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Summary
- Health Canada recently indicated that the country’s recreational cannabis market may be flattening.
- However, some pot stockslike HEXO Corp, Aurora Cannabis and Aphria continue to be a favorite among investors looking at long-term performances.
- Another factor contributing to the trending status of cannabis stocks is the launch of Cannabis 2.0, which includes edible and ingestible cannabis productsin Canada.
Investors and analysts have mixed opinions about the state of Canada’s cannabis industry amid the COVID-19 pandemic crisis. While recent numbers show a drop in the share value for most pot companies in the country,such as those of Aurora Cannabis, Aphria and HEXO, some investors believe that these companies are likely to catch up and result in good returns.For this very reason, cannabis stocks continue to be in demand amid investors who are on the lookout for companies that have offered good returns over a long period of time.Let’s take a close look at thestocks of pot companies mentioned above, which, despite their recent performance, have a track report of performing well and healthy quarter reports.
Aurora Cannabis (TSX:ACB)
Current Share Price – C$ 9.92
While this cannabis companyhas seen a drop of nearly 53 per cent its share price in the last three months, Aurora Cannabis’ long-term performance scale shows a massive growth. In the last six years, since its debut at the Toronto Stock Exchange in 2014, Aurora Cannabis has seen a whopping growth of over 2600+ per cent.
Shares of this medicinal and adult-use recreational cannabis manufacturer rode high when Canada legalized weed in 2018. As more and more investors attempted to make the most of this burgeoning industry, often referred to as the ‘Green Rush’, Aurora Cannabis’ share prices galloped. From a meager C$ 0.36 start in May 2014, its stock value rose to C$ 164.5 in October 2018, surging by an astonishing 45,000+ per cent.
The company’s shares eventually crashed due to market correction in 2019 in the cannabis industry. The onset of the coronavirus pandemic in 2020 further dragged the shares down. Between October 2018 and September 2020, Aurora Cannabis stocks lost nearly 94 per cent of its value.
Despite this, the company’s third quarter report (ending in March 2020)showed a growth of 18 percent quarter-over-quarter, amounting to over C$ 78 million, in its net revenues. Its cash position too showed an increase of 43 per cent quarter-over-quarter, reaching C$230 million in the third quarter.
Aurora Cannabis’ latest drop in share price came in the wake of the announcement that it expects an impairment charge of as high as C$1.8 billion. It also expects a C$30 million-charge for the termination of its deal withmixed martial arts company Ultimate Fighting Championship (UFC) in the first quarter of 2021.
Aurora Cannabis and Canopy Growth: 2 trending pot stocks on TSX
AphriaInc (TSX:APHA)
Current Share Price: C$ 5.87
Although this Ontario-based pot company’s share price dropped by 12 per cent drop in the last three months, at one point in July, Aphria’s stocks saw its trading activities perform better than its highest pre-pandemic levels in 2020. Its stock value has also been rising since its March lows, when the pandemic triggered shutdowns across Canada. Also, Aphria has recorded an impressionable growth of over 450 per cent in its share value over a decade.
Aphria’s latest quarter report showed an 18 per cent rise in its net revenue, up fromC$ 128.6 million in May 2019 to C$ 152.2 million in May 2020. The company registered a gross revenue of C$56.7 millionfor adult-use cannabis in the quarter ending in May 2020, which was not only a 27 per centincrease from its last quarter, but also the fifth consecutive quarter of growth. It also reported a consolidated adjusted EBITDA of C$ 8.6 million, which was an increase of 49 per cent from its last quarter.
Aphria, which operates in the medical and recreational cannabis market internationally, has a market cap of C$ 1.7 billion.
3 stocks under C$6 set to boost your investment: Bombardier, HEXO &Aphria
HEXO Corp (TSX:HEXO)
Stock Price: C$0.90
Stocks of cannabis manufacturer HEXO Corp fell in value by nearly 46 per cent in the last three months. However, the Quebec-based company recorded a total revenue of C$ 22.1 million in its quarter ending April 2020, up 30 per cent quarter-over-quarter and nearly 40 per cent year-over-year.
3 Trending Stocks Under C$8: Bombardier, Blackberry And HEXO
HEXO Corp completed its at-the-market equity program in August, having sold over 33 million common shares and making total gross proceeds of about C$ 34.5 million. It also sold its Niagara facility in June in a cost-cutting effort amid the pandemic crisis, which led a fall in production in the company.
HEXO Corp recently launched a line of ready-to-use vape pens across Canada and introduced itsmedical cannabis products in Israel. Back in April, the company did get a delisting notice from the New York Stock Exchange (NYSE), but that trouble has been temporarily averted as, due to the pandemic, it was offered an extension till December 2020 to remedy its listing price.
HEXO Corp has a market cap of C$ 424 million and a 1.5 million 10-day average volume activity in share trading.
