Could Aphria Inc. Be the Turnaround Play of the Year?
After dropping nearly 30% from its all-time high three months ago, shares of Canadian cannabis producer Aphria Inc. (TSX:APH) appear to once again be on the rise. The company recently reported very strong earnings, announcing production efficiencies which have resulted in Aphria boasting the lowest production costs in the industry for the commodity.
Aphria’s trailing twelve month earnings are also positive, something which other large marijuana producers such as Canopy Growth Corp. (TSX:WEED) and Aurora Cannabis Inc. (TSXV:ACB) cannot say at the moment.
\Investors looking to place their bets on the company that should come out ahead in the Canadian "green rush" have largely taken their money off the table of late, given a relatively poor showing by the industry following outsized growth expectations that have not panned out in the short-term.
Aphria’s recent earnings results, however, have sparked renewed interest in the industry from a long-term profitability standpoint, something which has resulted in an industry-wide boost in market capitalizations for the majority of publicly traded Canadian marijuana firms this past week.
While I have remained bearish on the rollout of the marijuana industry in Canada (I just don’t have much faith in the Canadian government to roll out the legalization process well), as well as the long-term effects of supply and demand which appear to be out of whack, given Aphria’s current position as a cost leader in this space, I would argue that this is one company which is worth a second look by investors interested in this sector.
AI
