Hi Guys,
Fundamentals and valuations are still in place for NGW. Now valuations have moved down to new lower support levels and close at these levels on a weekly basis.
I did consider this sell off to be a buying opportunity and I did add to my position on Thursday and Friday of last week.
I figure that the market cap to be at $.17 per share U.S x 165,000,000 shares outstanding = $28,050,000 U.S.
We know that NGW is producing their continous harvest and selling out each harvest, in mostly bulk weed over the last few months. And NGW is generating $1,000,000 sales per month. So lets say that over the next quarter or so they convert 50% to pre roll. And in addition NGW announced that they will startup their in house extraction by the end of the 3rd quarter.
So for these reasons NGW should be selling very close to -$1,500,000 per month in sales.
Lets say by year end December 2020 NGW sales are at $1,500,000 per month sales.
Price to sales valuation would be as follows by year end.
12 months x $1,500,000 per month = $18,000,000 market cap.
There for price to sales would be $28,000,000/$18,000,000 = 1.55
At a price to sales of 1.55 NGW is trading very much below other companies in their sector.
For example several other weed companies (that are loosing a lot of money) are trading at very much higher price to sales ratios.
For example
Tlry Inc. symbol TLRY P/S 4.09
Auroca Cannabis symbol ACB P/S 4.26
Canopy Growth symbol CGC P/S 20.33
Yes the above are very large companies in sales but they are all loosing millions of dollars per quarter.
The recent proof of monthly profit for NGW and above valuations given to other companies in the weed sector NGW could/should easily be at double the valuation or possibly more.
And we should see a year end price of at least $.35 U.S. And a price to sales of P/S 3.2
This is my reason to continue to add to my position as funds and now pricing becomes available.
Comments welcome.
GLTA
