Buy rating for APHA reconfirmed
Aphria Continued to Fall despite the Company's DefenseByAdam Jones2 hours ago Aphria fell On December 4, Aphria (APHA) (APHQF) continuedto fall. There were negativeremarks that the companydiverted investors funds to companies in Latin America that were linked to insidersat inflated values. Aphria lost almost 21.2%on December 4. The stock fell to 5.99 Canadian dollars from 6.6 Canadian dollars. Aphria defends the acquisitions Early on December 4, Aphria issued apress releasedefending its acquisitions in Latin America. The company tried to boost investors confidence by purchasing shares worth $3.1 million. The companys CEO, Vic Neufeld, provided more details about the companys Latin America business. He stated that the company has invested in building its operations with about 100 employees in the region. The company has interests in Columbia, Argentina, Brazil, and Jamaica. Aphria stated that it was transparent in its disclosures about insider holdings. The prices that the company paid for the acquisitions were comparable with other deals in Latin America. Investors werent fazed Despite Aphriasstatement and the companys confidence in the business, investorswerent fazed. The sell-off continued throughout the day on December 4. International markets will be key for cannabis companies (HMMJ) including Aurora Cannabis (ACBFF), Canopy Growth (WEED), and Cronos Group (CRON). Next, well discuss other developments related to Aphria. Law Firms Investigate Aphria for Potential ViolationsByAdam Jones2 hours ago Law firms investigateAphria Due toAphrias(APHA) (APHQF) broad sell-off, several investors lost their investments. The investments might not be recovered if the claimsagainst the company are true. As a result, Johnson Fistel LLP, a law firm, announced that its investigating Aphriafor possibly violating the securities law. Ina statement, the law firm soughtinformation related to violations from thepublic and past employees. Johnson Fistel LLP also encouraged investors that suffered losses to contact the firm. Other firms that are also investigating Aphria includeFaruqi & Faruqi LLP,Bronstein, Gewirtz & Grossman LLC,Rosen Law Firm,Bernstein Liebhard LLP,Kaskela Law LLC, andKaplan Fox. International strategy The allegations against Aphria are beginning to poke holes in the companys international strategy. Aphria aims to establish markets in Europe, Africa, and Pan Asia. The latest developments against Aphria constrict the companys ability to raise capital and fuel its international growth. Aphrias struggles could benefit Canopy Growth (WEED), Aurora Cannabis (ACB) (ACBFF), Tilary (TLRY), and Cronos Group (CRON)the top companies in the crowded cannabis industry. The industry includes more than 130 licensed producers (MJ) in Canada alone. Next, well discuss analysts ratings and downgrades for Aphria on December 4 Analysts Downgrade Aphria amid Possible ViolationsByAdam Jones2 hours ago Trading halted On December 4, the NYSE halted Aphria (APHA) (APHQF) in the pre-market session. Thetrading resumed after Aphria clarified allegations about its Latin America business. Target price downgrades On December 4, Aphria received major target price downgrades amid allegations that the company might have violated the securities law. Haywood cut the companys target price to 17 Canadian dollars from 30 Canadian dollars, which represented a steep decline of 43%. Haywood maintained a buy recommendation on the stock. The overall consensus target price, as indicated in the above chart, was also lower on December 4. The consensus target price was 22 Canadian dollarscompared to the previous target price of 24.3 Canadian dollars. The overall consensus recommendation on the stockwas still a buy on December 4 despite the lower target price. In the above chart,you can see that three analysts maintained a strong buy on Aphria, while five analysts maintaineda buy on the stock. Other cannabis stocks that also carry a buy recommendationare Canopy Growth (WEED) (CGC), Aurora Cannabis (ACB) (ACBFF), and Cronos Group (CRON). In contrast to these stocks (HMMJ), Tilray (TLRY) has a consensus hold recommendation on the stock in December.