NEPT stock is one of the top gainers in the cannabis sector this month. The stock has recovered almost 20% so far in April after falling 12.1% in the month of March. In fact, shares of Neptune Wellness Solutions Inc (TSX:NEPT) (NASDAQ:NEPT) are up over 12% in the past week and are now trading higher by 1%, selling at $3.90 on the NASDAQ.
Broader Market Weakness
At the end of March, Neptune Wellness Solutions announced that it had completed its first commercial production lot and was already shipping the cannabis products from its Quebec GPP facility.
In March, NEPT stock declined despite the company not making any announcements that could be considered damaging. Therefore the decrease in NEPT stock has largely been attributed to overall sector weakness. Neptune began the year strongly and is expected to have pullbacks on profit-taking.
Most cannabis companies released weaker than anticipated quarterly results, and this might have also contributed to the decline in NEPT stock. For instance Canopy Growth Corp’s (NYSE:CGC) stock lost 8.5%, Cronos Group Inc.’s (NASDAQ:CRON) stock declined by 14.8%, and Tilray Inc. (NASDAQ:TLRY) lost 19.4%.
In June last year, Neptune and Canopy Growth signed a multiyear agreement that included minimum volume commitments. According to the agreement, the capacity of Canopy Growth to extract, refine, and value addition to products will be supplemented by Neptune.
NEPT Stock Up 30.3% YTD
Despite the pullback on profit, NEPT stock is so far having a tremendous year as a result of investor excitement following the company’s debut in the cannabis industry. By April 4th, NEPT stock was up by 30.3%, outdoing the market’s performance by about two-to-one.
Neptune Wellness Solutions has so far not announced the date for the release of its Q4 and FY2019 results. The results will offer investors an indication of how Neptune is performing in the cannabis business. Mario Paradis, the CFO, stated that the company expects positive EBITDA from its cannabis business. However just like most cannabis stocks, NEPT stock also remains to be risky and volatile.
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