The Motley Fool

Is Aphria (TSX:APHA) About to Topple Aurora Cannabis (TSX:ACB)?

Image source: Getty Images.

It seemed like for months that Canopy Growth was the only cannabis stock worth mentioning in the business world. Every quarterly earnings report in the cannabis sector always linked back to Canopy and its performances. That is, until last week when things changed.

That’s because Aurora Cannabis (TSX:ACB)(NYSE:ACB) became big news by signing a deal with Nelson Peltz, a billionaire who will be advising the company in making more strategic deals with partners.

The deal sent Aurora’s stock up about 10.5%, but since the news broke the stock has continued its upward trend, reaching a peak of 25.5% growth since Peltz’s announcement.

But is Aurora the only cannabis company that could see a further boost in its future?

Along comes Aphria

Back in the early days of the new year, Aphria (TSX:APHA)(NYSE:APHA) also sent cannabis stocks soaring after reporting a solid earnings report, with analysts expecting something far less impressive than the $54 million in net income the company reported. Its next earnings date is just around the corner in mid-April. So, should investors be looking to this cannabis company for the next stock pop?

Let’s look at where Aphria sits right now. The company recently reported that Health Canada granted Aphria a licence amendment that permits it to start production in its 800,000-square-foot facility as part of its Part IV and Part V expansion. This puts it in a prime position to go global and reach its target production of 255,000 kilograms by the end of 2019.

It’s this prospect of growth that should really excite potential investors. Once the company amps up production with these expansion projects, the stock should finally see some more upward motion. As of right now, the stock remains undervalued at its current price of about $13.50 per share, according to analysts. Instead, they put its worth closer to $15.

If production really gets going, investors could see the stock rise, and quickly. By the end of 2019, analysts are predicting it could jump as high as $25 a share. If you put that in perspective, that means you could turn a $5,000 investment into more than $9,000 by the end of this year!

Of course, all of this isn’t a sure thing. Nothing in the stock market is. But Aphria definitely has a chance to make some big moves in the near future. And with historical earnings remaining positive in the last few quarters, investors should be able to expect more good things coming their way from this company.

What about Aurora?

Did you miss the boat on Aurora Cannabis? Personally, I don’t think so. The news of Nelson Peltz is only the first step for this company. I think investors can expect some announcements in the future that could make them very excited. Also, as my American colleague Keith Speights pointed out, Peltz will receive nearly 20 million stock options from the company at $10.34 per share. That alone would make him want the stock to do well, but he also will receive those options on a faster time table if the stock should start to soar!

So, while I’d wait for the hype around Aurora to calm down and the stock to dip a bit before buying again, at this point, I’d still choose it over Aphria. The company does have a potentially exciting future, but Aurora’s just looks a bit more solid.

Just Released! 5 Stocks Under $49 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $49 a share.
Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.
Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe owns shares of Aurora Cannabis and Canopy Growth.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss an important event.

Iain Butler and the Stock Advisor Canada team only publish their new “buy alerts” twice a month, and only to an exclusively small group.

This is your chance to get in early on what could prove to be very special investment advice.

Enter your email address below to get started now, and join the other thousands of Canadians who have already signed up for their chance to get the market-beating advice from Stock Advisor Canada.