Is It a Good Idea to Buy Harvest One Stock Now?
Along with the technology sector, the COVID-19 pandemic has popularized the health and wellness industry. Harvest One (HRVOF) operates in this space and is primarily focused on improving sleep, and healing pain and reducing anxiety. It holds a substantial stake in companies like DreamWater, LivRelief, and Satipharm. Harvest One is still a pretty small company with a market capitalization of around $14 million. With the massive boom in the cannabis industry and an increasing number of investors seriously looking at cannabis stocks, it makes sense to take a closer look at HRVOF. But is it a good idea to buy Harvest One stock right now?
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HRVOF: Improved Financial Performance
Harvest One improved its financial performance significantly for the quarter ended September 30, 2020. It has undertaken an internal reconstruction process which has made a positive impact on the company’s performance. Several cost reduction and overhead reduction objectives along with better inventory management capabilities were achieved.
The financials, though, still showed a net loss, however, there was about a $2.45 million reduction in loss compared to the same period in 2019 which is a whopping 43% improvement year-over-year. It reported a $2.99 million net loss from continuing operations during the current quarter compared to a net loss of $5.23 million in the same period last year. See the latest Harvest One financials below:
Management said this was possible because it could successfully achieve a reduction in salaries and other administrative expenses in general. The company also utilized around 68% less working capital compared to the same period of last year to run operations. Adjusted EBITDA showed a 51% improvement, with a loss of $1.6 million for the current quarter compared to a loss of $3.26 million in the same period of 2019.
The overall balance sheet showed improvement with the $8.2 million strategic sale of the Duncan Facility. This also helped in reducing the company’s overall liabilities. The management has said it is committed to bringing further internal changes in operations to improve its long term prospects. Harvest One also recently sold its majority interest in Greenbelt Greenhouse for $2.85 million in net cash.
Harvest One’s Future Expansion Efforts
Harvest one has been consistently committed to several R&Ds to improve its product base. After divesting itself of Duncan and implementing cost efficiencies, it is planning to launch its OTC offerings from Dream Water and LivRelief across markets.
Harvest One also entered into a licensing agreement with Costa LLP, the purchaser of the Duncan facility to facilitate the production, distribution, and sale of its cannabis 2.0 product lines under the LivRelief brand which is currently sold through regulated dispensary outlets across Canada.
It will also produce cannabis-infused topicals for Canada. Its subsidiary Satipharm is keen on offering Gelpel category products and new THC based formulations for medical application. Apart from Canada, it plans to expand its foot in the rest of North American market too. The company has said, “Additionally, Satipharm will build on the existing distribution agreement with Health House in Australia to facilitate expansion throughout Asia where regulations allow”.
It says it will launch another 10,000 stores in America itself by the end of 2022. Exploring new channels for the growth of its consumer brands is also on its to-do list. Leaving aside the retail stores, expansion of e-commerce stores with further emphasis on the Amazon channel is also on the cards. All its subsidiaries are also actively taking part in the expansion strategies.
The company’s strategy seems to be paying off and the hemp stock could turn out to be a good long-term bet.
Is It a Good Idea to Buy Harvest One Stock Now?
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