Hemp Inc (HEMP)

[Det_Robert_Thorne]

Overpriced at $0.05, no matter the metric

Even at $0.05, HEMP is overvalued by at least 50%, no matter how you look at it.

Let's try book value per share, or assets minus liabilities divided by shares.

HEMP claims Assets of $4.35M, but $1.8M of that is referred to as "LPO software", which has been described in HEMP's reports from 2011 and 2012 as a social media platform it was supposedly using when it was known as Marijuana, Inc, and the business model involved social networks. Now, it farms out its web presence to another company, and that software is five years old. It should have been written off the books years ago.

Subtracting the LPO software, HEMP's true assets are $2.842M.

Liabilities are $1.351M, and Assets minus Liabilities are $1.473M.

The Book Value per share is $1.473M/398.62M, or $0.0037/share.

The current price is 15X the book value. That's much too high.


How about Price/Sales? Hemp will do less than $200K revenue in 2015, and it's market cap as of today's close is $22.3M. That puts the price/sales ratio at 111. Again, much too rich.

Finally, the PE ratio, which is uncalculable, because HEMP is losing money.

Considering that HEMP's decorticator won't provide revenue until sometime in 2016, and the kenaf market is unknown (though past history says it's not good,) paying more than $0.03 for HEMP is probably unwise.