They have a great product. Their orders tend to be lumpy. The US is probably going to ramp up later this year or next and then orders will get bigger. They had some production issues but they have figured all that out before going into the US. Management has large holdings. (Analysts’ target: $2.50).
Their numbers are fantastic from a yield point of view. They are US operators but listed in Canada. They just built a second facility. They are already one of the biggest players there. They just acquired a company that does extract product in California. Following this the PE will be less than 9 times.
It has been drifting over the last three or four months. They will just move into sales this year. They continue to execute. He thinks you will see a fair amount of news flow later this year. The cellular networks are quite excited by their product. He thinks there is lots of future and the story really hasn’t developed yet.
Over the last 12 to 24 months has had a number of reimbursement cuts or rumours of them. It is now trading at a cheap valuation. Assuming no more cuts, then they should be starting to build on that. In recent earnings surgical centers were stronger than analysts expected. They have a new product to roll out the second half of this year. It is an at-home dispensing product. It'll be a 2019 story in terms of the uptick.
Market. Small caps are generally more volatile because their earnings are not as diversified as a bigger company, and there is a lot less volume and institutional coverage. He is launching a Cannabis open-ended fund. Some of the technical signals he looks at are showing the sector has bottomed and will start to move up. There is a scarcity of Marijuana stocks globally, even if not in Canada. The next catalyst could be global investors.