Is Amyris One of the Best Penny Pot Stocks for 2021?
Plenty of penny pot stocks have had tremendous success in 2020. One such stock is Amyris Inc where hedge funds have been showing interest and where one of the most renowned venture capital investors, John Doerr of Kleiner Perkins has bought 13.8 million shares this quarter. But is Amyris one of the best penny pot stocks for 2021?
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Amyris, Inc. (NASDAQ: AMRS) is a manufacturer and trader of chemical products like flavors and fragrances, pharmaceutical products, cosmetics, etc, and has customers from around the world including pot companies. This penny pot stock is one of the best-valued ancillary marijuana stocks as of now and has demonstrated amazing growth.
Amyris: Another Successful Quarter
Total revenue for the quarter was 58% more compared to Q3 of 2019. On an annual basis, an enormous growth of 203% was seen in the consumer segment and around 21% in the ingredients section. The strong improvement in product margins helped in increasing the gross margin by 41%.
Adjusted EBITDA also rose as a result of the increased revenue but the company hasn’t been able to achieve a positive EBITDA yet. However, net loss reduced to $23 million compared to $60 million in 2019.
Amyris also achieved significant cost reduction in Q3. It’s selling, general and administrative expenses reduced by about 10%. Further, the company’s interest cost was down 61% due to a 41% reduction in debt as well as a lower average interest rate.
Looking at the current trend, it seems that Amyris can start posting a positive EBITDA with a little push on the revenue side and a little more reduction in costs.
Amyris: An Eco-Warrior
Now, more than ever, investors want to be identified with environmentally ethical companies. Even the largest asset manager on earth, BlackRock, recently announced it’s initiatives to favor companies serving as environmental stewards. To put it simply, people feel good about investing in companies that follow ESG (environmental, social, and governance) norms. Amyris is one such company.
For instance, Squalene is a natural oil found in the liver of sharks and is used in vaccine preparation to improve its efficiency. About 3,000 sharks are required for one ton of squalene. The shark-based squalene is also used in COVID vaccines and studies indicate that millions of sharks might be killed for the preparation of the COVID vaccine.
Amyris with its patented technology and manufacturing process has successfully produced squalene from sugarcane and it seems the product can be a sustainable and scalable alternative to the shark-based squalene. The company has delivered some samples to pharmaceutical companies and expects the product to be commercialized by the end of the fourth quarter.
This product is a revolutionary one in vaccine production and if things materialize there is no looking back for Amyris. The company also partnered with IDRI in the production of RNA vaccine for COVID-19 using its semi-synthetic squalene technology.
Bottom Line: Is Amyris One of the Best Penny Pot Stocks for 2021?
Amyris has built an excellent portfolio of offerings over these years. Its consumer portfolio of products is the most popular. This year the company achieved a 3x growth in the consumer product segment against the targeted 2x growth and expects to reach a segment market value of $800 million based on the current revenue rate.
It also won the prestigious 2020 Popular Science Best of What’s New Award for its revolutionary sugarcane derived sweetener, Purecane, which is said to have zero calories and no bitter aftertaste. Such recognitions certainly add to the popularity and goodwill of the company and helps to boost the customer base.
The way Amyris is trying to achieve its differentiation strategy it seems the penny pot stock has a strong footing and may be an excellent stock to add to your portfolio.
Is Amyris One of the Best Penny Pot Stocks for 2021?
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