Note: Amounts expressed are in Canadian dollars unless otherwise noted.
Where We Are
In my previous Aphria (NYSE:APHA) (TSX:APHA.TO) article, published in late February, The Aphria Rebuttal: It's Time To Move On, I presented a long thesis highlighting how undervalued the company was relative to its peers. I also discussed some of the catalysts that could move the share price positively if those catalysts were achieved. I still believe that Aphria has been fundamentally undervalued by the market, with respect to both its current operations and long-term growth potential. Aphria continues to be an undervalued Canadian LP that was temporary held down by short seller allegations and does not appear to have been rewarded by the market for some of its recent positive news.
The one item that was highlighted as a catalyst that has come to fruition was the Health Canada approvals for its Aphria One facility, specifically the Part IV and V expansions. This approval, received March 4, 2019, I believe, should have garnered a bit more positivity from the market, as the magnitude of the expansion is quite impressive, "The 700,000 square foot Part IV Expansion and the 100,000 square foot Part V expansion represent the completion of Aphria’s five-part expansion at Aphria. Once in full rotation, Part IV and Part V will produce on an incremental annualized basis 80,000 kg bringing the total annualize production capacity at Aphria One to 110,000 kg." Source: Aphria Press Release. It seems, however, based on the resulting price action, that these approvals were essentially already priced into the stock. Prices are relatively unchanged from the time of this announcement and there have not been any considerable negative catalysts since that point in time to justify the lack in price movement.
The 6-month chart below shows the rebound in the share
