MedReleaf Stock Seeming Undervalued at Current Levels
MedReleaf Corp (OTCMKTS:MEDFF, TSE:LEAF) is quite easily one of the most underrated marijuana stocks. Despite being the first ISO-certified producer in the country and having earned the title of “Canada’s best licensed producer of marijuana,” MedReleaf continues to stay in the shadow of the more popular marijuana stocks.
The sad reality is that most of MedReleaf’s achievements get swept under the rug. Just take the example of its latest German partnership, which is one of the most significant deals made by any Canadian marijuana company. And yet, for some reason, it didn’t move the needle on prices. In fact, the stock has actually tanked since the announcement. Investors are left scratching their heads and wondering: What the heck is going on?
I’ll tell you what. A whale is dumping the stock.
Take a look at the price/volume chart below. You see those spikes I’ve highlighted in red? Those are unusually high volumes marking two most recent points where one or more major stockholders have sold LEAF stock.
Chart courtesy of TradingView.com
According to most recent disclosures, a key investor, Raymond Leach—who hoarded MedReleaf stock at the time of its initial price offering (IPO), with an ownership in excess of 13% of the outstanding shares—has been unwinding his position in the past one month. (Source: “MedReleaf Corp. (T:LEAF),” Canadian Insider, last accessed March 21, 2018.)
Should it matter to you? Not really. Insider sales are a cause of concern when management is involved in dumping stocks. It’s either a sign that the management lacks faith in their company or that the stock is overvalued.
In this case, however, the investor in question is not part of the management. His reasons could be exclusive of MedReleaf’s fundamentals. Maybe he is freeing up his capital to put into another venture. We don’t know.
What’s certain, however, is that MedReleaf is selling for cheap at a time when it has just sealed a significant deal.
Earlier this week, MedReleaf signed an agreement with Cannamedical Pharma GmbH, a local distributor of medical marijuana in Germany that has 1,800 pharmacies on its network. MedReleaf will become its largest supplier of marijuana.
Just to give you an idea why this is huge, notice that Canada’s largest pharmacy chain, Shoppers Drug Mart, by comparison, has less than 1,300 stores across the nation.
By the way, MedReleaf has also sealed a similar deal with Shoppers Drug Mart, under which the drugstore chain will allow it to sell its medical marijuana products through Shoppers’ online store as well as its physical retail locations across Canada.
So let’s not lose sight of the big picture here. I’ve always called MedReleaf the “iOS” of marijuana stocks because it boasts splendid branding power.
To up the ante, MedReleaf has recently begun promotions for its recreational marijuana brand, even though marijuana has not yet been legalized for recreational use. But MedReleaf wants to make sure it’s ready to roll it out to the public as soon as the government lights the green signal. MedReleaf is one step ahead of its competitors.
For some reason, MedReleaf doesn’t receive the limelight as do some of its rivals, which aren’t any bigger than it. In fact, if we go by revenue, MedReleaf is as big as the second-biggest industry player, Aurora Cannabis Inc (OTCMKTS:ACBFF, TSE:ACB). But MEDFF stock has so far failed to garner the same level of investor attention as its archrivals.
So, if you’re a savvy investor, now may be a good time to give MedReleaf stock a second look. Don’t let this top marijuana stock slip so easily under the radar.