Aurora Cannabis: Buy the Dip?
Investing guru Warren Buffett once said, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful." In the context of Aurora Cannabis' (NYSE: ACB) fall from grace, many investors are now applying Buffett's principle and wondering if they should buy the stock on its dip.
In the past two years, Aurora invested in facilities that would bring its total cannabis production capacity to over 625,000 kilograms (kg) per year to capitalize on the drug's legalization in Canada. Unfortunately, it turns out Canadian consumers never needed that much cannabis from Aurora. The business sold just 16,748 kg of marijuana in Q4 2020. As a result, shareholders began to abandon ship.
It's important for investors to remember that Buffett's premise is only foolproof when buying a great company at a reasonable price -- not buying a bad company on the cheap. Aurora could one of the companies in the latter category. Today, let's look at why Aurora is not a great investing option for the long term despite its potential near-term trading rebound.
Source Fool.com
