Is Aphria the king of Canadian pot stocks?

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Marijuana investors likely would have considered cannabis companies again last year Cannabis Aurora (NYSE: ACB) and Canopy growth (NYSE: CGC) to be the industry leader in the Canadian pot market. But with the two companies now struggling to stay out of the red and sometimes struggling to grow their best lines, another cannabis producer Aphria (NASDAQ: APHA), had the opportunity to establish itself.

Although Aphria was a big name in the cannabis industry a year ago, investors weren’t looking at her the same way as Aurora or Canopy Growth. A year ago, Aphria’s market cap was around $ 1.6 billion, a far cry from Aurora’s $ 8 billion valuation or Canopy Growth’s astronomical market cap of over $ 10 billion. dollars. Since then, Aphria’s market cap has declined somewhat, but at $ 1.3 billion it is now slightly above Aurora’s $ 1.1 billion. Meanwhile, Canopy Growth currently has a market capitalization of approximately $ 6.3 billion.

Let’s take a look at why Aphria has become a relatively bigger name in the industry, and why it is likely to continue to increase its value relative to its peers.

Aphria has normally been profitable, unlike many cannabis companies.

When Aphria released its fourth quarter results on July 29, investors were shocked that the company had suffered a net loss of C $ 98.8 million. The stock price reflected this disappointment, dropping from $ 6 before earnings to around $ 4.50 today. It was just the second time in five quarters that the Ontario cannabis producer had suffered a loss, and it was much larger than the C $ 7.9 million loss he had suffered two periods earlier.

Image source: Getty Images.

In contrast, Canopy Growth has been in the red in each of its last five reporting periods, and in four of those quarters, its losses have been well over C $ 98.8 million. It’s a similar story for Aurora, whose investors are also expecting losses. The company has recorded only one profitable quarter in its last five reporting periods.

Profits aren’t that common in the cannabis industry, and staying in the dark with any consistency, like Aphria did, is rare. And that’s one of the reasons the company stands out among its peers in Canada.

It is also the market share leader

Aphria reported sales of C $ 152.2 million in its most recent quarterly results. This represents an increase of 5.4% over its third quarter results and an improvement of 18.4% over the period of the previous year.

First quarter 2021 results, released on August 10, showed Canopy Growth’s revenue for the quarter at just C $ 110.4 million. While that’s a 22% increase from the period a year earlier, it’s still well below Aphria’s tally.

Aurora’s most recent quarterly results, which the company released on May 14, showed even lower net sales figures of C $ 78.4 million. Aphria’s lowest revenue over the past five reporting periods was C $ 120.6 million, even more than the most recent results for either of its two competitors Canadian.

Is Aphria a buy today?

Here’s a look at how the three stocks have performed over the past 12 months:

APHA data by YCharts

Although on the decline, Aphria’s stock is doing better than the other companies listed here, and even the Horizons Marijuana Life Sciences ETF (OTC: HMLS.F) in general. And that’s a trend that should continue, given that Aphria is still a cheaper buy when you consider the price / sales ratio of these three stocks:

APHA PS reports table

APHA PS Ratio data by YCharts

With Aphria’s shares falling in recent weeks, it might be a good time to buy shares in this major Canadian cannabis company. It has definitely made a name for itself as the best Canadian pot stock, and it’s hard to find a better buy in Canada right now, especially considering its solid sales numbers and impressive results. .



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