Summary

• Pot company Aphria Inc is set to announce its first quarter fiscal 2021 results on October 15.
• Cannabis sales contributed over C$ 9.6 billion to Canada’s GDP in July 2020.
• Cineplex stocks tumbled nearly 29 per cent on October 5 after the release of the new James Bond movie was postponed.

While some companies in Canada are beginning to get back on their feet, many continue to reel under the impact of the coronavirus pandemic. Nonetheless, investors have shown an interest in both these kinds of stocks. Take Cineplex (TSX:CGX) and Aphria Inc (TSX:APHA) for example. The movie theatre chain recently suffered another setback after the release of the latest James Bond movie got delayed. Stocks of the pot company, meanwhile, continues to climb towards its pre-pandemic level in February.

Both these stocks, currently trending on the Toronto Stock Exchange, are trading for under C$ 7. Let us delve into the details to understand their performance better:

Cineplex Inc (TSX:CGX)
Current Stock Price: C$ 4.75

As the pandemic-triggered lockdown kicked in back in March, movie theatres were few of the first businesses forced to temporarily shut down. Outlets of Cineplex, Canada's largest media and entertainment company, remained closed for nearly six months. It was finally able to begin a phased reopening throughout the country around the last week of August, with coronavirus-related cautionary measures in place.

However, with the resurgence of COVID-19 cases across the country and partial lockdown in some provinces, a large section of avid movie goers continues to steer clear of cinema halls. And this reflects in Cineplex’s stock performance post the reopening.

Another blow that added to its troubles was Cineworld Group Plc pulling the plug on its C$ 2.15 billion takeover deal of Cineplex in June. The UK-based movie theatre giant ended the deal after accusing Cineplex of breaching contract terms.

CGX STOCK PERFORMANCE

Cineplex shares took a sharp dip on March 19, plunging to a low of C$ 8.84, amid the pandemic-inflicted March market crash. Its stock price slid by over 56 per cent in the last six months and by 44 per cent in three months. It registers a decline of 86 per cent year-to-date (YTD).

Cineplex scrips tumbled nearly 29 per cent on Monday (October 5), hitting a record low of C$ 4.75, after James Bond movie ‘No Time to Die’ was postponed for release in April 2021.

CGX FINANCIAL RESULTS

Cineplex saw a 95 per cent year-over-year fall in its total revenue in the second quarter (ending 30 June 2020), amounting to C$ 22 million. It incurred a net loss of C$ 98 million from continuing operations in Q2 2020, as against a net income of C$ 22 million in Q2 2019.

Cineplex’s theatre attendance was down to 6,000 people in Q2 2020 from 17 million in Q2 2019.

Aphria Inc (TSX:APHA)
Current Share Price: C$ 6.68

Unlike movie theatre chains, the cannabis industry saw a boost in its sales amid the coronavirus pandemic. While the S&P/TSX Cannabis Index records a 49.5 per cent YTD decline, country-wide pot sales made some decent headways. Cannabis accounted for over C$ 9.6 billion in Canada’s GDP in July this year, according to Statistics Canada.

Licensed in 2014, Aphria Inc is one of the top producers of pot in Canada. While its shares also saw a dip amid the pandemic like most companies in the country, Aphria went on to record revenue growth for the fifth consecutive quarter.

Aphria currently has a market cap of C$ 1.9 billion. Its price-to-book (P/B) ratio is 1.06, its price-to-cash flow (P/CF) ratio is 2,681.6 and its debt-to-earnings (D/E) ratio is 0.23, as per the data on the TSX.

The organization is set to announce its first quarter fiscal 2021 results on October 15.

APHA STOCK PERFORMANCE

Aphria shares have steadily recovered since tumbling to a low of C$ 3.03 on March 17 amid the pandemic-triggered market crash. Its stock price climbed over 68 per cent in last six months and nearly 14 per cent in the last three months.

Aphria stocks are mostly trading flat this year. In the last ten days, it saw an average trading volume of 1.7 million.

APHA FINANCIAL RESULTS

The company’s net revenue stood at C$ 152 million in the fourth quarter fiscal ending 31 May 2020, up 18 per cent year-over-year (YoY). Its adjusted EBITDA was up 49 per cent quarter-over-quarter (QoQ), amounting to C$ 8.6 million in Q4 FY20.

The pot company bore a net loss of over C$ 98 million in Q4 FY20, as against a net income of C$ 15.8 million in Q4 FY19. By the end of latest quarter, Aphria’s cash and cash equivalents stood at C$ 497 million.