Abacus Health Products: Featured Cannabis Stock
ABAHF (OTCQX), ABCS (CSE)
Abacus Health Products, Inc. specializes in the development and commercialization of OTC topical pain-relieving products infused with CBD. Its brands include CBD Clinic and CBD Medic. CBD Clinic analgesic ointments, oils, and creams provide pain specialists with an entirely new class of products for safe and rapid relief from acute musculoskeletal pain. CBD Medic products are sold direct to consumers through both mass and local retail chains as well as through an e-commerce platform. They’ve also partnered with three-time Football World Champ, Rob Gronkowski.
Should you invest in Abacus Health Products, Inc.? Stock Recommendation: Keep Reading
Fundamentals
Profile
HQ: Woonsocket, RI
Founded: 2014
Facilities: Toronto, Woonsocket
Symbol: ABAHF (OTCQX) & ABCS (CSE)
Focus: Strong
Abacus is focused on the commercialization and development of CBD based topical treatments for pain relief and therapeutic skincare applications. Abacus is targeting the professional practitioner and consumer market through its CBD Clinic and CBD Medic product lines. Abacus products are manufactured in a cGMP compliant manufacturing facility and distributed across the United States.
Size: Neutral
Market Cap: US $35.45 mil
Enterprise Value: US $7.68 mil
Number of employees: 45
Markets: Neutral
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Operations: Weak
Cultivation: None, all production is outsourced to CBD Pharmaceuticals Ltd
Distribution: Neutral
Direct sales: Direct sales to consumers and practitioners
Store networks: 12,000 retail stores across the USA
Financials: Weak
Revenue last year was $4.1 million.
Margins: 60.1%
Shares Outstanding (diluted): 5.68 mil
EPS (diluted): (0.63)
Management: Neutral
CEO: Perry Antelman
CFO: Hank Hague
Perry Antelman, CEO of Abacus, has more than 30 years of experience launching, funding, and growing companies in the medical and pharmaceutical sectors. Hank Hague has previously worked in cGMP drug delivery and medical device industries prior. Abacus was involved in expanding the management team during the third quarter of 2019 with a new marketing director, brand manager, and supply chain manager.
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Branding: Strong
Abacus is focused on growing as well as supporting its diversified sales efforts of its CBD MEDIC and CBD CLINIC brands. As Abacus products are compliant with FDA requirements, they benefit from therapeutic skincare and targeted pain relief claims on their product packaging. Abacus is currently marketing its brand through owned, paid, and earned media supported by a well-known advertising agency and public relations company.
Valuation: Neutral
Current share price: US $2.59
Price to Sales: 4.29 (Biopharma industry average = 7.5)
EV / Revenue: 1.66
52 week low/high: US $1.12-$10.49
Price/Book: 0.99
Financings: Strong
Abacus raised $38.2 million from the net proceeds received during a public offering in 2019 as well as $1.71 million from warrant exercises.
Risks: High
The markets in the CBD and hemp extract industries are competitive and evolving. Abacus faces strong competition from both existing and emerging companies that offer similar products.
Given the rapid changes affecting the global, national and regional economies, particularly within the CBD industry, no company can guarantee to maintain a competitive advantage in the market forever.
Recommendation: Strong
Abacus is focused on the commercialization and development of CBD based topical treatments for pain relief and therapeutic skincare with active pharmaceutical ingredients. Abacus is targeting the professional practitioner and consumer market through its CBD Clinic and CBDMedic product line.
Abacus products are manufactured by a cGMP compliant manufacturing facility and distributed across the United States. They’ve expanded their management team during the third quarter of 2019 with a new marketing director, brand manager, and supply chain manager.
Abacus is focused on growing as well as supporting its diversified sales efforts of its CBD MEDIC and CBD CLINIC brands. As Abacus products are compliant with FDA requirements, they benefit a lot with therapeutic skincare and targeted pain relief claims on their product packaging. Abacus is currently marketing its brand through owned, paid and earned media supported by a well-known advertising agency and public relations company. They also signed a deal with the NFL’s Rob Gronkowski.
Abacus raised $38.2 million from the net proceeds received during its public offering in 2019 as well as $1.71 million from warrant exercises.
Will its stock price improve in the long term? Very Likely.
Abacus has a very strong liquidity position through equity offerings and operational cost-efficiency. Abacus reported a cash balance of $28.2 million at the end of the third quarter in 2019 which is sufficient for them to cover operational costs for the next 12 months.
According to an announcement made in March 2020, Abacus is in the process to be acquired by Charlotte’s Web (for $68 Million) to become the world’s leading vertically integrated hemp-derived CBD company.
Abacus return on total asset (ROA) was 0.09% which implies that it made a profit of $0.09 on every $100 spent on asset. This is very good as compared to the industry average. Abacus revenue also experienced double-digit growth each year of operation and, finally, declared a positive net income in the third quarter of 2019. The Price to Sales is also very low. In short, the financials are healthy.
For these reasons, we think Abacus, at or near its current price of $2.59 a share, can be a good investment opportunity.
Abacus Health Products: Featured Cannabis Stock
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