With Aphria (APH-TSX) closing at $8.53 on Friday, the stock price is now roughly 5% above our fundamental target of $8.13. We began this stock call as a buy at $5.74 after the July 14th close. The Federal sin tax of $1 or 10% came in at the low end of the 10% to 15% expectations. With this positive news out of the way, there remain fewer macro catalysts to move the stock higher. Recall legalization begins on July 1, 2018 and all provinces are expected to be ready by this time. Important Disclosures and Disclaimer This publication is produced by Perspectec Inc. This publication and […]
Cannabis Industry
23 posts
With contributions from Saif Shah Medical marijuana licensed producer Aphria (APH.TO) reported in-line revenue and EBITDA. Below are APH’s fiscal Q1/18 results versus our expectations. Source: Company reports and Perspectec An unrealized gain with upside – Results were very much in-line with our expectations up until “unrealized gain on long-term investments”. Aphria has used the $200 million+ investor funds raised not only for it’s Leamington greenhouse expansion but also for a number of <20% ownership positions in public (Level 1) and private (Level 3) marijuana companies. APH’s long-term investments would have decreased in value the last three months if it wasn’t for their […]
Aphria is expected to report its fiscal Q1/18 (three months ended August 31st 2017) results tomorrow. Below are our expectations for results: Q1/18 Forecast Kilograms sold should continue to track (and maybe beat) revenue growth After a low cash cost per gram of $1.11 last quarter, we believe Aphria will be able to maintain and see no major movement in cash costs We expect a slow down in EBITDA from last quarter but still enough to make it Aphria’s eighth consecutive quarter of positive EBITDA We believe investors should continue buying Aphria’s shares up until about $8. We are maintaining our […]
Aphria is in the midst of building out its largest and likely last greenhouse expansion (Part IV). Their 700,000 square-foot expansion will increase cannabis production capacity from 30,000 KG a year to 100,000 KGs when it is finished by mid-2018. Talking with insiders at the company, material technological advancements are poised to have a meaningful impact to the future operational costs and profits of Aphria. Among the changes the additions to includes: 1) The co-generation of heat and power (CHP) in the new building, 2) Power supply from the proposed Windsor-Essex upgraded grid, and potential sell back 3) Switching to LED lightning (provided […]
The streets are talking. To us. Wall Street and Bay Street that is. We normally speak with a number of instiutional investors every week. Below are filtered and redacted summary notes from this past week about what we have talked about to a limited number of institutional investors. This is not an entire list and includes only our coverage universe. I filter for things that have the potential to have been said to push a position in a stock. I redact information that can be deemed as sensitive for the investor in any way or that can lead to a more unattractive […]
This version of our comparable table compares only public cannabis producers in Canada who have produced marijuana and have a net cash balance in the millions. We compare a number of non-financial metrics such as production, forecasted future production, kilograms sold, capacity and percentage of oil sales. We also look at traditional financial figures such as Bloomberg consensus EV/EBITDA estimates for fiscal 2017, 2018, 2019 and sometimes 2020 as well as our estimates for Aphria, Canopy Growth and MedReleaf. Important Disclosures and Disclaimer This publication is produced by Perspectec Inc. This publication and the contents hereof are intended for […]
In this report, we compare key metrics between Aphria and Canopy Growth, two of the largest licensed Canadian marijuana producers. Our fiscal 2019 EBITDA estimate for both companies are dozens of millions of dollars below the lowest sell-side estimate. In our discussions with those in the industry and analysis of the market, we believe our estimates will end up being closer to actual reported figures. We believe Aphria’s share price will increase (or decrease less) versus Canopy’s beginning from July 14th 2017 to the average last ten trading days closing price in October of 2019. The stock call is good […]
This is the first in an ongoing series of research examining Aphria’s (TSX: APH) business and share price. The purpose of undergoing this research is to help us determine the future direction of APH relative to Canopy Growth (TSX: WEED). The highest risk/reward forecast we can make that we believe will impact the future stock price is anticipating Aphria’s next few quarter’s kilograms sold, profit per gram and EBITDA. Unexpected changes in kilograms sold can lead to changes in the trajectory of revenue and EBITDA and a re-valuation of the stock price by buy-side and sell-side. We believe Aphria’s share […]