There is still momentum in Medical Marijuana Inc (OTCMKTS: MJNA) after a recent rally. In our previous update in February on the company, we had anticipated that the stock is a bounce back play and that proved to be an accurate call.
Share Price Analysis
Our most recent update on MJNA, we noted that the current momentum in the stock should continue into the near term in the face of a bullish cannabis market. We further acknowledged that an upside action should continue to be likely given that the underlying fundamentals have turned bullish.
However, we cautioned investors to watch out for the stock if it fails to take out the $0.10 resistance level. Our belief was that such a failure would result in the stock trading sideways. Also, we advised that the stock would only turn bullish if it established support above $0.10. In the meantime, we anticipated the stock to trade above the $0.06 which it achieved on May 25.
True to our prediction, the stock was trading at $0.064, at the time of writing. This is to say that the stock is up 6.67% since our last article just three days ago!
In addition to the impressive Q1 2019 financials which we cited in our last article as the main driver of the upside action in the market, there are new developments which should inject more confidence in the stock. To be sure, the company now has the official nod from Bulgarian authorities to sell cannabidiol (CBD) products derived from hemp.
The EU is a very important market for MJNA and establishing a foothold in Bulgaria should help them launch their products in the bloc with ease.
Commenting on the development, Blake Schroeder, CEO of Kannaway, MJNA’s subsidiary, said, “As the EU continues to navigate its stance on CBD, we are proud to continue paving the way for the acceptance of CBD in Bulgaria just as we have in many other countries around the world. With this authorization, we hope that we can establish our company as pioneers in Bulgaria’s CBD industry and leaders in CBD education throughout Europe.”
Is MJNA undervalued?
As such, there should be sustained positive trajectory in the stock movement in the near-term as the market continues to find the correct footing to the stock. However, chances of the share price achieving higher price levels are high if the market realizes that the stock is actually undervalued.
In particular, Medical Marijuana just recorded breathtaking increase in revenues as well as profits. For most of MJNA’s rivals, their reported revenue growth ranges from 25% to 284%. For MJNA, the revenue growth was 92%, which puts it at the same level as most of the peers. Also, the companies report gross profit margins which are in the same range.
In light of this analysis, one cannot help but notice that MJNA is quite undervalued relative to rivals in the cannabis industry. Particularly, if one considers the gross profit margin and the revenue growth, the ratio of enterprise value to forward revenue should be way beyond 3.2x. If the company manages to get the ratio to 10x, there is a higher likelihood of the share price climbing past $0.21 for every share.
What Does Medical Marijuana Do?
Medical Marijuana prides itself as a company of firsts. The business has a global portfolio of hemp-derived CBD brands. It also conducts clinical research for CBD-based products and development of botanical drugs.
Like earlier noted, the company just received the official thumbs up to operate in Bulgaria via Kannaway, a subsidiary. With the authorization, Kannaway can import and sell its products in the country as well as exporting to authorized markets. Previously, we noted that the company is expanding its retail density in North America, its primary market through securing deals which will see the company’s subsidiaries operate 100 new retail stores.
Launching new products
Last week, on May 15, another MJNA subsidiary, Dixie Botanicals launched a CBD-based Isolate Tincture. The new product contains a cocktail of wellness substances like medium triglycerides (MCT) oil, CBD, and a natural orange flavor. In addition, HempMeds, another subsidiary, will exhibit a new product at the Sixth Annual Cannabis World Congress & Wellness Expo going down between May 30 and June 1 in New York. As such, investors should expect MJNA to continue surprising the market with record revenues going forward.
There are two key points that investor should note from the analysis. First, it is clear that MJNA is undervalued relative to its peers in the industry. As such, this implies that there is more potential for the stock to register higher values. Further, the current momentum triggered by the impressive financials should be able to propel the share price in near-term gains.
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Disclosure: We have no position in MJNA and have not been compensated for this article.
Terra Tech Corp (OTCMKTS: TRTC) A Bounce Back Play As Net Loss Narrows And Gross Margins Expand
Terra Tech Corp (OTCMKTS: TRTC) has retraced lower ever since it clocked 2019 highs at the end of the first quarter. The stock has crumbled under soaring bearish pressure. Amidst the steep pullback, the stock is a potential bounce-back play as it is currently trading at the lower end of a tight trading range.
Terra Tech Price Analysis
A plunge to the lower end of the $0.63 to $1 trading range leaves the stock in a precarious position. A plunge lower could elicit further selling pressure while a bounce back could result in the stock making run for this year highs.
In our view, the stock could bounce back on investors reacting to a string of positive developments that affirm the Company’s prospects. For starters, Terra Tech is fresh from launching a legal cannabis delivery services as it continues to pursue growth opportunities in California.
The Company is also fresh from delivering impressive financial results that indicate gross margin expansion as net loss from operations continues to narrow. The sale of Blum Desert is another development poised to strengthen the company’s financial position.
Terra Tech commencing cannabis sales to the adult use market should continue to excite investor’s, ideal for fuelling an upswing in the stock’s price action activity. With the stock appearing to have hit the floor after the recent pullback, a correction higher could be in the offing at the lower end of the trading range.
Namaste Technologies Inc (OTCMKTS: NXTTF) A Bounce Back Play On Robust Revenue
Namaste Technologies Inc (OTCMKTS: NXTTF) has had to contend with wild price swings, as investors reacted to delays in the filling of audited financial results and ousting of Sean Dollinger as the CEO. That could soon change, as the Company has come through and filled results that affirm robust revenue growth.
Namaste Technologies Price Analysis
However, concerns over widening net loss could hurt the stock’s sentiments in the market, at a time when it is in dire need of, groundbreaking catalysts to avert further slides. While the stock has bottomed out, it remains engulfed in a long-term bear trend.
The descending trend line could attract short selling pressure on the filling of negative news that arouse concerns about the Company’s long-term prospects. A spike to the $0.65 level essentially means the stock is at a critical resistance level.
Failure to rally and find support above the resistance level could elicit some form of selling that could see the stock trading sideways. Immediate support on any pullbacks from current highs is seen at the $0.40 mark.
A sell-off followed by a close below the $0.40 mark could result in Namaste Technologies resuming its downtrend, as has been the case for the better part of the past year. Conversely, a rally followed by a close above the $0.66 mark should pave the way for the stock to make a run for the $1.20 mark, seen as the next…
Cannex Capital Holdings Inc. (OTCMKTS: CNXXF) A Long-Term Play Despite Price Slump
A strategic merger with 4Front coming on the heels of Pure Ratios holding acquisition affirms why Cannex Capital Holdings Inc (OTCMKTS: CNXXF) prospects can only get better despite the recent price slump. The transformational events expand the Company’s operations into six U.S states signaling push for market value in the burgeoning cannabis sector.
Cannex Price Analysis
While Cannex has taken a significant hit in the market, it is still up for the year after an excellent start that saw it rally by more than 200%. The stock has since pulled lower in what appears to be a correction phase.
The ongoing pullback has since exposed the stock to a crucial support at the $1 a share level. A breach of the support level would leave the stock susceptible to further drops probably back to the $0.80 mark, a critical technical level.
For the stock to resume its uptrend, it first needs to rise and stabilize above the $1.20 mark, the immediate resistance level. The stock rallying and finding support above the $1.2 mark would open the door for bulls to fuel a rally back to 52-week highs.
Cannex is a diversified company that leases real estate properties and sells supplies to cannabis cultivators. The Company also offers financial services as well as branding and IP services to licensed cannabis operators. It is also focused on premium indoor cultivation extraction and branding of edible…