Aphria Stock Hardly Moving After the Fall: What Investors Need to Know

Aphria stock

Since last year, Aphria stock has possibly been one of the more problematic marijuana stocks in the industry for a variety of reasons. Attacks from short sellers, turmoil at the management level and hostile takeover attempts helped to turn it into a controversial stock for investors to choose.

However, the clouds of those days are slowly going away, and there are plenty of reasons for investors to be positive about the Aphria Inc (TSX:APHA) (NYSE:APHA) now.

Production Capabilities

The success of a cannabis company depends a lot on its production capabilities, and in that regard, Aphria is definitely moving in the right direction. It is currently one of the fastest-growing producers of cannabis in the industry, and that was apparent in the company’s earnings reports from the third quarter.

The year-on-year rise in production hit 61% in the third quarter, and the company’s sales have come close to that of Canopy Growth (TSX:WEED) (NYSE:CGC), the biggest cannabis company in the world. On the other hand, Aurora Cannabis (TSX:ACB) (NYSE:ACB) is also in its sights, and considering the fact that the Aphria stock is trading at a much lower price, it could prove to be more attractive for many investors.

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Renewed Optimism

Perhaps the most important factor with regards to renewed optimism about Aphria is the fact that the company seems to have finally shaken off the scandal that it had been embroiled in regarding its short seller allegations. The company’s then CEO had to step down at the time, but an independent inquiry cleared Aphria of paying over the odds for a company. More importantly, the acquisitions of ABP and CC Pharma have proven to be quite important and contributed generously to the company’s bottom line.

Last but not least, many of the short sellers seem to have closed their positions, and it is a clear indication that things are turning around positively for Aphria.

The last big factor that could prove to be a significant positive for Aphria is the fact that competitors like Canopy Growth Corp are currently struggling. The world’s biggest cannabis companies posted losses to the tune of $670 million for the year 2018 and are burning through cash at an alarming rate. While this is the case with many other companies, Aphria has managed to buck the trend and position itself as a cannabis company that could become a big player in the industry soon.

Aphria stock has corrected about 40% from this year’s peak price of $11.

Are you holding APHA stock? Let us know what you think about it.

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Featured image: Canva