Aphria Stock Gains Momentum in August: How Should You Play?

Aphria stock

Aphria stock has been showing increased buying activities since the beginning of August after Aphria Inc's (TSX:APHA) (NYSE:APHA) reported impressive earnings.

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Over the past few years, some companies have emerged in the marijuana space that are firmly placed at the top both in terms of production and also market capitalization. The one company that seems to be a bit of an anomaly in this regards is the Canadian cannabis producer Aphria. It is interesting to note that despite being ranked at number 3 in terms of production capabilities, Aphria comes in only at number 5 when it comes to market capitalization. Analysts believe that such a gap in production capacity and market cap could be an indication that the company is currently undervalued by the market.

In addition to that, there is another huge factor in favor of Aphria that cannot be ignored. It is the only profitable company among cannabis companies of comparable size, and that is definitely a factor that should be kept in mind when evaluating the Aphria stock.

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Additionally, the company has forayed into the international markets and has managed to get a license to cultivate cannabis in Germany, the most lucrative market in Europe. That being said, the company’s biggest opportunity lies in Canada, and that is where Aphria needs to flourish quickly.

It has already signed supply deals with all the provinces in Canada and in addition to that, it has also inked a partnership with Southern Glazer, the wine and spirits distribution giant. The latter will help it immensely in the company’s quest to distribute its products across Canada. One thing that needs to be mentioned in this regard is the fact that many of Aphria’s competitors have made an effort to enter the hemp market in the United States and are making headway.

However, Aphria has not announced any such plans yet, and it remains to be seen what plans the company has in store with regards to that particular segment. That being said, Aphria stock looks to be in a good spot as of now, all things considered.

What do you think?

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