In the last three instances of our coverage (here, here, and here) for Aleafia Health Inc (OTCMKTS: ALEAF), we have insisted on the potential for the company to offer investors an opportunity to buy at a discount. Although the stock seems to be steeped in a bear market, the following analysis should help one to decide what next.
Aleafia Share Price Analysis
During the opening trading sessions for 2019, ALEAF stock traded at $1.22, 28.4% higher than the lowest value established in December 17, 2018. The stock then rallied 72% and touched a high of $2.10 on February 5, 2019. Sadly, the price remains elusive since then and even chances of attaining that peak are growing minimal as the current bear market persists.
The ongoing price action is surprising if evaluated from the context of the strategy the company has put in place. Further, there is a lot of positive developments in terms of sales, revenues and expansion which should nudge the price action in the opposite direction. In one of our previous analyses, we noted that the company was approaching the completion of Phase II expansion of the processing facility in Paris, ON. This would avail an additional 50,000 kg extraction capacity.
Also, the company recently brought its Outdoor Grow facility to plan-ready after expansion. The company anticipates to the expanded facility to produce around 60,000 kg of dried flower annually. Meanwhile, the company has already submitted the final evidence package to Health Canada after which the facility will be operational. Aleafia anticipates to spend less in terms of cost of production compared to indoor growing or use of traditional greenhouse technique.
Positive investor sentiment for the stock still held down by weak financials for full year 2018
Previously, we also noted that the expansion of the Aleafia Campus Processing and extraction was in progress and on completion, the extraction capacity will jump to 50,000 kg. At the same time, the dried flower processing capacity will also be boosted to 138,000 kg on annual basis.
Also, the company is reaching into international markets with a view on leveraging the booming cannabis industry. In early May, the company partnered Acnos Pharma GmbH, a pharmaceutical wholesaler based in Germany, in a deal aimed at availing ALEAF products into the new market.
In light of such developments, one expects the stock price to reap the dividends of positive sentiment but this has not happened in ALEAF’s case. Perhaps there is a reason. While reporting the full year 2018 financial results, ALEAF noted that revenue loss in full year 2018 was wider than full year 2017. In particular, the company lost $18.5 million CAD in 2018 compared to $9.69 million CAD in 2017. Also, the company recorded a rise in revenue by a mere $15,766 CAD.
Fearing worse for 2019, investors punished the stock through a sell-off which saw the share price plunge 4.2%. Since then, the stock has never achieved the $1.34 price after the sell-off. Therefore, it suffices to say that investors are still suffering the hangover of the weak figures.
About Aleafia Health
Aleafia Health is a vertically integrated company with interests in the wellness and cannabis health sectors. Primary business is divided into Health & Wellness Clinics, Cannabis Cultivation & Products, Consumer Experience and Cannabis Education.
In its latest corporate update, ALEAF confirmed the completion of an all share transaction which culminated in the acquisition of Emblem. As such, the company is better placed to accelerate its strategy. Part of the strategy includes creation of a medical cannabis clinic complete with an education center network which will serve 60,000 patients. Also, the company will continue to differentiate its product portfolio and to scale up production capacity.
Clearly, Aleafia is not only interested in dominating the local market in Canada. In the corporate update, the company revealed efforts to expose its products in Germany through a partnership with Acnos Pharma. This latest move comes hot on the heels of a similar partnership to leverage the potential of the Austrian cannabis market.
Innovative research and improvement profile in the market
Since mid-March, ALEAF trades on the Toronto Stock Exchange. The listing on TSX will strengthen the company’s liquidity position in addition to the revenue from the international ventures. Also, the company is set to leverage the tons of data it collects from patients to publish research papers for internal strategic benefit and to expand knowledge in the industry.
What next for Aleafia Health?
From the analysis, it is apparent that ALEAF is trading at a discount and that the current bear market is a needless fixation on the poor financials for the full year 2018. There are clear strategic moves which, if the market takes note, the share price will catch a huge momentum which will propel it to new highs.
In the meantime, investors are better off remaining patient.
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Disclosure: We have no position in ALEAF 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…