Marijuana Stocks: The Biggest U.S. Reporting WINNERS Over The Past 12 Months - Part II

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Includes: CARA, CBIS, CLSH, CODI, CSAX, CVSI, GBLX, GWPH, INSY, NGBL, OGRMF, PLPL, PMCB, STEV, TURV
by: Anthony Cataldo

Summary

There are N=74 stocks in the “US Reporting” Marijuana Index; I tri-chotomized the population into (1) losers, (2) winners, and (3) no change samples.

Thirty (41%) of the N=74 stocks have increased in price-per-share over the 12-month period ending February 14, 2016.

Thirteen (43%) of the thirty “winners” have positive working capital positions, the first and most important “liquidity” measure, in terms of additional, near-term financing needs.

Therefore, there is no immediate need for additional debt or equity financing (or dilution) for these firms examined in this article.

Five (5) of the 13 were examined in PART I; the remaining eight (8) are examined in this article – PART II.

This is PART II of a 2 part series, where the remaining n=15 of N=30 stocks are examined. PART I is here.

I examine liquidity and future prospects, based on fundamental measures, for U.S. Reporting marijuana stocks that have increased in price-per-share over the past 52-weeks. It was my hope that I could identify some upside momentum in its infancy that could lead to profitable entry and stock price appreciation. I cannot recommend even a single one of the stocks, at current price-per-share levels, despite their positive working capital positions.

Below is the chart for the Marijuana Index of U.S. Reporting firms for the 52-week period ending February 14, 2016:

Click to enlarge

Note that the firms examined in this article are 52-week "winners" and outperformed the index over the past 52-weeks (see above).

Below is a table, developed from the above, Marijuana Index website, where market capitalization (market cap) is provided in millions of U.S. dollars. This data was captured on February 16, 2016:

Name

Symbol

Last

Chg

% Chg

High

Low

Market Cap

16

Cara Therapeutics Inc

(NASDAQ:CARA)

$7.4600

$0.2500

3.47%

$7.4800

$6.8200

$203.15

17

Stevia Corp

(OTCPK:STEV)

$0.0155

$0.0005

3.33%

$0.0178

$0.0150

$3.07

18

Cannabis Science Inc

(OTCPK:CBIS)

$0.0131

$0.0004

3.15%

$0.0135

$0.0125

$18.50

19

PharmaCyte Biotech Inc

(OTCQB:PMCB)

$0.0655

$0.0017

2.66%

$0.0665

$0.0622

$49.18

20

Cannavest Corp

(CANV)

$0.1380

$0.0030

2.22%

$0.1380

$0.1225

$4.86

21

Insys Therapeutics Inc

(NASDAQ:INSY)

$16.9900

$0.2800

1.68%

$17.6450

$16.1500

$1,220.00

22

Medbox Inc

(MDBX)

$0.0125

$0.0002

1.63%

$0.0135

$0.0116

$1.43

23

Plandai Biotechnology Inc

(OTCPK:PLPL)

$0.0500

$0.0007

1.42%

$0.0500

$0.0500

$8.03

24

GW Pharmaceuticals Plc

(NASDAQ:GWPH)

$44.6400

$0.4400

1.00%

$44.9750

$42.3501

$971.59

25

CLS Holdings USA Inc

(OTCQB:CLSH)

$1.2100

$0.0100

0.83%

$1.2100

$1.1990

$24.28

26

OrganiGram Holdings Inc

(OTCQB:OGRMF)

$0.4680

$0.0037

0.80%

$0.4700

$0.4567

$26.36

27

Compass Diversified Holdings

(NYSE:CODI)

$14.2000

$0.1000

0.71%

$14.2900

$14.0000

$771.06

28

CSA Holdings Inc

(OTCPK:CSAX)

$0.3520

$0.0020

0.57%

$0.3900

$0.3520

$35.29

29

GrowBLOX Sciences Inc

(OTCQB:GBLX)

$0.1595

$0.0005

0.31%

$0.1595

$0.1500

$7.46

30

Two Rivers Wtr & Farming

(OTCQB:TURV)

$0.6000

$0.0010

0.17%

$0.6500

$0.5400

$16.15

Subtotal

$3,360.41

ADD: PART I

$212.04

TOTAL in millions of dollars

$3,572.45

Click to enlarge

In aggregate, the market capitalization for the above 15 firms exceeded $3.4 billion and all 30 stocks have a market capitalization in excess of $3.6 billion.

A chart developed from combined PART I and PART II tables, and focusing on the 52-week percentage change in the firm's stock price, was presented in PART I. It is provided, again, below:

Liquidity

Eight of the 15 firms examined in the second installment of this 2 part series have positive working capital positions, based on Yahoo!Finance measures and their current ratio on February 16, 2016. The n=8 in this part are:

  1. Cara Therapeutics Inc
  2. Stevia Corp
  3. PharmaCyte Biotech Inc
  4. Cannavest Corp
  5. Insys Therapeutics Inc
  6. GW Pharmaceuticals Plc
  7. OrganiGram Holdings Inc
  8. Compass Diversified Holdings

Additional details and a 1-year chart for each firm developed on February 18, 2016, and after the trading day, follows:

1-Cara Therapeutics Inc

Cara Therapeutics is generating net losses and negative cash flows from operations through September 2015. I view this stock at too risky, and I have read the cautionary notes published in this Seeking Alpha article.

There are too many other good stocks to select from for me to consider this firm's stock for a long-term buy-and-hold.

2-Stevia Corp

Stevia has not provided financials since December 2014. Favorable liquidity measures are not updated.

3-PharmaCyte Biotech Inc

PharmaCyte Biotech has no revenues and is generating negative cash flows from operations through September 2015. On February 23, 2016, PharmaCyte Biotech issued a press release regarding preparations for its Pancreatic Cancer clinical trials. There are a massive number of comments on the Seeking Alpha board and relating to the most recent article from an SA contributor, suggesting that this stock is nothing more than a "pump and dump."

Again, there are too many other good stocks to select from for me to consider this firm's stock for a long-term buy-and-hold.

4-Cannavest Corp

Cannavest is generating growing revenues and gross profits, but continues to generate net losses and negative cash flows from operations through September 2015. Stock-based compensation of $4 million is quite significant and I never like to see this when combined with such a significant decline in the stock price. I suppose I might consider this stock for a day-trade on an anticipated bounce, but not as a long-term buy-and-hold.

5-Insys Therapeutics Inc

Insys Therapeutics is growing revenues, has a superior gross profit, and is generating net income and positive cash flows from operations through September 2015. Paul Santos has covered this stock, in the form of a pair trade. He remains negative on Insys Therapeutics, so I will follow his advice and proceed cautiously before initiating any long-term buy-and-hold position in this firm's stock.

6-GW Pharmaceuticals Plc

GW Pharmaceuticals continues to generate operating losses through the year ended September 2015. Improvements in revenue or "top line" growth have been more than consumed by increased research and development expenditures and expenses.

While this firm may represent a buy and long-term hold at some future point in time, the stock price decline does not suggest to me that this represents an appropriate time for entry into a long-term position.

7-OrganiGram Holdings Inc

OrganiGram is generating revenues and positive gross margins, with reduced net losses through November 2015. This firm may be about to "turn the corner" with respect to profitability.

Cash flows from operations remain negative, but the firm is exceeding previously publicized revenue growth measures.

This stock interests me enough to put on my "watch list," for consideration as a long-term buy-and-hold.

8-Compass Diversified Holdings

Compass Diversified is generating favorable gross profits and net income through September 2015. There is a "quality of earnings" issue with respect to the most recent quarter, as the vast majority of these earnings (and gains) were generated from discontinued operations and cannot be relied on to be repeated in future periods. So, while cash flows from operations are positive, they may prove to be in jeopardy in future periods.

The firm's stock price has appreciated over the past trading week. This stock is worth investigating for a long-term buy-and-hold.

Summary

The objective of this article was to (1) begin with U.S. Reporting marijuana stocks, (2) identify the "winners" over the past 52 weeks, and (3) more closely examine the 8 firms identified with positive working capital positions, in PART II of this series. OrganiGram Holdings and Compass Diversified Holdings interest me, but I will not be purchasing any of these stocks in the immediate or near-term.

Instead, while I have focused on U.S. Reporting marijuana stocks for my last 3 articles on Seeking Alpha, I will focus on U.S. Non-Reporting marijuana stocks over the next few weeks. The latter have experienced a meteoric increase in index value since calendar year-end and this performance may be a function of the "January effect." I intend to investigate this "seasonal anomaly" as it relates to these stocks and this sector of the economy (see below, from February 22, 2016):

Click to enlarge

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.