
The sales figures and the steady rise in per gram sales is also seen as a major positive.
Therefore, the ACBFF Stock price indicates that you can wait for a correction but it is a definite buy.
If you want to capitalize on marijuana boom, you need to buy the ACBFF Stock.