Market High on Aurora Cannabis as Peltz Joins Pot Grower

Market High on Aurora Cannabis as Peltz Joins Pot Grower

Cannabis stocks have been on fire since last summer, and the buzz continued today as a major financier joined the industry.

Early leader Tilray (TLRY) might have fallen asleep after a blistering rally in September, but others have lit up more recently. Aurora Cannabis (ACB) glowed green today, ripping 12 percent to a five-month high.

The rally came after famed investor Nelson Peltz joined the pot grower as a strategic adviser. The CEO of Trian partners isn’t known for cannabis. But he has a history with major brands like Snapple, Wendy’s and Quaker Oats.

Peltz’s move came barely a week after Cowen initiated ACB with “outperform” rating. Analyst Vivien Azer said the company will “drive leadership” in the emerging industry. Her $14 price target is still 57 percent above the current $8.93 price.

Aurora Cannabis (ACB) chart with select indicators.

Aurora Cannabis (ACB) chart with select indicators.

ACB isn’t the only stock on the move. GW Pharmaceuticals (GWPH), a biotech developing cannabinoid prescription medicines, is about 18 percent in the last month. Strong earnings on February 26 drove the move.

Innovative Industrial Properties (IIPR), which rents out greenhouse space, has also climbed 17 percent.

Other well known companies in the space, like Cronos (CRON) and Canopy Growth (CGC), have gained about 8 percent in the last month. Those gains aren’t huge, but still well ahead of the broader S&P 500.

In conclusion, money keeps flowing into cannabis as the industry continues to gain mainstream acceptance.

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David Russell is Global Head of Market Strategy at TradeStation. Drawing on nearly two decades of experience as a financial journalist and analyst, his background includes equities, emerging markets, fixed-income and derivatives. He previously worked at Bloomberg News, CNBC and E*TRADE Financial. Russell systematically reviews countless global financial headlines and indicators in search of broad tradable trends that present opportunities repeatedly over time. Customers can expect him to keep them appraised of sector leadership, relative strength and the big stories – especially those overlooked by other commentators. He’s also a big fan of generating leverage with options to limit capital at risk.