Over the past 2 weeks, I have analyzed each of the 13 stocks in the American Cannabis MSOs Index in 3 separate articles:

• how stable a company is financially based on its Altman-Z Scores and its corresponding percentage chance of encountering financial stress - even going bankrupt - within the next 2 years,
• whether, or not, the company has a positive operational cash flow (read here),
• the extent to which a company is
  • growing its operating cash flow margin.
  • growing its earnings before interest, taxes, depreciation, and amortization (EBITDA),
  • reducing its debt interest, and
  • growing its net income margin (read here) and
• how its respective financial health correlates to its stock performance (read here).

In today's article I have combined the above financial data into one article on the financial health and stock performance of each of the 5 stocks in the Canadian Cannabis LPs Index as follows, in alphabetical order, for Q1, 2022:

1. Aurora Cannabis (ACB):  Stock Performance YTD (-80.8%); in the last 6 weeks (-31.1%); since the beginning of October (-11.8%)
   • Positive net operational cash flow: no
   • Net operational cash flow growth: increased
   • Chance of experiencing financial distress in the next 2 years: 56%,
   • EBITDA margin growth: declined
   • Interest expense growth: increased, and
   • Net income margin growth: declined.
2. Canopy Growth (CGC):  Stock Performance YTD (-73.1%); in the last 6 weeks (-32.1%); since the beginning of October (-13.9%)
   • Positive net operational cash flow: no
   • Net operational cash flow growth: declined
   • Chance of experiencing financial distress in the next 2 years: 78%,
   • EBITDA margin growth: increased,
   • Interest expense growth: increased, and
   • Net income margin growth: declined.
3. Cronos Group (CRON): Stock Performance YTD (-28.6%); in the last 6 weeks (-5.7%); since the beginning of October (-0.7%)
   • Positive net operational cash flow: no,
   • Net operational cash flow growth: increased,
   • Chance of experiencing financial distress in the next 2 years: 3%,
   • EBITDA margin growth: declined,
   • Interest expense growth: increased, and
   • Net income margin growth: declined.
4. OrganiGram Holdings (OGI): Stock Performance YTD (-48.6%); in the last 6 weeks (-12.6%); since the beginning of October (+2.3%)
   • Positive net operational cash flow: no,
   • Net operational cash flow growth: increased,
   • Chance of experiencing financial distress in the next 2 years: 1%,
   • EBITDA margin growth: declined,
   • Interest expense growth: declined, and
   • Net income margin growth: declined.
5. Tilray Group (TLRY): Stock Performance YTD (-55.3%); in the last 6 weeks (-6.5%); since the beginning of October (+13.8%)
   • Positive net operational cash flow: no,
   • Net operational cash flow growth: declined,
   • Chance of experiencing financial distress in the next 2 years: 70%,
   • EBITDA margin growth: declined,
   • Interest expense growth: increased, and
   • Net income margin growth: declined.
      

Conclusion

While the above analyses show the odd improvement (highlighted in bold) in the ongoing financial operational efficiencies of the constituents NONE has a net positive operational cash flow which is essential for a company to survive and there does not appear to be any correlation in the Canadian Cannabis LPs Index between the constituent stock price performances and their current financial health.

Hopefully, today's article has shed some light on what is actually happening in the sector and will prove helpful to you in determining whether or not to buy one of the above stocks and, if so, which one(s), but please do your own due diligence and avail yourself of a wide array of further analyses and commentary here before doing so.

If you have any questions regarding the above article or comments to make on the topic you are encouraged to do so in the Comment section below.

More By This Author:

Cannabis MSOs: Correlation Between Their Financial Health And Stock Performance?
Only One Cannabis MSO Is Financially Stable And With Financially Efficient Operations
A Moderate Recession, Not A Systemic Crisis, Is Likely In Canada