CannaVEST Corp (OTCMKTS:CANV) Bounces but Not by Much
It’s fair to say that there’s no shortage of badly performing pot stocks out there. The hype and excitement around the cannabis industry from the first half of 2014 sent many OTC tickers flying high. Unfortunately, not everyone realized that the prices were artificially inflated and, once common sense took over, a lot of companies lost colossal portions of their market caps. In that respect, CannaVEST Corp (OTCMKTS:CANV) was one of the worst performing stocks out there.
On February 21, the ticker peaked at a mind-boggling $201 per share. Currently, even though it gained around 8% yesterday, it’s still struggling to break through the $3 barrier. Quite a lot of money went down the drain during CANV‘s colossal crash and, not surprisingly, some investors were extremely angry with the company. We read in the latest 10-Q that people have even filed complaints alleging securities fraud against the management team. We’ll need to wait and see what will happen to the legal actions, but while we’re at it, we might as well have a look at the company and ask: “What if you want to invest in CANV right now?”.
There is one major downside – the stock is extremely unpredictable. If you take a look at the historical performance, you’ll see that volumes spikes are often followed by prolonged periods of next to no trading. There have been no horrific drops in the share price, but significant jumps are also non-existent and, as we mentioned already, staying above $3 per share for long is proving to be impossible at the moment. So, the stock is volatile and you don’t know what it’s going to do next. This is something that will probably deter those of you who want to cash in on some quick profits.
The people who are looking to invest in a solid business, however, will certainly think that CANV is an interesting proposition. The truth is, we can’t argue with the figures. Here’s what the company recorded on June 30:
- cash: $9.2 million
- current assets: $18 million
- current liabilities: $976 thousand
- quarterly revenues: $3 million
- quarterly operating income: $132 thousand
As you can see, especially by Pennyland standards, the 10-Q doesn’t look bad at all. The cash reserves are plentiful, there’s no significant debt, and the revenues and gross margins are nothing short of impressive. What’s more, when you compare the results for the reported period with the ones registered during Q1, you’ll see that CANV‘s sales have experienced a 14% jump.
If the company manages to keep up the good work, the volatility issues might be ironed out and CANV could finally become a solid investment opportunity. Unfortunately, some things suggest that, especially when it comes to revenues, the future reports might be a bit underwhelming.
A company called HempMeds PX, LLC, a subsidiary of Medical Marijuana Inc (OTCMKTS:MJNA), played a major role in CANV‘s successful quarter. HempMeds and CANV had a distribution agreement and the 10-Q tells us that it resulted in the majority of the Q2 sales. Unfortunately, on August 11, the aforementioned agreement was terminated which, the company says, “may have an impact on future revenues”.
This is something you should definitely consider while making your mind up on CANV.
