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For us, stock picking is in large part the hunt for the truly magnificent stocks. You won’t get it right every time, but when you do, the returns can be truly splendid. One such superstar is Aurora Cannabis Inc. (TSE:ACB), which saw its share price soar 2008% in three years. On top of that, the share price is up 13% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

Anyone who held for that rewarding ride would probably be keen to talk about it.

See our latest analysis for Aurora Cannabis

Because Aurora Cannabis is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years Aurora Cannabis saw its revenue grow at 107% per year. That’s well above most pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 176% per year, over the same period. It’s always tempting to take profits after a share price gain like that, but high-growth companies like Aurora Cannabis can sometimes sustain strong growth for many years. So we’d recommend you take a closer look at this one, or even put it on your watchlist.

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Aurora Cannabis stock, you should check out this free report showing analyst profit forecasts.

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. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. We note that Aurora Cannabis’s TSR, at 2088% is higher than its share price return of 2008%. 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

Pleasingly, Aurora Cannabis’s total shareholder return last year was 40%. But the three year TSR of 180% per year is even better. 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.

Aurora Cannabis is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.



If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.