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Aurora Cannabis stock edged higher on Thursday, following a bullish note from Cowen & Co. that applauded management’s competitive positioning of the company.

The back story. Even among the highflying marijuana stocks, Aurora (ACB) has been a stellar performer: The shares are up more than 83% since the start of 2019, and have risen 34.6% in the past 12 months.

Although the cannabis stocks are a volatile group, Aurora has seemingly moved from strength to strength. Analysts cheered its acquisition of Whistler Medical Marijuana at the start of the year, not to mention its earnings in February and news in March that Nelson Peltz joined the company as a strategic advisor.

Although the shares paused when Aurora said it would issue new debt earlier this month, investors quickly jumped back on the bandwagon, applauding its German medical cannabis distribution deal and bet on CBD oil. International agreements are often seen favorably for companies in the marijuana group, as they cut their teeth on navigating various legislation and investors wonder if the U.S. could legalize marijuana on a federal level, the way Canada did last year.

Branching out into adjacent products like CBD is also usually considered a good move to diversify revenue and potentially gain entree into new markets in the U.S. and abroad.

Wednesday, Bank of America Merrill Lynch named Aurora as one of three pot stocks to buy.

What’s new. Cowen analyst Vivien Azer reiterated an Outperform rating on Aurora Thursday after meeting with company executives. She writes that she came away feeling confident about Aurora’s strategy and ability to “produce a stable foundation” for growth.

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“As Aurora continues to ramp up supply, the company is establishing an even stronger leadership position in both capacity and profitability,” reiterating their intention to be positive in terms of earnings before interest, taxes, depreciation, and amortization in the fourth quarter of this fiscal year, she wrote.

Looking ahead. Azer writes that although the shares have already had a good run in 2019, the fundamentals point to more gains for Aurora “Even with scale opportunities ahead of them, Aurora is off to a good start, having delivered one of the highest gross margins among the leading Canadian licensed producers,” she writes, noting that in the trailing 12 months, Aurora delivered a 61% gross margin, well ahead of its peers.

For now, demand for cannabis may look artificially high, given supply issues, but ultimately she’s predicting “more meaningful growth in the second half of 2019,” for Aurora, particularly as it benefits from retail rollouts in areas like Ontario.

Like other analysts, she’s happy to see Aurora expanding internationally in places such as Germany, and moving ahead with new delivery forms like vaping. She said she was also happy to hear management say it won’t be rushed into U.S. markets for niche products like THC, which have the potential to cut into margins.

Aurora was up 0.4% to $8.99 in early trading.

Write to Teresa Rivas at teresa.rivas@barrons.com