Aurora Cannabis Inc. (NYSE:ACB) shares are up more than 31.85% this year and recently decreased -1.51% or -$0.1 to settle at $6.54. Alkermes plc (NASDAQ:ALKS), on the other hand, is down -24.81% year to date as of 08/10/2019. It currently trades at $22.19 and has returned -0.49% during the past week.

Aurora Cannabis Inc. (NYSE:ACB) and Alkermes plc (NASDAQ:ALKS) are the two most active stocks in the Drug Manufacturers – Other industry based on today’s trading volumes. The market is clearly enthusiastic about both these stocks, but which is the better investment? To answer this, we will compare the two companies based on the strength of their growth, profitability, risk, returns, valuation, analyst recommendations, and insider trends.

**Growth**

Companies that can consistently grow earnings at a high compound rate usually have the greatest potential to create value for shareholders in the long-run. Comparatively, ALKS is expected to grow at a 0.92% annual rate. All else equal, ALKS’s higher growth rate would imply a greater potential for capital appreciation.

**Cash Flow**

The value of a stock is simply the present value of its future free cash flows. ACB’s free cash flow (“FCF”) per share for the trailing twelve months was -0.15. Comparatively, ALKS’s free cash flow per share was -0.22. On a percent-of-sales basis, ACB’s free cash flow was -0.35% while ALKS converted -3.16% of its revenues into cash flow. This means that, for a given level of sales, ACB is able to generate more free cash flow for investors.

**Valuation**

ACB trades at a P/B of 1.90, compared to a P/B of 3.19, and a P/S of 3.37 for ALKS. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

**Analyst Price Targets and Opinions**

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**When investing it’s crucial to distinguish between price and value. As Warren Buffet said, “price is what you pay, value is what you get”.

**Insider Activity and Investor Sentiment**

Short interest, or the percentage of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment. ACB has a short ratio of 6.89 compared to a short interest of 3.57 for ALKS. This implies that the market is currently less bearish on the outlook for ALKS.

**Summary**

Aurora Cannabis Inc. (NYSE:ACB) beats Alkermes plc (NASDAQ:ALKS) on a total of 8 of the 13 factors compared between the two stocks. ACB generates a higher return on investment, has higher cash flow per share, has a higher cash conversion rate and has lower financial risk. In terms of valuation, ACB is the cheaper of the two stocks on book value and sales basis,

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