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.
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.
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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…