Big Pot Firms Canopy & Aphria Push Up TSX Healthcare Sector's MCap

Summary

  • Canopy Growth Corporation and Aphria now account for more than 67 per cent of the S&P/TSX Capped Health Care Index’s top 10 companies, representing an extraordinary rally.
  • Aphria’s stock is up 253 per cent this year compared to the benchmark healthcare index’s growth of 71.50 per cent year-to-date (YTD).
  • Shares of Canopy Growth have gained 99 per cent in 2021, which have also boosted the TSX healthcare index.

 

The S&P/TSX Capped Health Care Index climbed over 8.5 per cent on Tuesday, February 9, offering index investors an attractive return.

But it’s not the mainstream healthcare companies that are boosting this growth.

The sector has been sailing on green rush, propounded by investors’ new-found confidence as US and Mexico head for marijuana legalization.

The index has a year-to-date yield of more than 71.50 per cent.

Canopy Growth Corporation (TSX: WEED) and Aphria Inc (TSX: APHA) are two of the top constituents of the index. Their combined market cap stands at approximately C$ 32.888 billion, which is over 67 per cent weightage of the top 10 constituents of the healthcare index.

With big cannabis company’s boosted earnings amid pandemic, the cannabis industry’s growth is looking healthier than last year. That means investors have been actively picking up these two giant pot stocks.

Let us look at how both stocks are faring amid ongoing rally:

 

Canopy Growth Corporation (TSX: WEED)

 

The company reported topline growth of 23 per cent year-over-year (YoY) on Tuesday, February 9. Its stock popped up by almost 12 per cent on the higher revenue report. It is up 99 per cent this year, led by the higher net cannabis sales on a YoY basis.

The company has already pitched its plans to enter the US market once the cannabis industry gets legalized federally. The Ontario-based large-cap company’s shares have swelled by approximately 146 per cent this year, with a 10-day volume of 2.5 million.

Image Source: Kalkine Group @2020

 

Aphria Inc (TSX: APHA)

 

The C$9.5-billion company announced on February 8, that it will commence its marijuana cultivation operations in Germany’s Neumünster region after an approval from the European medicine regulator, Good Manufacturing Practice. In the wake of this development, the mega-cap company’s stock zoomed 24.54 per cent on Tuesday, February 9.

On January 14, the company reported a 33 per cent surge in cannabis sales for the second quarter of fiscal 2021. That helped its stock to hit a record two-year high. It has an eye-popping one-year return of more than 452 per cent. 

The cannabis retailer’s shares have rocketed over 253 per cent year-to-date (YTD), as it hit a 52-week high of C$ 30.70 yesterday. The company has an average volume of 8.7 million for the last 10 days.

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