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Extractors don’t have anything proprietary other than their processes which matters less when they are producing what is essentially a commodity. Because of that, there is always a threat that the big guys take extraction in house (as some have done already, namely CGC). So in the long-term horizon that is the number one threat imo.
In the next few years, however, there is an abundance of opportunity. There are so many players in the space right now from a retail perspective and not nearly as many on the extraction side. And the small to mid sized companies may not have the capital or capacity to go into extracting. It’ll be interesting to see how those small to mid size retailers fare in the long term; some may not survive ultimately in this still developing market.
But back to the extraction side. As you said, the firm commitments and contracts spanning multiple years help provide steady cash flows and return. I also get the sense that the demand in this niche of the cannabis market greatly outpaces the supply. So that is why I’m very excited by Neptune. They clearly have a long term vision, which I love. They are rapidly expanding to what will essentially be a market leading extraction capacity, and this is before they’ve even really begun to start realizing revenues. They are preparing this company to be able to ramp up very rapidly which is exciting for a shareholder. Those who aren’t in the know will look at current performance (or lack there of) and miss the fact that this company is poised for explosive growth.
I see it a bit differently. They have stated that their 200,000 kg capacity was contracted, and they also know what they currently have contracted via existing SugarLeaf deals. The amounts would not be insignificant nor boastful to disclose in my opinion.
Early on before they had received licensing from Health Canada, it made more sense why they would shy away because they couldn’t guarantee any realization beyond the 30,000 kg they were approved on. But now that time has passed and they have a clearer picture of what the current baseline may be. Sure, they may not know how much or what price they will sell related to the excess capacity not yet finalized or approved via Health Canada, but they could at least provide some insight into earnings potential.
To this point, all they’ve disclosed is the very vague “$450m at 50% capacity sometime in the future” figure which to me is more boastful than providing transparent insight into what they currently have on deck. Hopefully this will change with the next earnings call. But again, I think the lack of visibility into their revenue/profit horizon is what makes this company look poor upon a quick look. People see the current period earnings (which are nothing) and have no documented guidance for future periods. Those that don’t carefully research and read between the lines will miss the value.
I would echo your sentiments in regards to extraction companies. I also feel like these companies have not had the inflated PPS related to the upcoming Cannabis 2.0 changes in Canada that the retailers have. If I’m right about that, then that added demand of new players entering the space and needing extraction services will be gravy on top of what we already have.
Neptune is interesting because they have been very tight-lipped. They haven’t announced the dollar value of their extraction deals whereas MediPharm has. They also have not provided any forward guidance. So it is a case where the dollar volume is already very low and the true value needs to be pieced together through careful research and analysis.
Once revenues become realized (remember, shipments for both of those deals — Tilray and TGOD — were stated to begin in September) and/or some forward guidance is given, that will make the value here easily digestible and bring in new investors. Until then, we will blow around like a leaf in the wind depending on what the sector does.
I myself have been using this as an opportunity to average down and with the long-term vision in focus I see this recent slide as a positive short-term opportunity rather than lamenting it as unrealized losses.
I hate to get in the middle of you talking to yourself, but want to point out your $1 PPS comment is a complete straw man. Nobody said the current state of the company supports a PPS like that, so why would that have any relation to current share price today? If and when a deal is secured this will grow rapidly — that is the point. In the meantime, price will fluctuate with little to no bearing on underlying value.
Given the position you’ve stated in the past that you hold here, your money says you think that will happen too despite your constant complaining in between. I think you are right in that but your shtick is tiresome and a large part of why I haven’t been reading or posting here lately.
No disagreement here. I own a significant number of shares. My bullish case is as follows:
1. Per private placement PR, their 200,000 kg capacity is fully contracted for fiscal 2020 and fiscal 2021. That is prior to their expansion via Phase IIIA and the SugarLeaf acquisition (expected to be 1,500,000 kg in Canada and 1,500,000 kg in U.S. by end of year).
2. As far as I can tell, maximum planned capacity is 7,500,000 kg. That is the 3,000,000 kg aforementioned along with the remaining approved 4,500,000 kg expansion for Phase IIIB in Canada.
3. Management recently stated that these two facilities could support revenues in excess of $450m at 50% capacity. They did not provide inputs / variables but my assumption is that is using the full planned capacity amount of 7,500,000 kg, meaning 3,750,000 kg extracted would equate to $450m in revenue. Taking this ratio, that implies minimum revenue of $24m annually for fiscal 2020 and 2021 based on 200,000 kg contracted. That would assume SugarLeaf has no existing sales and they cannot sell their excess capacity. However, it’s easy to see how something like $100m in revenue based on their capacity by end of year is easily achievable. In MediPharm’s most recent earnings call they mentioned there is no shortage of customers and that their phone is ringing off the hook; I expect the same is/will be true for Neptune once the capacity is online.
4. New CEO has significant ties to Unilever and specifically Schmidt’s Naturals (a Unilever brand) that just launched a hemp-derived product line. CEO tweeted about that launch, and the PR yesterday just happens to mention that one of the new customer relationships is a large nutraceuticals company in the U.S. which gives me reason to speculate we could be the supplier for this product line. Ben & Jerry’s is also a Unilever brand and they have announced they plan to have a line of CBD ice cream once FDA / the legal climate is settled. That could be another potential large scale customer for Neptune given the existing ties and our large capacity. To put it in perspective, MediPharm has only about 250 - 300k in capacity and they are making money hand over fist. We will blow them out of the water in terms of available capacity.
I could go on, but I will leave it at that. I usually don’t provide my DD to this degree but this board is dead and the stock is low volume enough that nobody is paying attention to how undervalued this is.
This stock is already beaten down so it probably won’t get hit as hard as others. But as long as it continues without news it will follow the sector more or less.
The charts account for the RS. If you were to look at the 1 year chart it would not show a huge price increase from the RS, it shows it at current levels. But yes it was recently at a 52 week low.
If you were asking if they had a split, the answer is the opposite actually. Generally a historical chart will be revised after a split / reverse split. So when you see $30 that was $3 prior to the reverse split.
Sorry for the late response. Yes, they had a 10-1 reverse split recently and they also had a public offering. Those two things are what has killed the share price.
Pulled back under $2 initially off the high of the day ($2.15) but rebounded and closed very near to it at $2.13 so I think tomorrow could be another big day; very bullish close in my opinion.
Pull backs could be big. Have to imagine there are a lot of flippers in this today. I will probably hold this one for a bit and watch. I think this could be the start of a reversal. The massive rebound and volume today (compared to normal) make me think the opportunity window is larger than just today. I have only been holding about a week or two myself ($1.86 entry) but not looking to get out just yet.
This has room to run. Also seeing rumblings that the first store will be open by 9/23. A poster on ST is claiming he called and they said they could schedule him then. If they release a PR this week or next on the store opening that will add a lot of fuel to the fire.
I agree, good discussion today. Penny stocks deservedly have a bad reputation since they are often a playground for companies to take advantage of shareholders. I agree wholeheartedly with the sentiment that ALRT is different.
It’s funny to me because I get the sense that most investors here expect a massive return (10x or more) once this hits pay dirt, and I agree with that. But if that is the case, even waiting a few years your return on investment in that time window is phenomenal. Unless you get insanely lucky or take very large risks, you do not get a 10x or more return in any short period of time.
Furthermore, you don’t get a 10x return if you sell at 5x. So I think the point is well made by LastOne in saying that patience is important not only on the front end but on the backend once this takes off to ensure you don’t sell yourself short.
They raised about $16.6m after quarter-end in the offering. Market cap is less than $15m yet they have a pro forma cash position at 6/30 of about $30m (if you include the offering proceedings).
Even if you are right that this is a bad company, it’s priced dirt cheap right now. And a bad company can still be a good value at the right price.
Honestly, not a big supporter of the company’s decision to move towards retail weight-loss centers. Makes me curious what the next few quarters look like from a revenue and growth standpoint. My guess is it’ll be very slow. But their balance sheet as of 6/30 is strong and only made stronger by the recent offering.
By my calculation of the O/S the company is trading significantly below net book value, and volume has been low and getting lower. I don’t have a strong belief/opinion in how this will do long-term (although I’d be happy to hear thoughts from any long-term investors), but I think there is strong value at this current price. The technology seems promising and the fact that it doesn’t require surgery or sedation seems like a marketable advantage.
I think the institutional/insider buys at $4 make that an easily achievable short or mid-term target. The fundamentals haven’t changed since then and you can now buy in for less than half of what they paid.
Curious to hear others’ thoughts on the path forward for this company in the current quarter and next. Seems like there is very little active discussion which I guess stands to reason give the slide this has been on.
Depends on the timing, because I bought the remaining at the .037 ask. There have been some shares selling into the bid so you might still get filled at .037 if you haven’t already.
I find it humorous seeing all the hand-wringing over the PPS by some of the same posters who have loudly and proudly announced time and time again that price action without news means nothing (which I actually agree with).
I guess it’s easier to stick to your guns when your account shows green and not red, but the irony here is palpable.
Not sure I follow the tangent you’re going on. If you are trying to relate sales not panning out back to our conversation, I think you’re moving the goal posts as we were talking about incentives.
Setting the doomsday clock at .035 and saying we go “kaput” after that is, in my opinion, incorrect and needlessly scaring other posters should this stock ever reach that level (hopefully it won’t and this is a moot point).
As I said, incentive remains whether the options are in the money or not. There is a reason you can’t buy out of the money options for free — there is still intrinsic value created by the potential upside. That is on top of the fact that landing sales will drive the PPS up which is the bigger driver.
Here is the part that is your opinion, and the part I was disagreeing with:
“If we drop below the strike PPS, we are kaput.”
If you want to reel your statement back and simply state the obvious that they would prefer the options to be in the money, then bravo on taking such a controversial stance.
I personally don’t agree at all with this emphasis on the .035 price level. If we are to assume they are not stupid, as you said, then would they not realize that closing a sale will raise this significantly above .035 and thus put their options in the money? The incentive is there regardless.
Surely there is a level where the incentive starts to decrease but I don’t think it’s .035 or very near it. Just my two cents.
I appreciate your take, thanks for sharing. I am already a believer in the platform but it’s always nice to hear those with experience in the field agree on its validity.
There are two key things that come to mind with ALRT: patience and patients. Need to have the first until we get the second. Many posters here seem to struggle with that however.
Believe it or not, they aren’t going to take my license for calling out petulant posters on an online discussion board.
With all due respect, the sense I’ve gotten is that the only people who “share his sense of humor” are those who followed him to this board or know him outside of it.
Perhaps it would be better for that group to keep the off topic and spam posts confined within private messages.
If you are saying those are life experiences he’s had, it makes his behavior worse not better.
Remember yesterday when you said I post too much? You are at 10+ posts and counting today. Most of them pointless, spam, or now even trying to stir up trouble.
I’ve only bothered to engage with you in the hopes that you’d see the errors of your ways for the betterment of this board, but it’s clear you’re just a lost cause. You consistently show a lack of class and self-awareness. You are a grown man, it’s time to act like it.
Yes, actively licensed. My experience is on the financial accounting and auditing side. I’ve never done much with taxes.
@Mckvee - Volume is continuing, so I stand corrected on the 250k volume. Still don’t think your commentary is very balanced with your “price action means nothing without news” mantra.
So when 250k is bought above .04 it means nothing, but when it’s sold below .04 it’s dumping that implies negative news? Lol.
I do have a bid in now, appreciate the heads up though. Current ask is only 10k shares so they are either hiding size or there isn’t much available right now.
The sell this morning was pre-market. A portion may have been at the bell (time stamped 9:30). I was looking to buy it at open but it was already gone.
When someone replies to me, I generally reply back. That’s kind of how a message board works; sometimes you have a two-way dialog instead of shouting “no PR today” into the wind.
Outside of that, I’ll try to ignore the irony in you telling me I post too much.
That date is as of 7/25/19 so I’m not sure it includes the public offering.
Also slight correction to my previous post, remaining purchase warrants are 3,234,375 with the $4.40 strike. However when the share price way below that I think those are irrelevant for now.
Maybe someone can help me out here. Do we know what the O/S is?
As of 7/19/19 (Per 10Q) there were 35,582,614 shares, so after the reverse split there is 3,558,261. An additional 2,427,500 were issued at $4.00 in the most recent public offering. That is 5,985,761 total. I would even maybe include the prefunded warrants of 1,735,000 since the cash was already received and they are immediately convertible. That gives 7,720,761 total, with a remaining 1,723,125 in common warrants ($4.40 strike) and about 286k in existing options / RSU’s / etc. based on the 10Q after the RS.
Does anyone have anything different? If not, we are talking a current market cap of about $17m (if you include the prefunded warrants).
The company likely has more than that in CASH on hand and has very little debt. Not to mention the IP and other assets.
How is this possibly so undervalued? Am I missing something? I don’t necessarily agree with the company’s direction in terms of opening retail weight loss centers, but this still seems like a phenomenal value buy. I mean the recent offering was at $4 a share and we are nearly at half that.
Sure, but only if you truly promise to stay asleep until then.
Furthermore, one is utterly pointless and one is actually on topic to something happening with the company (however small). I’ll let you guess which is which. And in the most recent discussion of price action, multiple posters (myself included) talked about buying shares on it.
You’re free to take your digs at me just as all of AJ’s posse has done. But you are defending some pretty poor and immature behavior (such as his blog post about the CEO) so I’m afraid you’re on the losing side.
I’ve rarely discussed price action without someone else bringing it up first (usually complaining about it dropping on low volume). For instance when your dear AJ complained about a “downward drift” on 3k shares traded.
I have a hard time seeing how that is on par with posting “No PR today” or “we need a PR” for the hundredth time.
Yeah, I really don’t understand what motivates someone to post the same inane chatter day after day after day. Seems like some people just like to hear themselves talk with no self-awareness to realize no one wants to listen to it.
A couple posters have mentioned recent price action, I’m just pointing out that it has been better lately. I’m not saying that necessarily means anything because I don’t think it does. Certainly it’s not a bad thing to see, but I think we all know this won’t move without news — I figured that went without saying.
Over 100k shares were just bought at .045, the price action has not been bad lately at all. The only slight downtick we got was on virtually no volume.
You’re on fire today. Nice to see you keeping up with your usual method of posting more than anyone else yet contributing less than anyone else. Quantity over quality I guess.
The ask side is getting pretty thin on the Level II (at least for now). There’s about 28k left at .043, followed by 10k at .045, and then next is 10k at .054