Can Namaste Stock Recover?
During this massive marijuana correction that has swept over the industry, we’re seeing a lot of companies that were once serious gainers lose a ton of value. Pot stocks that were once flying high with double- and triple-digit gains are now struggling to rise even a few percentage points. For the hardest hit, they’re down in some cases by as much as 50% since the year began. And that brings us to Namaste Technologies Inc (OTCMKTS:NXTTF, CNSX:N).
Namaste was once one of the stronger pot stocks around, but following the marijuana industry correction, the company is down a blistering 55% since the beginning of the year. That means that investors keen on entering the marijuana market to start 2018 have lost huge on NXTTF.
Of course, over the past year, the company is still up over 500%, so for long-term buyers, it’s still very much a winner. But for those who have only recently bought in on NXTTF stock, they are obviously not happy with its performance.
So does the company have a chance at a rebound? Or is it best to look elsewhere for a pot stock investment?
In my mind, all the stocks that took massive hits in the recent correction are still viable options for investors. That includes Namaste stock.
While the dismal performance in 2018 does not endow confidence, the company gained 500% over the past year for a reason.
Chart courtesy of StockCharts.com
Remember that Namaste claims to be the largest online retailer in the world when it comes to marijuana tool distribution. It sells vaporizers and smoking accessories, and currently has 24 sites working in 20 countries and distribution centers around the world, including in Europe and Australia, two burgeoning marijuana markets. (Source: “Namaste Announces February 2018 Sales of C$1.37M Representing a 146% Year-Over-Year Increase and Provides Update on NamasteMD,” GlobeNewswire, March 7, 2018.)
That’s no easy feat to accomplish. Considering marijuana is going to become far more prevalent in the years to come, being able to provide the tools to actually use that marijuana is going to be crucial.
Think of it like this: if car sales are through the roof, then it stands to reason that people are going to have to purchase tires.
While not selling marijuana directly, Namaste is in a unique and relatively unchallenged position to be the dominant provider of marijuana paraphernalia.
The problem is that the company’s stock has been taking an absolute beating in recent months and no amount of good sales figures or other positive news was able to rescue Namaste stock.
The company is also taking a unique e-commerce approach to the pot industry, hoping to become a Silicon Valley-esque company operating in the marijuana sector.
NXTTF stock is also likely to benefit from its subsidiary Cannmart Inc. as it begins to distribute medical marijuana using its online platforms as a jumping off point.
The company’s focus on e-commerce is novel and, in my mind, a good one. The problem is determining when the company’s bounce back will begin and how effective the recovery will be when/if it does take place.
There are a lot of things to like about Namaste stock, but right now, I’d put buying NXTTF on the riskier side of the spectrum.
While the company does have a lot of potential and is likely to see a recovery in the near future, my concern is just how effective that recovery will be coupled with the fact that the company is continuing to tank.
Waiting for the right time to gobble up NXTTF stock at the right price will be critical; the issue is in determining when that bottom will come.
I’d expect the company to see gains by, at the latest, early summer. Interested investors may want to watch Namaste stock to see if the winds begin to change, because if you can get the company at a discount and the recovery is hotter than expected, then NXTTF stock may be one of the better buys of the year.