A third consecutive quarter of double sales growth could be the groundbreaking catalyst to strengthen Emerald Health Therapeutics Inc (OTCMKTS:EMHTF) sentiments and prospects in the market. The stock has already started bottoming out, after feeling the full force of short-sellers for the better part of the year.
OTCMKTS:EMHTF Price Analysis
After a 60% plus plunge, Emerald Health Therapeutics might as well have hit a bottom and due for a correction higher. Improving underlying fundamentals depicted by robust sales growth is one of the catalysts that continues to strengthen investor confidence in the stock.
In addition to sales growth, the company has also continued to bolster its balance sheet with capital raised through public offerings. The raising of additional capital leaves the company well-positioned and financed to pursue strategic initiatives expected to reinvigorate growth.
OTCMKTS:EMHTF has since bounced back from the $0.21 level, signaling a brewing uptrend. The $0.60 is the immediate resistance level standing in the way of the stock powering high from current lows. A rally followed by a close above the $0.60 should affirm the stock’s break out credentials from current lows.
Conversely, failure to take out the $0.60 level could leave OTCMKTS:EMHTF susceptible to further drops in continuation of the long-term downtrend. Considering a recent uptick in market sentiment amidst improving fundamentals, Emerald Health Therapeutics looks set to continue its bounce back.
Emerald Health is engaged in the production and distribution of medical cannabis in Canada. Formerly known as T- Bird Pharma, the company is also engaged in the production of natural health products as well as recreational and wellness-oriented products.
Sales Growth Boost
OTCMKTS:EMHTF market sentiments have ticked up in recent weeks on the company reporting impressive financial results for the three and nine months ended September 30, 2019. The company reported $9.3 million worth of sales for the third quarter, more than double, sales reported in the second quarter.
In addition to sales growth, the company reported a second consecutive quarter of positive EBITDA at $2.4 million as total SG&A expenses shrunk to $10.1 million from $12.4 million. However, the company plunged to a $17.5 million net loss impacted by $2.8 million in inventory write down.
Emerald Health Therapeutics 50% joint venture Pure Sunfarms was also on a roll reporting a fourth consecutive quarter of positive EBITDA. The joint venture reported $24 million in net sales helped by a 50% increase in sales volume.
In addition to sales growth and positive EBITDA, Emerald Health Therapeutics achieved key milestones in the quarter that continue to affirm long-term prospects. Top on the list was the expansion of shipments to ten provinces and territories, expected to continue facilitating revenue growth. Likewise, the company’s joint venture Pure Sun Farms rose the ranks to become one of the most competitive producers of high-quality CBD in Canada.
OTCMKTS:EMHTF has also confirmed it expects an increase in cannabis production following the planting at its wholly owned indoor premium facility. The company also continues to strengthen its product line with the unveiling of a new line of oil and pre-roll products.
In a bid to shore up the balance sheet and bottom line, the cannabis-focused company completed restructuring in the third quarter that resulted in the reduction of the workforce. Internal re-organization should allow the company to streamline operations crucial to enhancing efficiency and productivity
“Our primary asset, our 50%-owned Pure Sunfarms joint venture, has rapidly distinguished itself as a high-performing asset. We are putting our energy into building out complementary business opportunities with distinct positioning to meet the needs of adult-use and wellness-oriented consumers, and taking steps to realize positive cash flow and achieve profitability in 2020,” said Riaz Bandali, President and Chief Executive Officer of Emerald
Separately the company has closed a $2.5 million secondary sale that further strengthens the balance sheet. The capital injection should allow the company to pursue strategic initiatives crucial to generating long-term value.
OTCMKTS:EMHTF is increasingly showing signs of recovering after a harrowing plunge. The stock’s market sentiments have received a boost as robust sales growth continue to affirm the core business as well as long-term prospects.
Recent price action activity provides evidence that a positive trend is materializing on the stock hitting a bottom. With the stock currently trading at a discount relative to strong fundamentals and long-term prospects, it is highly likely it will continue to power higher from current levels.
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Disclosure: We have no position in OTCMKTS:EMHTF and have not been compensated for this article.
What Do Investors See In Medical Marijuana Stock (OTCMKTS:MJNA)?
Medical Marijuana Stock (OTCMKTS:MJNA) has emerged as one of many investor’s favorite pot stocks in the legal cannabis universe in 2020. The stock is already up about 10% in 2020, demonstrating how investors have warmed up to the stock early on in the New Year.
Following a disastrous 2019, cannabis investors lost money but have also learned that their best bets are stocks with strong fundamentals. They are looking for companies that have positioned themselves well in the cannabis industry and have what it takes to go for the opportunities. That is why MJNA stock is catching a lot of investor attention in 2020 because of how it has positioned itself in the cannabis market.
Robust revenue growth and strong financial position have also helped put MJNA on the radar of investors hunting for quality cannabis stocks. Revenue at MJNA more than doubled from $26.5 million in 2017 to $60 million in 2018. MJNA is also not in financial distress as may be the case with other cannabis companies out there. The company finished the third quarter, the most recent reported period, with $5.5 million in cash reserves.
Moreover, MJNA has recently taken steps to expand into new international markets and invest in companies that are leaders in their segments. These prudent actions are helping lift Medical Marijuana stock as more investors learn about them.
About Medical Marijuana stock
Is Tilray Inc (NASDAQ:TLRY) A Buy Or Sell?
For Tilray Inc (NASDAQ:TLRY) and the rest of cannabis stocks, 2019 was no doubt a bad year. But 2020 is shaping up to be a promising year for the stock. To start with, Tilray stock has already gained 8.35% year-to-date. If that says anything, it shows following the broad selloff in Tilray stock last year, we’ve got to a point where sellers are giving way to buyers in the stock.
There are several catalysts that should continue driving NASDAQ:TLRY as you’re about to see. First, below is a brief profile of the company we’re discussing.
Tilray is a Canada-headquartered global cannabis company. It is engaged in activities of cannabis cultivation and processing as well as marketing and distribution of cannabis products. Tilray already has several cannabis products brands to its portfolio. It operates across five continents through subsidiaries in Canada, Australia, Germany, and Portugal.
Following the broad collapse of cannabis stocks in 2019, investors are looking for cannabis stocks that can make a positive impact on their portfolios in 2020. Tilray stands out as an attractive cannabis stock pick in 2020. Here are some of the exciting things about the company.
Tilray CEO sees a bright future for the cannabis industry
On January 25, Tilray CEO Brendan Kennedy spoke on Bloomberg. In that interview, Kennedy framed a rosy outlook for the…
Is Cronos Stock (TSE:CRON)(NASDAQ:CRON) A Buy?
Cronos Stock (TSE:CRON)(NASDAQ:CRON) stock fell 9.22% on January 24, marking its steepest decline so far in 2020. The stock plunge followed an important disclosure that you would only expect from a company that is trying to be straight and transparent with investors. Here’s what happened.
On January 22, after market close, Cronos made a regulatory filing detailing changes in its executive team. In that SEC filing, Cronos revealed that David Hsu and William Hilson have stepped down as its chief operating officer and chief commercial officer, respectively. Unfortunately, some investors read bad news in the executive exits and sold their shares in Cronos.
But a careful reading of the filing doesn’t seem to raise any red flags. Therefore, the big stock plunged points to investors panicking to the degree of responding to a mosquito bite with a missile.
There is no doubt that 2019 was a difficult year for cannabis stocks and Cronos Stock is no exception. But before the uncalled for reaction to Cronos’s regulatory filing, we had been at a point where sellers were starting to give way to buyers in Cronos stock. The stock has gained about 8.0% in the past one month. It had gained more than 13% year-to-date before the January 24 big selloff.
About Cronos Stock
Cronos Stock is a Canada-based global cannabis company. Cronos operates through subsidiaries and…