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The markets didn’t seem to know which way to turn this morning, as mixed economic data initially put the major indexes into the red before swinging back to the positive side.
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On the one hand, worldwide economic data looked troubling, with the eurozone’s composite PMI falling to 50.4 and Germany’s manufacturing purchasing managers’ index (PMI) at 41.4 — below the neutral level of 50 and expectations of 44. On the other hand, U.S. manufacturing data looked more promising. Its PMI rose to 51.
Aside from all this international news, what were readers interested in checking out?
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Aurora Stock Still Isn’t Cheap
Like it or not, Vince Martin is on the side of investors who believe Aurora Cannabis (NYSE:ACB) stock has further to fall.
He pointed out that the latest earnings wasn’t that bad on its face. Revenue up 52%. Net cannabis revenue up 61%. A loss on earnings, but a narrower one than in the previous quarter. But the report still disillusioned investors. Why?
In Martin’s words, “Aurora Cannabis missed expectations, and not just in terms of Wall Street. It missed its own revenue guidance. That guidance — preliminary results, actually — was given barely a month earlier and more than a month after the quarter ended.”
In a way, ACB stock is not helped by the breadth of its operations. It has its feelers in over two dozen countries. That complicates things for the company. As he wrote:
“It’s a difficult strategy, even if it makes sense in theory. But it’s a tough strategy in which to have confidence when the company can’t guide correctly a full five weeks after the end of a quarter.”
A Rough Ride for Roku Stock
Should you get out of Roku (NASDAQ:ROKU) stock as it continues its abrupt and somewhat stunning decline? Or should you get in after this massive sell-off? (We’re talking a stock that’s off 28% in the past five days.)
The answer, according to Nicolas Chahine, is that getting out depends on your time frame and getting in depends on how steely your fortitude is — as he puts it, ” this is not a stock for the faint of heart.”
It’s not like Roku is a bad company. Consider how it keeps the subscriber count growing. But it does seem to have gotten out ahead of its skis a bit, considering the exponential stock price growth. The fall has been fierce and may not be over yet, so use caution.
The company isn’t going anywhere, but as Chahine said of Roku stock, “This falling knife is scary as it could turn out to be a machete that is missing its handle. Meaning, it could cost those who try to catch it digits. It is best to let Roku stock hit the ground before reaching for it.”