The cannabis industry came blazing out of the gates this year, and many investors are looking for exposure to the fast-growing marijuana space including companies directly or indirectly involved with cannabis, Cannabidiol (CBD) and hemp.
However, it can be challenging making a decision on the company to invest given that most Canadian growers are in early differentiating stages.
Aphria Inc (NYSE: APHA) is now on the recovery path amid a disappointing earnings report. The company grows and sells medical as well as recreational marijuana products in Canada. Moreover, it has notable foreign medical marijuana operations.
Aphria Inc Price Check
The company has been through a lot of drama lately with allegations regarding an asset purchase as well as conflict of interest in the C suite. As a result, the stock was sent from more than $16 per share to below $4 a share in a short period.
However, the company has restored confidence as it’s observed with an increase in the price. Currently, the stock’s price stands at $.6.95 and is set for an upward trajectory.
Although the recent earnings numbers may have stopped the upward move for a bit, still, APHA is well-positioned to recover nicely.
A Closer Look at Aphria
Founded in 2014, Aphria is one of the largest cannabis companies in the world listed both on the NYSE and the Toronto Stock Exchanges. Aphria is the third-largest grower in Canada with over 250,000 kgs of peak annual output at full capacity.
There have been several negative happenings in the company which might have led to the poor third-quarter earnings results despite recording CA$73.6 million in revenue.
Perhaps, the revenue recognized was as a result of the acquisition Aphria made of distributor CC Pharma during the quarter.
The Management Scenario
Over the past few months, Aphria board has seen several changes with the latest one being the resigning of its president Jakob Ripshtein from June 7, 2019. Furthermore, CEO and co-founder had earlier left the company and Irwin Simon resumed duties as interim CEO.
Why it’s Important
Confidence in management is essential, and with marijuana companies now going all out wooing the lucrative market opportunity via inorganic growth, operational excellence, as well as management expertise, are of utmost importance.
And critical decisions have to be made for that. Looking at his record, Simon has the capable hands of managing the company to recover from reputational blows that it had suffered recently.
Nevertheless, performance wise in the year to date, APHA has gained about 36.7% against 15.9% of the S&P 500, but it has lost 35% compared to a 6.7% gain for S&P 500.
The Expansion Mode
Aphria is simply in an expansion mode. The company has made several deals; for instance, the deal with Southern Glazer’s wine & spirits for distribution of Aphria’s recreational marijuana products in Canada.
Also, it acquired several South American cannabis companies for almost $200 million last year in a deal with Scythian Biosciences.
Furthermore, earlier this year the company signed supply collaborations with each province in Canada as well as the Yukon Territory to ensure access to its products for almost 100% of the population in Canada.
The deal that Aphria referred to as “opportunistic” and “inadequate” from Green Growth is another highlight. Aphria management stated that Green Growth’s offer simply undervalues it by 23%, and hence it urged shareholders to reject the buyout.
It’s, therefore, a move that suggests as much as the company has not realized full potential; it’s right on the track to make even tougher decisions. Besides, it leaves the doors open to the fact that Aphria may finally have a potential acquisition candidate. Perhaps, it won’t surprise anyone if another big firm off-the-cannabis industry invested in Aphria.
Is Aphria a Smart Pick?
The bottom line is that Aphria, for now, has many skeptics. However, with a top-tier production capacity as well as a solid strategy for Canada’s recreational pot market, Aphria is set for the highs.
Subsequently, the company’s acquisition of Nuuvera giving it a supply deal with CC Pharma opened for the company to enjoy a robust international presence.
Nevertheless, Aphria is well ‘moving past’ its past, and it’s arguably in the best shape ever to keep an upward trajectory that will continue rolling for an extended period.
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Disclosure: We have no position in APHA and have not been compensated for this article.
Terra Tech Corp (OTCMKTS: TRTC) A Bounce Back Play As Net Loss Narrows And Gross Margins Expand
Terra Tech Corp (OTCMKTS: TRTC) has retraced lower ever since it clocked 2019 highs at the end of the first quarter. The stock has crumbled under soaring bearish pressure. Amidst the steep pullback, the stock is a potential bounce-back play as it is currently trading at the lower end of a tight trading range.
Terra Tech Price Analysis
A plunge to the lower end of the $0.63 to $1 trading range leaves the stock in a precarious position. A plunge lower could elicit further selling pressure while a bounce back could result in the stock making run for this year highs.
In our view, the stock could bounce back on investors reacting to a string of positive developments that affirm the Company’s prospects. For starters, Terra Tech is fresh from launching a legal cannabis delivery services as it continues to pursue growth opportunities in California.
The Company is also fresh from delivering impressive financial results that indicate gross margin expansion as net loss from operations continues to narrow. The sale of Blum Desert is another development poised to strengthen the company’s financial position.
Terra Tech commencing cannabis sales to the adult use market should continue to excite investor’s, ideal for fuelling an upswing in the stock’s price action activity. With the stock appearing to have hit the floor after the recent pullback, a correction higher could be in the offing at the lower end of the trading range.
Namaste Technologies Inc (OTCMKTS: NXTTF) A Bounce Back Play On Robust Revenue
Namaste Technologies Inc (OTCMKTS: NXTTF) has had to contend with wild price swings, as investors reacted to delays in the filling of audited financial results and ousting of Sean Dollinger as the CEO. That could soon change, as the Company has come through and filled results that affirm robust revenue growth.
Namaste Technologies Price Analysis
However, concerns over widening net loss could hurt the stock’s sentiments in the market, at a time when it is in dire need of, groundbreaking catalysts to avert further slides. While the stock has bottomed out, it remains engulfed in a long-term bear trend.
The descending trend line could attract short selling pressure on the filling of negative news that arouse concerns about the Company’s long-term prospects. A spike to the $0.65 level essentially means the stock is at a critical resistance level.
Failure to rally and find support above the resistance level could elicit some form of selling that could see the stock trading sideways. Immediate support on any pullbacks from current highs is seen at the $0.40 mark.
A sell-off followed by a close below the $0.40 mark could result in Namaste Technologies resuming its downtrend, as has been the case for the better part of the past year. Conversely, a rally followed by a close above the $0.66 mark should pave the way for the stock to make a run for the $1.20 mark, seen as the next…
Cannex Capital Holdings Inc. (OTCMKTS: CNXXF) A Long-Term Play Despite Price Slump
A strategic merger with 4Front coming on the heels of Pure Ratios holding acquisition affirms why Cannex Capital Holdings Inc (OTCMKTS: CNXXF) prospects can only get better despite the recent price slump. The transformational events expand the Company’s operations into six U.S states signaling push for market value in the burgeoning cannabis sector.
Cannex Price Analysis
While Cannex has taken a significant hit in the market, it is still up for the year after an excellent start that saw it rally by more than 200%. The stock has since pulled lower in what appears to be a correction phase.
The ongoing pullback has since exposed the stock to a crucial support at the $1 a share level. A breach of the support level would leave the stock susceptible to further drops probably back to the $0.80 mark, a critical technical level.
For the stock to resume its uptrend, it first needs to rise and stabilize above the $1.20 mark, the immediate resistance level. The stock rallying and finding support above the $1.2 mark would open the door for bulls to fuel a rally back to 52-week highs.
Cannex is a diversified company that leases real estate properties and sells supplies to cannabis cultivators. The Company also offers financial services as well as branding and IP services to licensed cannabis operators. It is also focused on premium indoor cultivation extraction and branding of edible…