OGI Stock: OrganiGram Once Again Proves Why It’s Such a Strong Marijuana Penny Stock

OrganiGram Holdings Inc: Why Investors Remain High on OGI Stock
iStock.com/Artem Cherednik

OGI Stock Continues to Thrive

It’s no secret that OrganiGram Holdings Inc (NASDAQ:OGI) has been up and down lately. While many pot stocks have been feeling the pain since the general market pullback hit, OGI stock has been much harder to predict. Marijuana penny stocks tend to be harder hit by these drops in the market, and yet OGI stock has managed to perform rather strongly despite it all.

It has seen over 80% growth over the past year, and despite a rocky recent performance, it still finds itself on the positive side of things—an impressive feat, considering that much of the pot industry has experienced a downturn.

Chart courtesy of StockCharts.com

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In my mind, that’s just the start for the company—a lot of room left yet for it to grow.

Since the beginning of this year, I’ve been singing OGI stock’s praises. After all, it started 2019 as one of the strongest marijuana penny stocks around, with a lot of room for growth. Things like it listing on a major U.S. exchange (the Nasdaq) helped propel its stock even further, while other possible events, like acquisitions or major partnerships, have yet to come to fruition, but are still very much on the table.

At this point, OrganiGram Holdings stock is in a very enviable position: small and flexible enough to see big gains while also having the size to be stable through these difficult market times. The combination makes it truly one of the more impressive buys in an industry full of them.

Since I’ve been recommending the stock in my newsletter, Marijuana Millionaires, investors have earned a whopping 131.65%. So it’s safe to say that OrganiGram Holdings has made me look good. And I think that it will continue to do so as time passes.

The evidence for that is clear in the company’s recent quarterly report.

OGI Stock Quarterly Report

Initially, it seemed like OraniGram Holdings was in for tough times ahead as it accrued a net loss of CA$10.2 million in the quarter, or $0.07 per share. This was a stark departure from the CA$2.8-million profit ($0.03 per share) the company saw in the period a year prior. It was especially disappointing considering the company was projected to be profitable again this quarter by many analysts. (Source: “OrganiGram’s stock turns lower after surprise loss, but revenue soars 7-fold,” MarketWatch, July 15, 2019.)

While OGI stock did suffer when the earnings report dropped, it was quick to recover, surging nearly six percent the next day. That speaks to the stability the company has, the confidence that investors have in OrganiGram Holdings, and, more importantly, a lot of the hidden gems in the earnings report.

Sure, losses are not ideal. But OrganiGram Holdings was able to register a whopping 784% increase in fiscal third-quarter net revenue compared to the previous year.

The fact is that OrganiGram Holdings Inc’s wide reach across Canada is going to help spur growth for years to come.

Part of the reason for the losses, too, was an outlier: a failed experiment to innovate on growing.

The company attempted to use organic material from the early stages in the plants’ lives in order to grow more product, opposed to the traditional method of trimming bits of already growing plants in a process called “cloning.” (Source: “Failed marijuana experiment slams Organigram earnings,” MarketWatch, July 16, 2019.)

While good in theory, in practice this was much more plant-dependent and therefore led to less solid yields.

The company then had to revert to its previous method, losing it about four to six weeks of optimal growth time.

Still, despite the failure of the experiment, the ideas are sound: namely, innovating on the growing process is only going to power the company’s competitive advantage in the future. Sure, this time didn’t work out, but the next may very well yield big results. I like this move, even if it did end in failure.

Furthermore, the massive climb in revenue, coupled with that month-plus delay as the result of the wayward experiment, means that next quarter could very well be explosive, as the company will likely return to profitability alongside a massive inflow of revenue.

Not to mention that OrganiGram Holdings Inc is still in its growth phase. Incurring losses during this time isn’t always a bad thing; just look at the many tech success stories that came after years and years of loss.

Overall, I would tally this as a strong quarterly report and one that should keep investor confidence in OragniGram Holdings.

Analyst Take

It may not be the brightest time in the marijuana stock market, but even the recent market fall is not enough to dim OGI stock. This is a winning play right now with huge potential for future gains. The recent OGI stock quarterly report only further solidified what I’ve already long known: that this is a very strong company with a solid foundation upon which to build. Investors looking to profit off of that building should keep a close watch on OrganiGram Holdings Inc.