Critical Review: Aphria (NYSE:APHA) and True Drinks (NYSE:TRUU)

Torri Donley

Aphria (NYSE:APHA) and True Drinks (OTCMKTS:TRUU) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability. Institutional & Insider Ownership 9.6% of Aphria shares are held by […]

Aphria (NYSE:APHA) and True Drinks (OTCMKTS:TRUU) are both small-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, risk, valuation, dividends, analyst recommendations, earnings and profitability.

Institutional & Insider Ownership

9.6% of Aphria shares are held by institutional investors. 18.2% of True Drinks shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Aphria and True Drinks’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aphria $179.29 million 8.10 -$12.48 million ($0.11) -45.73
True Drinks $1.95 million 10.46 -$3.88 million N/A N/A

True Drinks has lower revenue, but higher earnings than Aphria.

Analyst Recommendations

This is a breakdown of recent ratings for Aphria and True Drinks, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aphria 0 0 8 0 3.00
True Drinks 0 0 0 0 N/A

Aphria currently has a consensus target price of $9.47, indicating a potential upside of 88.30%. Given Aphria’s higher possible upside, research analysts plainly believe Aphria is more favorable than True Drinks.

Volatility & Risk

Aphria has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500. Comparatively, True Drinks has a beta of 10.9, suggesting that its stock price is 990% more volatile than the S&P 500.

Profitability

This table compares Aphria and True Drinks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aphria 5.75% -0.30% -0.21%
True Drinks -255.80% N/A -165.86%

Summary

Aphria beats True Drinks on 7 of the 12 factors compared between the two stocks.

Aphria Company Profile

Aphria Inc. produces and sells medical cannabis in Canada and internationally. The company offers sativa, indica, and hybrid medical marijuana products, as well as cannabis oils. It serves patients and health professionals. The company also sells its products online. Aphria Inc. is headquartered in Leamington, Canada.

True Drinks Company Profile

True Drinks Holdings, Inc. markets and distributes nutritional supplement drinks. The company sells Bazi All Natural Energy, a liquid nutritional supplement drink through drinkbazi.com. It also formulates products containing CBD; and produces and distributes vapor products in approximately 90 countries. The company was formerly known as True Drinks, Inc. and changed its name to True Drinks Holdings, Inc. in October 2012. True Drinks Holdings, Inc. was founded in 2008 and is headquartered in Irvine, California.

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