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Here’s How Aphria Plans to Drive Sales

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Aphria (APHA) plans to drive its fiscal 2020 sales by expanding domestically and internationally. It reported its fiscal 2019 fourth-quarter results last week. During the quarter, it beat analysts’ top- and bottom-line forecast. Since then, its stock has gained about 30%. To learn more, read Here’s Why Aphria Is Surging Today.

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Aphria plans expansion to drive sales

The company is focused on global expansion, and is on track in solidifying its domestic business. APHA has stated that its 100-acre second campus, Aphria Diamond, is set for operations following Health Canada’s approval. Once its facilities are operational, it expects total annual Canadian production capacity of 255,000 kilograms.

Aphria expands international exposure

Aphria is present in more than ten countries across five continents. During its earnings call, it discussed its growth strategy in Germany. It has introduced a cannabidiol-based product line there that it plans to sell through its subsidiary, CC Pharma. Aphria feels CC Pharma’s access to more than 13,000 pharmacies will drive sales.

In fiscal 2019’s fourth quarter, Aphria’s LATAM Holdings acquisition generated $4.1 million in sales. APHA has modified its plans in Colombia to provide long-term shareholder value. During the company’s earnings call, chairman and interim CEO Irwin Simon said, “We believe there is tremendous opportunity in LatAm and the Caribbean from a domestic and an international perspective and look forward to bringing these products to market.”

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August looks positive for the cannabis sector

The cannabis industry had a tough time in July, with CannTrust and HEXO facing regulatory scandals. This month looks better. Aphria’s strong results and stock price increase are boosting the sector. Cronos Group (CRON) also released its second-quarter results yesterday, surpassing analysts’ sales estimate. The stock is up 27.9% YTD (year-to-date). Jim Cramer feels Cronos and Canopy Growth (CGC) are good buys.

Peers’ stock performance

Aphria’s strong fourth quarter boosted its stock. As of yesterday, the stock had gained 13.3% YTD. Read Aphria: Target Price and Valuation Update to learn about analysts’ views on the stock.

Aurora Cannabis (ACB) stock has risen 34.3% YTD. Recently, it updated its fiscal 2019 fourth-quarter guidance. It now expects net revenue of 100 million–107 million Canadian dollars. Canopy Growth, set to release its fiscal 2020 first-quarter earnings results on August 14, is up 22.2% YTD. To know more, read What to Expect for Canopy Growth’s Earnings.

Innovative Industrial Properties (IIPR), a cannabis REIT, also reported strong results this week. The stock has risen 129% YTD. The Horizons Marijuana Life Sciences ETF has risen 23.0% YTD.

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