It was earnings day today for Aphria and the results are better than expected with positive news for the future. On the downside their sales are still suffering from the cut back of the veteran’s medical program and their very questionable investment moves. The share price has gone up about 10% today. I feel that I need to increase my portfolio weighting with some more Aphria shares since it is my smallest core holding. Unless if their strictly greenhouse model under-performs then I’m confident Aphria will continue to be a leader in the marijuana space.
Aurora’s been making big moves or at least many moves recently. Today they announced some apparently good news regarding progress towards a possible German production facility. They’ve also announced the conditional uplisting to the TSX which hasn’t meant anything in the past in terms of share price going up for other LPs. Still, it’s good news. Aurora’s going for gold and has become one of the big players. A lot of their success is banking on their Aurora Sky project which appears to be progressing nicely but that’s just what they tell us. I could show you a picture of me and two beautiful women but it doesn’t mean they let me apply sunblock on their backs.
There once was a time not too long ago that this stock was double of Aphria. More often now they are only about a third higher. I believe much of that has to do with the psychological aspect of Canopy’s share price. When I tell people I recently bought Google, Facebook or Dollarama they comment on how expensive it is. There’s a a reason why companies do stock splits and why people feel confident buying penny stocks…cheaper share price. Canopy is doing great things but people also don’t like the big losses. At this point of the game, Aphria is providing better security for the minds of investors with its low product costs and smaller losses. Bruce Linton recently stated that he’s not looking to win the warm up. I like his rationale and his analogies. Canopy has recently released their own spray of good news but I guess not good enough.
Many analysts seem to favour this one but they don’t seem to be doing much. My guess is that people like their valuation compared to others. I can’t remember the last time they have had any good news. Last week I traded some Aurora shares for Organigram and I guess so far it’s been a mistake. Aurora has jumped from their recent good news while Organigram has fallen. Worst of both worlds. Some times you lose some and then lose some more. I chose to own a little more Organigram because of analyst sentiments and the risk profile of them vs Aurora. I traded the shares when they were both at very similar prices because my other rationale is that most of the time Organigram trades at a higher price than Aurora.
Like always, we’ll see what happens.