The outperforming shares have added 51% year-to-date
Aurora Cannabis Inc (NYSE:ACB) is up 3.9% to trade at $7.50, after Cowen initiated coverage on the Canadian cannabis listing with an "outperform" rating and tapped it as its top pick in the weed sector. Analyst Vivien Azer thinks Aurora is well positioned to take advantage of Canada's adult-use marijuana market, and increase market share and profitability.
ACB stock tagged a record high of $8.62 on Oct. 23 -- its first day of trading on the New York Stock Exchange (NYSE). The shares eventually hit an all-time low of $4.58 on Dec. 24, but have rallied nearly 51% already in 2019. And while the equity pulled back last week, the dip was contained by its 30-day moving average.
The weed stock could benefit from a continued round of short covering. Short interest fell 13% in the last two reporting periods. However, the 72.08 million shares sold short still represents a healthy 7.8% of ACB's total available float.
Some of these shorts may be using long calls to hedge against upside risk, though. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 56,788 calls in the last 10 sessions, compared to just 5,263 puts. Put another way, ACB calls have outnumbered puts by a nearly 11-to-1 ratio in the last two weeks.