Over the past few weeks, some cannabis stocks have managed to make a comeback after having gone through a bit of a torrid time in 2019, and one of those is Aphria Inc (TSX:APHA) (NYSE:APHA). While it is true that Aphria stock gave up some of the gains over the past couple of weeks, the drop was primarily due to a coronavirus-related selloff in the market. The stock has declined by 20% since January 23.
Earnings Review
Aphria Inc’s fiscal second-quarter performance didn't set the stock on fire. The company also lowered its expectations for the full year. Some experts still believe that Aphria remains one of the best cannabis stocks for 2020, and that was perhaps the reason behind APHA stock's recent gains. As of the end of the last quarter, the company has C$498 million in cash, and that allows it the necessary legroom for expansion.
Aphria is also well placed to take advantage of the cannabis 2.0 market through its vaping products, and, in addition to that, the company wants to go into edibles as well as topicals.
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Aphria stock is now down $0.43 at $4.65.
Even if the company does not expand its business, its cash pile gives it the opportunity to make canny acquisitions if there are bankruptcies in the industry. Most of these factors make Aphria one of those stocks that could well prove to be the best performer of the year. However, nothing is guaranteed in the industry, and there are still a lot of risks associated with Aphria Inc.
Aphria stock could well be a high risk and high reward play for investors. However, it should be noted that many stocks have recovered so far this year, and if there is a recovery in the sector, then it could work in Aphria’s favor.
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