Hemp Inc Soars 74%, Is the Hemp Stock a Buy?
The best time to buy stocks is prior to the presence of a significant catalyst on the horizon. Currently, the global cannabis market is on fire with many investors trying to gain a foothold in this nascent industry. Also, with President Joe Biden winning the US elections, the cannabis sector has found another reason to rejoice. Let’s take a look at one cannabis stock that’s generating significant gains in 2021. Las Vegas-based Hemp Inc. is mainly associated with processing and farming of industrial hemp. The company also extracts CBD oil and imparts valuable education to cannabis cultivators. This particular hemp stock has been extremely volatile and had even hit the rock bottom towards the end of last year. Although, the hemp stock has recently recovered, volatility still exists. Hemp Inc Soars 74%, Is the Hemp Stock a Buy?
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The Global Hemp Industry is Booming
The Hemp Industry is booming. As per a market analysis report by Grandview research, in 2020 the global hemp industry was valued at $5.33 billion and its value might reach $15.26 billion by the end of 2027 indicating a huge TAM opportunity for hemp companies around the world. In addition to Grandview’s research, there are several other reports indicating the explosive growth of the hemp industry. Looking at the growing demand for hemp oil and fibers in sectors like automotive, construction, food and beverage, personal care, or textiles, these staggering numbers don’t seem surprising.
Though CBD- rich hemp plants are legal in the US at the federal level, hemp producers must ensure the THC level doesn’t exceed 0.3%. However, last year several new rules and regulations like low permit fees for hemp growers in Pennsylvania or New Jersey’s own online hemp pilot program came out which ensured the industry has enough secular tailwinds as well as liberal policies that will benefit Hemp Inc and peers.
Hemp Inc. is planning to take full advantage of this opportunity. In 2021, Hemp Inc intends to expand its farming and commercial harvesting operations in South Carolina and Indiana. Also, it has been aggressively launching new products consistently and shipping out products to its line of stores across countries. The company plans to include a total of 50 brands in its catalog. But should I buy Hemp Inc Stock?
Hemp Inc’s Unsatisfactory Financials
The hemp market offers plenty of strong growth opportunities. But the quarter ending September 2020 wasn’t so promising for Hemp Inc. While in its previous quarter the company had a near 300% boost in the sales, for the September quarter sales fell flat. Hemp Inc’s revenues were only $0.47 million against the $1.59M of last quarter and $0.82 million in the same period of last year.
The company’s operating expenses against the reduced revenue were more or less the same as last quarter but with a significant difference when compared with the prior-year period. However, a reduction in the net loss was still possible due to the decline in interest expenses.
Hemp Inc still has plenty to achieve to help establish a strong footing in the hemp industry. Investors are going to rely on it only when they see consistent and profitable returns being bestowed to them either in the form of capital appreciation or dividends. Though the company has been taking several steps like launching a series of unique offerings or be it successfully curbing operational expenses over the years, a lot more action is still required to scale up the future sales and thereby see future profits.
Bottom Line: Is Hemp Inc Stock a Buy?
The hemp industry is exploding and Hemp Inc. is continuously coming up with exciting offerings. However, the company still has some way to go. The hemp stock has more than doubled since January 25. The company has a market capitalization of just $35 million.
Apart from increasing the sales, Hemp Inc should focus on preserving its sales along with customer retention. There is an excessive amount of volatility in Hemp Inc’s share price and losses have piled up. Hemp stock investors may want to hold off on taking a position in Hemp Inc stock for now – especially since there are plenty of other huge opportunities on the horizon.
Hemp Inc Soars 74%, Is the Hemp Stock a Buy?
Cannin Investment Group: Your Hemp Stocks Experts
Cannin.com is your trusted resource for top hemp stocks. Our team of financial experts evaluates all emerging hemp stock investing opportunities. We aggregate hundreds of hours of market research to provide tips on the best hemp stocks for 2021.
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