If You Had Bought Aurora Cannabis (TSE:ACB) Stock A Year Ago, You'd Be Sitting On A 57% Loss, Today

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Investing in stocks comes with the risk that the share price will fall. And unfortunately for Aurora Cannabis Inc. (TSE:ACB) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 57% in that time. The silver lining (for longer term investors) is that the stock is still 32% higher than it was three years ago. Furthermore, it’s down 53% in about a quarter. That’s not much fun for holders.” data-reactid=”18″>Investing in stocks comes with the risk that the share price will fall. And unfortunately for Aurora Cannabis Inc. (TSE:ACB) shareholders, the stock is a lot lower today than it was a year ago. To wit the share price is down 57% in that time. The silver lining (for longer term investors) is that the stock is still 32% higher than it was three years ago. Furthermore, it’s down 53% in about a quarter. That’s not much fun for holders.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" See our latest analysis for Aurora Cannabis ” data-reactid=”19″>See our latest analysis for Aurora Cannabis

Aurora Cannabis wasn’t profitable in the last twelve months, it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Aurora Cannabis saw its revenue grow by 283%. That’s well above most other pre-profit companies. In contrast the share price is down 57% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. Generally speaking investors would consider a stock like this less risky once it turns a profit. But when do you think that will happen?

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free report showing analyst forecasts should help you form a view on Aurora Cannabis” data-reactid=”35″>It’s probably worth noting we’ve seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free report showing analyst forecasts should help you form a view on Aurora Cannabis

What about the Total Shareholder Return (TSR)?

Investors should note that there’s a difference between Aurora Cannabis’s total shareholder return (TSR) and its share price change, which we’ve covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Aurora Cannabis’s TSR, at -57% is higher than its share price return of -57%. When you consider it hasn’t been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Over the last year, Aurora Cannabis shareholders took a loss of 57%. In contrast the market gained about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 11% per year over three years. Sometimes when a good quality long term winner has a weak period, it's turns out to be an opportunity, but you really need to be sure that the quality is there. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.” data-reactid=”39″>Over the last year, Aurora Cannabis shareholders took a loss of 57%. In contrast the market gained about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Fortunately the longer term story is brighter, with total returns averaging about 11% per year over three years. Sometimes when a good quality long term winner has a weak period, it’s turns out to be an opportunity, but you really need to be sure that the quality is there. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Aurora Cannabis is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.” data-reactid=”40″>Aurora Cannabis is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.