Terra Tech, Corp. (OTCBB:TRTC) Still Depressed Despite Strong Earnings

Terra Tech, Corp. (OTCBB:TRTC) may get a boost as it struggles to take off. After markets closed yesterday, the company posted a fresh 10-Q, and the end of the trading week may reflect the event. Currently, TRTC stands at a round $0.50, more than 55% below its peak prices, but the new round of financials may reveal its advantage compared to other marijuana stocks. TRTC opened downward in the early minutes on Friday, toward $0.46.

TRTC posted incredibly optimistic news, citing a 700% increase in revenues compared to Q1 of 2013. We are not sure if the numbers already reflect marijuana sales, as TRTC still relies on greenhouse production, and investors even note that its main revenues come from reselling produce for a markup. In fact, TRTC makes almost no money from its own hydroponics systems, but only through the existing greenhouses of other producers. TRTC is the lease holder of the land where independent farmers care for the actual production, note forum commenters.

Still, the latest filing contains rather robust numbers:

• $2.969 million cash, compared to $26,900 at the end of 2013

• $8.41 million total assets

• $6 million total current liabilities

• $560,319 quarterly revenues

• $4.9 million net loss, compared to $1.5 million loss for Q1 of 2013

A it is easily seen, while TRTC is revving up its business engines, it is also burdening itself with more debt, and piling up losses on top. While the numbers may reveal a certain seriousness, there is still risk that TRTC fails as a marijuana company, and the stock price is shaken down by additional market forces.

Investors’ forums also believe that the good financial news would even hurt TRTC, as investors “sell the news” and send the ticker down to a price of just a few pennies, where it hovered before the big surge and enthusiasm surrounding cannabis companies. TRTC has a mid-range weight of 1.76% in the Marijuana index, and in a way the stock movements reflect also the general position of the industry-wide marker. Both TRTC and the index are drifting on a faction of their peak price.

TRTC will now have to face the challenge of a weekend, and will have to prove it can survive the selling pressures. Fortunately, there are few solid alternatives in the MMJ sector that are not affected by the foul mood, so TRTC may have yet another shot at price gains.

GreenGro Technologies, Inc. (OTCMKTS:GRNH) also holds the potential of a seller of greenhouse and hydroponics systems. The ticker is affected by the same lack of enthusiasm, as it inched further downward, this time toward $0.245.

Another agricultural grower, Stevia, Corp. (OTCMKTS:STEV) was indeed sold off on the news. STEV posted optimistic harvest figures, but instead of easily peaking above 20 cents, it continued digging down even deeper, toward $0.15.

So if you believe growers have the upper hand in the MMJ sector, think twice, as any company could suddenly lose the confidence of investors and fall on bad days.