Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 SPY total return over the last 12 months is 50.3%. But there is no question some big-name stocks performed better than others along the way.
Aphria’s Huge Run: One company that has been a spectacular investment in the last year has been Canadian cannabis producer Aphria Inc APHA.
Aphria struggled in a difficult Canadian market in 2020, battling lackluster growth, declining gross margins and rising inventory levels. In May 2020, Aphria announced it would be switching its U.S. stock listing from the NYSE to the Nasdaq as a cost-cutting measure.
However, the biggest news by far in the past year came in December when Aphria announced a merger with Tilray Inc TLRY in a deal that would create the world’s largest international cannabis company by revenue.
Fortunately for Aphria investors, the COVID-19 pandemic in 2020 didn’t hold back Aphria’s growth.
In 2019 Aphria reported a $16.5 million net loss on $237.1 million in revenue. In 2020, those numbers jumped to a net loss of $84.6 million on $542.3 million in revenue.
At the beginning of 2020, Aphria shares were trading at around $5.30. By the beginning of March, the stock was down to $3.69, after news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.
Aphria bottomed at $1.95 during the pandemic-driven March sell-off. Fortunately for Aphria investors, the dip did not last long.
By July, Aphria shares were back above $6, but the rally stalled at that point until the November U.S. presidential election.
A victory by Democrat Joe Biden in November and a surprise blue wave giving Democrats control of both the Senate and House sent cannabis stocks soaring on optimism that U.S. cannabis legalization may be just around the corner.
Aphria In 2021, Beyond: The stock ultimately peaked at $32.29 in February 2021 before pulling back to around $13.17. Traders may be taking profits in the stock after its huge run in the past year. Or they may simply see lack of progress on U.S. legalization and a sequential decline in sales in the most recent quarter as a sign of more growth headwinds to come in the Canadian market.
Still, Aphria investors who bought one year ago and held on have generated a big return on their investment. In fact, $1,000 in Aphria stock bought on April 13, 2020, would be worth about $4,336 today.
Looking ahead, analysts are expecting more upside for Aphria in the next 12 months. The average price target among the nine analysts covering the stock is $14.54, suggesting 4.4% upside from current levels.
Versión en Español en El Planteo: Esto Tendrías Hoy si Hubieras Invertido USD 1.000 en Acciones de Aphria Hace un Año
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