PI Securities analyst calls Aphria (TSE:APH) the lowest cost producer among the public licensed producers in Canada with a strong management team
Cantech Letter | April 7, 2017: PI Securities yesterday released its quarterly top picks amongst a number of sectors and analyst Jason Zandberg chose Aphria Inc. (TSX: APH) as his top pick in the cannabis sector.
Mr. Zandberg notes that Aphria grows marijuana in greenhouses, which reduces the power consumption associated with grow lights significantly. He also points out that Leamington, Ontario, where the company’s greenhouse operations are located, is one of the warmest places in the country and has a high caliber agricultural labour pool. This all adds up to the ability to produce marijuana cheaply, something the analyst thinks will be a long-term advantage.
“We have chosen Aphria Inc. as our Q2 Top Pick as the Company is the lowest cost producer among the public licensed producers in Canada and has a strong management team with extensive relationships with Canadian pharmacy professionals,” says the analyst. “We expect Aphria will continue to maintain its position as the lowest cost producer in both the current medical framework and future recreational framework.”
Mr. Zandberg currently has a “Buy” rating and a one-year price target of $8.00 on Aphria, implying a return of 19 per cent at the time of publication.
The analyst thinks Aphria will post EBITDA of $4.16-million on a topline of $20.2-million in fiscal 2017. He expects these numbers will improve to EBITDA of $14.9-million on revenue of $42.2-million the following year.
Mr. Zandberg says Aphria is at or near the top of its peers with regards to a key metric.
Read more at cantechletter.com
Disclosure: Neither the author nor any of the principals at Small Cap Power, or their family members, own shares in any of the companies mentioned above.
The Content contained on this page (including any facts, views, opinions, recommendations, description of, or references to, products or securities) made available by SmallCapPower/Ubika Research is for information purposes only and is not tailored to the needs or circumstances of any particular person. Any mention of a particular security is merely a general discussion of the merits and risks associated there with and is not to be used or construed as an offer to sell, a solicitation of an offer to buy, or an endorsement, recommendation, or sponsorship of any entity or security by SmallCapPower/Ubika Research. To read more of this Disclaimer please click on the button below:
