OGI Stock Keeps On Climbing
One of my absolute favorite pot stocks recently had an extraordinary few days. OrganiGram Holdings Inc (NASDAQ:OGI) has long been one of my top pot stocks, especially considering the company is a marijuana penny stock, making it very affordable.
OrganiGram stock recently impressed with a massive run of 30% gains in just a few days. That type of growth is becoming increasingly common in the marijuana stock market. For OGI stock, the future could see gains of 100%, maybe even 200%.
Investors are growing confident in the cannabis industry, with many of them especially excited about the potential of marijuana penny stocks. And as far as pot penny stocks go, few (if any) are as impressive as OrganiGram stock.
OrganiGram Holdings Inc has a number of strong supply agreements across Canada, making it well situated to receive recurring revenue for years to come as it continues to play a big part in the maturation of the Canadian marijuana market.
There are a number of unique factors at play when it comes to OGI stock. Despite being a marijuana penny stock, it has one of the largest market caps in the entire industry. That makes it an ideal company both for acquisition or for—better yet—forming a partnership with a company from a different industry that’s looking to get into the pot sector.
Several alcohol and tobacco companies have joined forces with marijuana companies in recent years, seeing the writing on the wall: legal marijuana is going to be big business. Instead of trying to fend off competition from the pot sector, these companies were shrewd and have decided to join forces with the coming green rush.
OrganiGram is a prime target for such a partnership. Many companies of a similar size have already made those types of deals, so it stands to reason that OrganiGram could be next in line.
Consider that, when Canopy Growth Corp (NYSE:CGC) partnered with alcohol provider Constellation Brands, Inc. (NYSE:STZ), the entire cannabis stock market saw massive gains. Those gains were further increased when Constellation Brands invested even more in Canopy Growth a few months later.
Flooding all that money into the marijuana industry sent share prices flying across the board. If OrganiGram Holdings Inc is able to land a partnership, OrganiGram stock would easily be able to see gains of 30% to 50% in short order.
After all, OGI stock has already been marking huge hikes in fairly short periods. A huge influx of cash as the result of a partnership would surely be able to send this stock flying.
Chart courtesy of StockCharts.com
OrganiGram stock is actually quite accustomed to massive surges. In November, it had a week in which it climbed by over 30%. On November 28 alone, the stock saw a six-point jump.
As such, OGI stock has the potential to surge high and fast due to the company’s potential.
After all, OrganiGram has carved out a very strong niche in the weed industry. Not only is it a strong company with good sales figures and solid prospects for recurring revenue via its supply agreements, but it’s only going to get bigger as the Canadian marijuana market continues to mature.
OrganiGram stock will likely be a massive beneficiary when the Canadian illicit marijuana market is eliminated (or at the very least debilitated) in the coming years.
All this potential will be helped along when we consider OrganiGram Holdings Inc’s prospects as far as acquisitions and partnerships go. If the company is acquired (a very real possibility), then its shares will likely surge quickly, the height of that surge dependent on the specifics of the deal.
A partnership deal, on the other hand, would see OrganiGram stock register gains for a long time coming.
I’m extremely bullish on just how high OGI stock can climb in the next year or two. And for those not willing to wait, there will likely be several 30% surges in the company’s near future, so day traders and others looking to make a fast buck could choose OrganiGram stock for that reason.
OrganiGram Quarterly Report Has Investors Buzzing
OrganiGram Holdings Inc recently released its fourth-quarter and fiscal-year report, adding yet another boon to the already impressive stock.
OrganiGram’s fiscal-2019 net revenue increased 547% year-over-year from $12.4 million to $80.4 million, representing the first full year of Canadian marijuana legalization. (Source: “Organigram Reports Fourth Quarter and 2019 Fiscal Year Results,” Business Wire, November 25, 2019.)
While revenue growth like that may not continue year-over-year, when the black market is quashed, that will send Canadian pot companies on a second earnings surge, not unlike what they saw when legalization first hit.
This second surge may take place in smaller doses over months and years, but the end effect will be the same: huge growth among pot stocks.
Despite all the positives in OrganiGram’s earnings report, the company did incur a net loss on the year (after recording net income in fiscal 2018), which it attributed to non-cash fair value changes to biological assets and inventories.
OrganiGram Holdings Inc’s fiscal-2019 adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) hit $19.9 million, or 25% of net revenue. That’s up from negative $1.0 million in fiscal 2018.
OGI stock was further helped by registering an estimated 10% share of Canada’s recreational weed market.
The company saw sales in all 10 Canadian provinces, speaking to OrganiGram stock’s strong long-term outlook. It’s worth noting that many of those provinces are going to be expanding their legal marijuana markets as time goes on.
Consider Ontario, the most populous and richest province in Canada. It only has a handful of stores legally open right now to serve its roughly 15 million residents.
That’s changing. A concerted effort is being made to ensure that more legal storefronts open in Ontario, which in turn will help stunt the illegal market.
Not to mention that Canada has recently legalized marijuana edibles, dealing another blow to the black market.
For my top pot stocks, all this is very good news. For OGI stock, a marijuana penny stock that is almost without equal, it’s excellent news.
The legal marijuana sector is poised to see massive growth in the coming years, with the top pot stocks likely to receive the lion’s share of that surge.
OrganiGram Holdings Inc is almost perfectly positioned to get the best of all worlds. As a marijuana penny stock, it is able to grow with a speed and gusto that more established pot stocks will have trouble matching.
As a top pot stock by market cap, OrganiGram stock has a very strong position that will engender confidence among investors.
And as a company on the rise, many businesses outside of the weed industry (and many within) will want to get a piece of OrganiGram as it continues to gain steam.
In my mind, there’s no reason that OGI stock can’t double—possibly even triple—in the next three years.