Ft Lauderdale, FL - July 12, 2017 - InvestorsHub NewsWire
Among the many segments of
the marijuana industry that
marijuana stock traders pay attention to, CBD or cannabidiol has
taken on a major role. This is not only for its biotech-based
applications but also for its uses outside of the health sciences
sector. And with the growth that the market is projected t to see,
CBD companies are definitely in the spotlight for the foreseeable
future.
One Marijuana
Stock that has been attracting the attention of
marijuana investors has been Potnetwork Holdings, Inc.
(POTN). Now don’t let the name fool you, this company,
through its subsidiary First Capital Venture Co.,
owns Diamond CBD Inc.;
Over the last few months, POTN has been
breaking barriers with its CBD brand while also hitting major
milestones for the better part of the first half of the year.
What could be best of all is that 2017 may already have the stage
set for a record setting period in POTN’s
company history.
Big Growth Already In Play?
In May of this year (2017) the company announced that it had
realized first quarter figures that exceeded expectation by over
$100,000, for a total of $1,858,347.48. They also established a
merchandising pipeline of 7,000 authorized retail vendors through
its distribution channels, which puts Diamond CBD at approximately
10,000 stores in the United States.
If this wasn’t enough, POTN further catapulted off of this first
quarter momentum by recognizing over $2million from April to
mid-May with a pace set to outshine the first quarter figure by a
relatively large margin. Even assuming this rate of revenue
generation and accounting for zero growth or contraction in
revenues, POTN could be an $11million company by year’s end. Again
this is assuming the company holds this course and does about
$1million in revenue per month.
Let’s compare just by Revenue Figures Alone From Most Recent
Annual Filings:
√ Medical Marijuana, Inc.
$8.00m (Annual, 2016) Market Cap: $264.7M
√ Rocky Mountain High Brands, Inc.
$1.08m (Annual, 2016) Market Cap: $ 53.4M
√ mCig, Inc.
$4.5m (Annual, 2017) Market Cap: $ 70.0M
√ Axim Biotechnologies, Inc.
$0.047m (Annual, 2016) Market Cap: $551.4M
Now look at these figures, the multiples are astronomical
compared to their market caps:
- mCig trades at roughly 15.5 times
revenue
- Medical Marijuana Inc. trades at nearly 33 times
revenue
- Rocky Mountain trades over 49.4 times
revenue
- Axim is trading at an astronomical 11,732 times
revenue!
Now look at the same situation for Potnetwork. We can look at
the 2016 annual for apples to apples comparison but the real story
comes when you consider that Diamond CBD is now its subsidiary
(which we’ll get into in a moment).
√ Potnetwork Holding,
Inc.
$1.03m (Annual, 2016) Market Cap:
$38.2M
Even with last year being a slower year for the company, which
could be attributed to the company’s future outlook and its
uncertainty, Potnetwork had only traded at roughly 4 times
revenue.
Now, let’s take into account the company’s last few months of
announcements. By the figures given, it’s assumed that as of the
end of May, Potnetwork revenue was in the ballpark of roughly
$3.86m on a conservative estimate based on Q1 revenue and May
revenues of over $1million: first quarter 2017 revenue of
$1,858,347.48, “over $1 Million in April,” and
“over $1Million for May.”
Price Target Given: $0.25
Being that this will be the first time that Diamond’s operations
will be under the POTN flag, we can look at a
brief snapshot of the company, at least from a first half
standpoint of this year.
Even by just assuming that this company sees zero growth ahead
and an outstanding share count of even 600m, at current prices of
roughly $0.08, POTN would be a $48m market cap
company with revenues of roughly $3.86m; only 12 times revenue.
But so far this year, a “zero growth” scenario has not been the
case at all. In fact, based on recent announcements, growth for the
company has been very pronounced so far. This is most likely a big
reason why analysts are finding that the valuation for
POTN is low right now. SeeThru Equity initiated
coverage on Potnnetwork Holdings and recently gave a price target of $0.25. Meanwhile, the
company continues to hit the convention circuit to build attention
around the investment side of Potnetwork & Diamond CBD’s
company as well as the actual product side of the business through
countless tradeshow appearances.
And just recently the company announced that it has sold 80,000
Chill gummies since taking to the roadshow circuit. And currently
POTN is “re stocking” over a two-week period to
re-up its inventory of this brand.
The takeaway? In our opinion, compared
to other presumed “industry leaders,” POTN is still trading at a
fraction of the revenue multiple that these other companies are.
Additionally, based on announcements, it doesn’t appear that the
company, with Diamond CBD, is closing the doors and stopping its
revenue growth anytime soon. This could be one of the more, if not
the most undervalued CBD stocks in the market right now and the
fundamentals show rapid growth projected along the way.
“We are ecstatic with our results. We have learned to
set our expectations high. As a result of the timing of CBD’s
growing popularity and the quality of our products, our products
are consistently met with reseller and consumer enthusiasm
resulting in continuous escalating sales.”
-Maria Gomez, Regional Vice President
of Sales for Diamond CBD, Inc.
The opportunity for taking advantage of the growth that
CBD is beginning to see could be important to take
into consideration. Figures estimate that the CBD market will
grow to a $2.1 billion market in sales by 2020. That’s a 700%
increase from 2016.
Think about this for a
moment: POTN is already growing and is
expecting to continue this growth for the year, according to
several announcements already made during the last few months…this
is all going to happen during a time where the CBD
industry as a whole is also anticipating significant growth.
Having already come off of a banner quarter, we think that
preliminary guidance from the company would suggest that this is
something to be paying close attention to during the second half of
2017.