The Conversation (0)
In Part II of the series, Peter Epstein of Epstein Research highlighted the Naturally Splendid (TSXV:NS,FWB:50N,OTCQB:NSPDF) press release published on March 9, clarifying the technical jargon used by speaking with CEO Craig Goodwin and Director David Racz. Mr. Epstein also said that investors should take note of Naturally Splendid because, “A key thing that I hope readers recognize is that a trailblazing purchase order could come at any time. As a writer also covering mining and metals, I can assure you that key milestones are typically months or years away. Not so with Naturally Splendid. When (not if) a bulk purchase order of hemp omega is announced, the stock price could spike.”
As quoted in the article:
Let’s see now, “enzymatic synthesis of cannabinoids,” “cannabinoids catalyzed from Cannbigerolic acid,”the natural synthesis that occurs in the plant’s bio-pathway. Cannabinoids produced in the bioreactor are pharmaceutical grade purity (>99%)” Call me crazy, but I for one don’t understand what this means. And neither did my spellcheck. Rest assured, key management members and esteemed corporate partners do know. I chastised CEO Goodwin about the highly technical and jargon filled press release. His response, and David Racz was on the phone as well, was that the press release was geared towards multiple parties because regulators always want to see more information, not less. Further, the press release contained material information that was required to be shared with readers, no matter that it happened to be written in Geek. I’m hoping to get management to do an investor conference call next whereby shareholder questions can be addressed, hopefully in plain English.
… So, having delved into the exciting CBD extraction area, let’s get back to the investment opportunity. A key thing that I hope readers recognize is that a trailblazing purchase order could come at any time. As a writer also covering mining and metals, I can assure you that key milestones are typically months or years away. Not so with Naturally Splendid. When (not if) a bulk purchase order of hemp omega is announced, the stock price could spike. NSP.V hit an intra-day high C$ 0.51 on March 4th, largely due (in my opinion) to the expectation of the announcement of a large purchase order. C$ 0.51 is 50% above the current price of C$0.34. Yet, the market cap of the company is about C$ 15 million.
If Naturally Splendid can execute on its announced initiatives, whether or not the stock is at C$ 0.51 or C$ 0.34 might be irrelevant. In the company’s corporate presentation sales guidance for 2015 is C $21 million. Therefore, Naturally Splendid is trading at less than 1x forecast 2015 revenue for a company that could generate multiples of that revenue estimate as early as next year. Many early-stage companies capable of rapid growth, come with commensurate risk of downside. In my opinion, the fundamental downside of Naturally Splendid is low. Why? The company is already in production, with retail sales in hand and warrants being exercised. Sales from the growing retail line alone could allow the company to approach break-even cash flow by year end.
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