This $2.50 Pot Stock Underdog Delivering 300%+ Sales Growth
A Top-Performing Pot Stock You Likely Haven’t Considered
To most people, the name Neptune Wellness Solutions Inc (NASDAQ:NEPT) probably doesn’t ring a bell. But if you are a pot stock investor, this company should be near the top of your watch list.
Neptune Wellness Solutions is a health and wellness company headquartered in Laval, Quebec, Canada. The company has three main operating areas: cannabis and industrial hemp extraction, turnkey solutions, and consumer brands.
In particular, Neptune has a 50,000-square-foot facility in Sherbrooke, Quebec, where it focuses on the extraction, purification, and formulation of cannabis products.
In the U.S., the company has a 24,000-square-foot extraction and processing facility in Conover, North Carolina, where it offers high-quality full- and broad-spectrum industrial hemp products.
Neptune has been expanding the capacity of those facilities. According to the latest investor presentation, the company is aiming for annual processing capacities of 200,000 kilograms (440,925 pounds) at its Canadian facility and 1.5 million kilograms (3.3 million pounds) at its U.S. facility after expansion completion. (Source: “Neptune Wellness Solutions,” Neptune Wellness Solutions Inc, last accessed September 18, 2020.)
At the same time, the company’s turkey solutions business is gaining momentum. Neptune provides product development and supply chain solutions to businesses across several health and wellness verticals, including legal cannabis and hemp, nutraceuticals, and white-label consumer packaged goods.
Notably, Neptune has signed multi-year extraction agreements with some leading pot companies, including Canopy Growth Corp (NYSE:CGC, TSE:WEED), Tilray Inc (NASDAQ:TLRY), and Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF, TSE:TGOD).
As for its own brands, Neptune’s “Forest Remedies” hemp-derived products are available to consumers in the U.S.
In Canada, the company received approval from Health Canada in June to sell cannabis products—including edibles, extracts, and topicals. In August, it introduced the “Mood Ring” cannabis brand for the Canadian market. (Source: “Neptune Introduces Mood Ring Cannabis Brand for Canadian Market,” Neptune Wellness Solutions Inc, August 18, 2020.)
Mind you, Neptune is not just in the cannabis and hemp business. Its product capabilities also include vitamins and omega-3s, and even hand sanitizers, thermometers, and disinfectant wipes.
You see, due to the COVID-19 pandemic, there has been an increasing demand for touch-free thermometers and hand sanitizers. And Neptune moved quickly to cater to the demand. In April, the company said that it was accelerating production of hand sanitizers to more than one million units weekly. (Source: “Neptune Scheduled to Ship Over One Million Units of Hand Sanitizer Weekly,” Neptune Wellness Solutions Inc, April 23, 2020.)
And then, in May, the company introduced “Neptune Air,” a non-contact infrared thermometer, which can help reduce cross-contamination risk while measuring a person’s temperature (Source: “Neptune Announces Launch of Neptune Air Non-Contact Thermometer,” Neptune Wellness Solutions Inc, May 12, 2020.)
In a letter to investors last month, Michael Cammarata, Neptune’s president and chief executive officer, said, “The market for hand sanitizers is robust, and our new hand sanitizer has emerged as an important product. Since July 2020, Costco has sold our hand sanitizer in the Northeastern and Southeastern United States, and we have not yet found a ceiling for demand in these regions. In coming months, we will start shipping to the Midwest and West Coast.” (Source: “Q1 Investor Letter,” Neptune Wellness Solutions Inc, August 11, 2020.)
Now, the demand for cannabis and hemp products is already strong; add in these newly launched consumer products in response to COVID-19, and the company’s business is firing on all cylinders.
In the first quarter of Neptune’s fiscal year 2021, which ended June 30, 2020, the company generated CA$21.4 million in total revenue, which represented a staggering 390% increase year-over-year. (Source: “Neptune Reports First Quarter Fiscal 2021 Results,” Neptune Wellness Solutions Inc, August 11, 2020.)
Gross profit totaled CA$3.3 million for the quarter, which marked a substantial improvement from the year-ago period, when the company had a negative gross profit of CA$712,000.
Obviously, the cannabis industry is known for having high growth rates, but Neptune’s numbers are extremely impressive even by pot industry standards.
The best part is that growth is expected to continue. For the September quarter, management is projecting total revenue of between CA$28.0 million and CA$32.0 million, which would mark year-over-year growth of 330% to 391%.
Neptune Wellness Solutions Inc (NASDAQ:NEPT) Stock Chart
Chart courtesy of StockCharts.com
One last thing to note is that, although Neptune Wellness Solutions Inc is not a big-name pot company, its shares are actually listed on both the Toronto Stock Exchange and the Nasdaq. So, it’s very convenient for both U.S. and Canadian investors to get a piece of the action. On both stock exchanges, the company’s ticker symbol is “NEPT.”
As you can see from the chart, investors have started warming up to NEPT stock recently, bidding up its share price from $1.14 to $2.50 over the past six months. Given the triple-digit percentage year-over-year revenue growth rates the company is delivering, NEPT stock could see even more upside ahead.