Canadian cannabis stocks have increased in strength in the last year, thanks to the legalization of recreational and adult-use products in every province. Aphria Inc. (NASDAQ: APHA) is sometimes overlooked by investors, but it’s one of the best performing legal cannabis companies and its stock has momentum and strong institutional support behind it.
Aphria is yet to generate sustained profits but the company’s fiscal management is impressive. For the company’s first quarter of FY21, it reported a net loss of $5.1 million Canadian, beating the worst analyst projection by around 50%. Revenue increased by more than 15% in the period for a total of $145.7 million Canadian. More notable was the fact that the company reduced its cost of goods sold by 16.6% per gram. A trend of increased efficiency is pushing the company towards profitability.
Aphria is the market leader in Canada, especially in major growth provinces like Ontario. The market is currently underserved with a low number of dispensaries, indicating that Aphria will grow significantly in the coming years as it increases its distribution network.
Of 14 analysts recorded by FactSet, 11 recommend a BUY rating on this stock. Recent momentum and increased confidence in the U.S. stock market could see this bargain pick soar in the coming months.
- 1 Year Price Growth: 47%
- YTD Price Growth: 84%
- 3 Month Price Growth: 78%
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