09. December 2019 | 07:40 CET
Aphria, Aurora Cannabis, Canopy Growth - What Investors Need to Know in December
Investors around the globe have become acquainted with a new industry in recent years: cannabis. It is actually an old plant, but the effects attributed to it have sparked a new trend and brought a variety of applications in various products to market. From Canada, the hype was significantly supported and from there producers have conquered the world - provided that the legal framework for the production, processing or distribution of cannabis products has already been created. After a long phase of rising share prices, the last thing to follow was a hangover mood. Why is December a special month?
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ISIN: CA05156X1087 , CA1380351009 , CA03765K1049
Sales at the end of the year 2019
The shares of Aphria have traded between CAD 4.76 and CAD 14.37 over the past 12 months. On Friday, the stock was traded at 6.22 CAD on the Toronto Stock Exchange and recovered significantly from its low around four weeks ago. The stock market value of the cannabis company Aphria at the end of the previous week was CAD 1.57 billion.
At Aurora Cannabis the price development tends to be comparable. The company's shares have been traded between CAD 2.82 and CAD 13.67 since December 2018. Their shares also reached its low for the year around four weeks ago. On Friday, the shares were traded at CAD 3.21 and gave the company a market value of CAD 3.50 billion.
Second row enticing with potential
Canopy Growth, with a market capitalization of CAD 8.61 billion, is the heavyweight among the listed companies in the cannabis industry. Canopy Growth shares have traded from CAD 18.23 to CAD 70.98 over the past 12 months. The indication that the lowest level was reached in the past four weeks is a mere formality. On Friday, the Canopy Growth shares were trading at 24.72 CAD.
There are also exciting second-tier companies that do not yet have to defend a billion-dollar valuation, but are working towards the big breakthrough next year. The developer of cannabis drinks, BevCanna Enterprises, currently has less than CAD 20 million market capitalization and the producer of cannabis in Africa, EXMceuticals, less than CAD 30 million. The two newcomers have promising and scalable business models.
End of the year offers bargains
Investors wishing to position themselves in cannabis may have a particularly interesting window of opportunity for their exposure in the current month of December. Tax Loss Season is a term for experienced investors that stands for tax optimization. The phenomenon of shareholders throwing their loss positions onto the market is a recurring year-end ritual, especially in Canada.
This development is clear in the case of listed companies that have suffered greater price losses in recent months. The chart trend of a loss in value often ends in a panicky sell-off in December. As is well known, the profits lie in purchasing and bargain hunters can get their money's worth with low limits.