17 Sep

Cannabis Roundup: IIPR, WEED, ACB, and APHA

WRITTEN BY Rajiv Nanjapla

The US markets were flat today as the Federal Reserve started its two-day meeting. It appears that investors are keenly watching the Fed’s decision on the potential rate cut. Yesterday, CNBC reported that the probability of no rate hike has increased to 34% compared to zero chance a month ago.

Cannabis stocks and ETFs

Today, cannabis ETFs reported mixed performance. At 1:55 PM EDT, the ETFMG Alternative Harvest ETF (MJ) was trading 1.3% higher, while the Horizons Marijuana Life Sciences Index ETF (HMMJ) was down 1.4%. Although the majority of the marijuana stocks were trading in the red, Innovative Industrial Properties (IIPR) and Canopy Growth (CGC) (WEED) were in the green.

IIPR was up over 4%

Today, at 1:55 PM EDT, Innovative Industrial Properties was trading at $95.34, which represents a rise of 4.7% from its previous day’s closing price. Year-to-date, IIPR’s stock price has increased 100.6%.

On August 7, IIPR reported an impressive second-quarter performance. The company had outperformed analysts’ revenue estimates, while its earnings per share were in line with expectations. On September 13, the company had announced a quarterly dividend of $0.56 per share, which was 30% higher than the previous quarter.

All these factors appear to have led to a rise in the company’s stock price. However, the company is still trading at a discount of approximately 48% from its 52-week high of $139.53.

Canopy Growth was in the green

Today, CBC reported that Canopy Growth’s (CGC) chairman, John K. Bell, stated that he expects the company to appoint a new CEO by the end of 2019. CGC stock was trading 0.9% higher at 1:55 PM EDT.

Year-to-date, the company’s stock has increased 0.8% through September 16. CGC has underperformed the broader equity market, as the S&P 500 Index has risen 17.3% this year.

Aurora Cannabis continues to fall

The downward momentum in Aurora Cannabis’s (ACB) stock price continued today as well. At 1:55 PM EDT, the company’s stock was down 4.6%. Since reporting its fourth-quarter earnings on September 11, the company has lost 14.7% of its stock value through September 16.

The company’s fourth-quarter revenues came in lower than its guidance and analysts’ expectations. Yesterday, Stifel Nicolaus downgraded ACB stock from “hold” to “sell,” and it lowered its price target from 7 Canadian dollars to 5 Canadian dollars. The lower-than-expected fourth-quarter revenue and Stifel’s downgrade appear to have pressured the company’s stock price.

Aphria declines over 5%

Today, Aphria (APHA) was trading 5.1% lower at 1:50 PM EDT. Year-to-date, the company’s stock has increased by 11.7% through September 16.

Also, the company was trading 84.2% higher than its 52-week low of 4.77 Canadian dollars. APHA was trading at a discount of 59.2% from its 52-week high of 21.48 Canadian dollars.

Aphria reported its fourth-quarter earnings on August 1. The company had outperformed the analysts’ top-line and bottom-line expectations. For fiscal 2020, the company’s management set a bullish outlook, detailed in Why Aphria Expects Huge Revenue Growth.

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