Puration Inc (OTCMKTS:PURA) An Undervalued High Growth Cannabis Play

February 13, 2018 -- InvestorsHub NewsWire -- Puration Inc (OTCMKTS:PURA) has been on the receiving end, ever since it rose to highs of $0.07 at the start of the year. While the stock is currently trading in a downtrend, we believe, it is highly undervalued, given the growing retail chain interest of its flagship, cannabis-infused, EVERx Sports water.

After pulling back from the $0.07 handle, the $0.03 handle has emerged as a strong support level. As long as the stock trades, above the $0.03 mark, it remains a strong buy, in our view, given the strength of the company’s core business.

A close below the $0.03 mark, on the other hand, could see the stock dropping to the $0.02 handle, seen as a key support level, below which the stock could fall to its 52-week lows of $0.01.
 

Before we carry out a detailed analysis of why we believe the stock is destined to rise from the current trading levels, let us review what Puration does in pursuit of growth and shareholder value.

Puration Business Description

Puration Inc. bills itself as a water purification company that designs, develops, produces and distributes water purification products. Its water purification systems include personal water filter bottles as well as portable biological filtration devices and replacement filters.

Also, the company is in the process of expanding its business portfolio in the cannabis sector where it hopes to generate significant shareholder value in future. Currently, the company’s flagship product in space is the EVERx Sports Water product line.

A growth in demand, of the company’s EVERx Sports Water, infused with 10mg cannabis, is one of the reasons why we remain bullish about the company’s long-term prospects. The management team reports that it has received unsolicited calls from distributors and retail giants looking to carry the product.

“We believe the growing interest stems from having a good product that stands out from other CBD infused products combined with our good fortune at having won our first retail engagement with Drug Emporium. Drug Emporium is a respected brand name and having EVERx on shelves at Drug Emporium is a privileged that we know enhances the status of our EVERx product. Now other distributors and retail chains are showing interest and we are ramping up to meet demand,” said CEO Brian Shibley

 What next

Retailers and distributors carrying the CBD infused EVERx water product, should go a long way in broadening its awareness. The result should be more sales and increased revenue for Puration, which is aggressively looking for ways to diversify its revenue streams.

In what is seen as an attempt to curve a bigger slice of the lucrative cannabis water business, Puration has announced plans to launch two new products. Strawberry Kiwi and Lemon Lime flavored EVERx CBD infused sports nutrition, are the new products the company plans to unveil at the Arnold Schwarzenegger’s Annual Arnold Sports festival in March.

The unveiling comes at a time when EVERx has become a household name in the CBD infused marketplace and one of the only infused products in the sports nutrition category. The product line presents a unique opportunity for Puration to be a big player in a market set to be worth $3 billion by 2021.

Unlocking Shareholder Value

Management has embarked on a new strategy that once complete will unlock more shareholder value. As part of the new push, Puration plans to divide its cannabis-infused business and patented cannabis extraction business into two traded public companies.

“The first step in the strategy is to structure Purgation’s extraction capacity into a new subsidiary. The next step will be to spinoff the cannabis extraction subsidiary in conjunction with a Regulation Crowdfunding transaction to capitalize the new independently listed company. The spinoff plan includes a dividend distribution of stock in the new independently listed company to shareholders of the parent company,” Puration in a statement.

The parent company name is to be changed to reflect its cannabis-infused beverage operations with the two subsidiaries also receiving names reflecting their operational extraction focus.

The management expects the combination of the two to yield a higher return to shareholders, than a single stock representing the integrated value of the two.

Bottom Line

Puration has set its eyes on the cannabis space given the growth opportunities available in the multi-billion industry. The company is in the process of opening a cannabis extraction facility as it looks to pursue California’ $10 billion legal cannabis market.

Also, eyeing growth opportunities across the border, the company has set its eyes on Canada’s $8 billion legal cannabis-infused beverage marketplace.

Taking into consideration the growing demand for the company’s flagship product and the business expansion plans, Puration appears to be undervalued at current levels. Puration remains perfect for anyone looking to pick out some exposure in the cannabis space, given that it is highly undervalued with tremendous prospects for growth.

We will be updating our subscribers as soon as we know more. For the latest updates on PURA, sign up below!

Disclosure: We have no position in PURA and have not been compensated for this article.

Other InsiderFinancial.com recomendations include BIOMED International (THCBF), Cannabis Science (CBIS), and Cannabix Technology (BLOZF)

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