A recent article on BNN market Call highlighted Mettrum Health Corp. (TSXV:MT.V).
Canada faces a major political challenge in determining whether there is the political will to build any pipelines in the face of determined, although not unified, opposition from environmental and Indigenous groups. For a federal government committed to rebuilding infrastructure, it is odd that oil by rail as the default choice would be acceptable.
We are in a lower-for-longer economic environment in terms of economic growth, interest rates and commodity prices. However, we expect a strong finish to 2016 in North American equity markets following the U.S. presidential election.
Mettrum Health (MT.V)
- Mettrum has 16,000 patients and has established itself as one of, if not the, strongest medicinal players. Company has perhaps the best reputation amongst physician community.
- Industry is growing at 10 per cent month-over-month and Mettrum is maintaining its market share of approximately 12 to 15 per cent.
- Company is fully licensed at two facilities with limitless ability to increase capacity.
- Running at 70 per cent gross margins.
- Cash of over $30 million.
- Well positioned to participate in recreational market, which is expected to be rolled out next year.
- Company has a market cap of $150 million versus Canopy at $460 million, despite Canopy having 2,000 patients and similar operating metrics to Mettrum.
- Aphria has half the patients and twice the market cap.
- Handful of other new entrants with a fraction of the business of MT also trade at $150 million market cap.
- Massive valuation discrepancy between MT and the other players.
- Starting to think this space if getting a bit ahead of itself, but Mettrum continues to look like exceptional value and the best way to play the space.