The Daily Buzz: The Rebound Roster (BYND, MMNFF, CANN)

Flavia Carruth - August 20, 2019

Beyond Meat Inc (NASDAQ:BYND) has been one of the most interesting stocks on the listed exchanges so far in 2019, providing traders with huge volatility in a momentum bet that seemed, for a while, to have no top in sight. But the action is finally providing a pullback and the rubber band could be stretched yet again for an upside reaction as shorts line up for another squeeze job.

To help flesh out the story, the company just announced that its products will be offered as part of HelloFresh’s premium Craft Burger collection. HelloFresh customers can now order the first recipe Goudalicious Beyond Burgers paired with Potato Wedges and Creamy Mustard Aioli, which will begin shipping to customers nationwide the week of September 14, 2019.

The scope of this meat alternative continues to grow, outpacing its major competitors. But, looking further out in the future, the company doesn’t have a magic formula that is qualitatively differentiated from its competition, suggesting that the big picture is still likely to be one of reversion to the mean.

Beyond Meat Inc (NASDAQ:BYND) promulgates itself as a food company that manufactures, markets, and sells plant-based meat products in the United States and internationally. The company sells its products under the Beyond Beef, Beyond Chicken, The Beyond Burger, Beyond Meat, Beyond Sausage, Eat What You Love, and The Cookout Classic brand names. Beyond Meat, Inc. sells its products through grocery, mass merchandiser, and natural retailer channels, as well as various food-away-from-home channels, including restaurants, foodservice outlets, and schools.

BYND has a significant war chest ($277M) of cash on the books, which is balanced by about $40.4M in total current liabilities. One should also note that debt has been growing over recent quarters. BYND is pulling in trailing 12-month revenues of $165.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 287.2%.

 

Medmen Enterprises Inc (OTCMKTS:MMNFF) offers an excellent example of potential support under construction. The company has been through the ringer as a once-highly-controversial name in the US cannabis space, and now appears to be potentially on the mend. One key factor driving us to highlight the name at this point is the fact that it has shown two distinct “upward thrust” days in the past week, each surpassing at least 6% in gains.

The latest such move occurred on Monday and was driven ostensibly by the company’s announcement of the launch of statewide delivery service in California, bringing the Company’s industry-leading retail experience to the consumer at home. According to the release, “with over 400 products, MedMen’s new delivery service is the most robust of its kind. The company will initially focus on California, where it has 17 retail locations, and expects a nationwide expansion in the near future.“

Delivery is an “edge” factor in the cannabis space, so this is now firmly a stock to watch, particularly given its history of skeptical valuation relative to the rest of the cannabis space.

In broad terms, Medmen Enterprises Inc (OTCMKTS:MMNFF), together with its subsidiaries, operates in the cannabis space in the United States. It is “a leading cannabis company in the US”, with assets and operations across the country. Based in Los Angeles, MedMen brings expertise and capital to the cannabis industry and is one of the nation’s largest financial supporters of progressive marijuana laws.

The company cultivates, produces, possesses, uses, and distributes/retails cannabis in the recreational and medicinal cannabis marketplace. The company frames itself as “the preeminent cannabis company in the United States” with multiple assets and operations in California, Nevada, New York, and Florida.

As the week’s action progresses, and given this latest catalyst, we would watch this stock in case it happens to break out above its 50-day moving average (currently in the $2.20/share area). That might be a signal suggesting the bearish phase is over and there is a green light shining for new money flows into MedMen.


General Cannabis Corp (OTCMKTS:CANN)
provides products and services to the regulated cannabis industry in the United States. Shares of the company continue to stage a valiant turnaround, now trading well back above the 50-day MA. Take note.

To further propel the story, the company just announced that it has entered into a non-binding term sheet to acquire substantially all of the assets of a licensed recreational cannabis retailer in Denver, Colorado.

“We are pleased to announce our plans to acquire a fourth licensed Colorado cannabis operator,” said Michael Feinsod, Executive Chairman and Chief Executive Officer of General Cannabis.  “This planned acquisition would bring our skillset to North Denver. The Business we plan to  acquire is well located and would provide another strong piece to our expansion strategy.  This facility would pair us with another operator and expand our customer base, allowing us to leverage our skill set as HB-1090 is implemented.  We look forward to integrating this facility, and its team, into the General Cannabis family upon consummation of the transaction.  This potential acquisition will bring our anticipated owned dispensaries to three, our anticipated cultivation space to approximately 45,000 square feet, and one infused products manufacturer license within the state of Colorado.”

The company operates through four segments: Security and Cash Transportation Services (Security), Marketing Consulting and Apparel (Marketing), Operations Consulting and Products (Operations), and Finance and Real Estate (Finance).

The Security segment advanced security services, including on-site professional and cash transport to licensed cannabis cultivators and retail shops, as well as security services to non-cannabis customers in the hospitality business.

The Marketing segment provides designing, branding, and marketing strategy consulting services to the cannabis industry; and designs and sources client-specific apparel and products. This segment offers t-shirts, hats, hoodies, and accessories through an online shop, as well as cannabis retailers, and specialty t-shirt and gift shops.

The Operations segment provides consulting services to the cannabis industry that comprise obtaining licenses, compliance, cultivation, retail operations, logistical support, facility design and construction, and expansion of existing operations.

The Finance segment engages in the acquiring and leasing of cultivation space and related facilities to licensed marijuana growers and dispensary owners. This segment also offers shared office space, networking, and event services; direct term loans and revolving lines of credit; and customized finance, capital formation, and banking services.

 

 

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Flavia Carruth

Hi, I am Flavia and have done my MBA with finance as specialization and a Bachelor in Economics with 4 years of experience as Financial Analyst in leading Software Firm. I have passion for article writing, report making and stock market Analysis.

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