Naturally Splendid Enterprises is a biotechnology and consumer products company. They perform development, production, commercialization, and licensing of a new generation of plant-derived, bioactive ingredients, nutrient dense foods, and related products. Are you considering taking a position in Naturally Splendid stock? Let’s take a closer look at Naturally Splendid to see if this hemp stock is a buy.
Naturally Splendid Fundamentals
HQ: Pitt Meadows, BC, Canada
Symbol: NSP (TSX), NSPDF (OTC)
Naturally Splendid is focused on the natural food industry by selling ingredients and food to consumers and commercial processors through health stores, grocery stores and online stores. They source their materials in bulk and then repackage them at the company’s facility with their unique branding. Their focus is on hemp based food products with plant-based ingredients. Naturally Splendid has a strong focus as a company but is this hemp stock a buy?
Market Cap: US $9.6 million
Enterprise Value: $10.7 million
# of employees: 15
Secondary: Western Europe, Australia, New Zealand
Majority Subsidiaries: Prosnack Natural Foods, Chii Hemp
Current production: None grown but they can produce millions of food bars and bites per month at their 17,000 sqft Prosnack facility in Pitt Meadows BC. They perform both contract manufacturing and their own branded manufacturing at this site.
Their Natera line has just secured a LOI with Flexitarian Foods of Australia for a 10 year manufacturing and distribution rights to their alternative meat line. They can produce 8 to 10 tons per shift per day of these products.
Vertically integrated: Yes
Horizontally diversified: Yes
Related: Why is Jushi Holdings a Strong Buy?
Revenue (ttm): $1.15 million
Outstanding shares (diluted): 218 million
CEO: Jon Craig Goodwin
CFO: Bryan Carson
Investor Relations: Brent Rusin
This team has more than 20 years in the food and beverage industry. They are strong in marketing and supply chain management.
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Naturally Splendid has created multiple successful products and brands both for contract manufacturer clients and Company branded products. Naturally Splendid branded products include: Natera, Natera Sport, Natera FX, Chii, Elevate Me, Woods Wild Bars, and Pawsitive FX.
Current share price: US $0.0356
52 week high/low: $0.028-0.115
Price to Sales: 10.84
Related: Is AXIM Biotechnologies a Buy?
Naturally Splendid has only $422k CAD in cash on hand. They have $4 million CAD in total assets and $5 million CAD in total liabilities.
The risks of investing in any cannabis company are very high given the volatility of the industry and the aggressive Canadian competition. The risk of investing in NSPDF are higher than others given their falling and volatile stock price, low revenue, and low cash flow.
Bottom Line: Is Naturally Splendid Hemp Stock a Buy?
Naturally Splendid is focused on the natural food industry by selling ingredients and food to consumers and commercial processors through health stores, grocery stores and online stores.
Naturally Splendid drives revenue from separate complimentary revenue streams through branded products and private label clients using its vertically integrated strategy. Naturally Splendid’s Natera line is their strongest brand.
Naturally Splendid’s products are sold in more than 1,400 stores across Canada. They have established quite diverse distribution networks across Canada, US, Western Europe, Japan, and Australia through partnerships and supply agreements.
During Q1 2021, they lost $743,636 CAD. Revenues decreased by 5% ($467k CAD). Sales during the quarter were $253k CAD. Given lower sales trends, the company is stopping contract manufacturing for other products and will focus on their own stronger brands.
This is good to hear as recently we believe they’ve lost focus on what they are good at. They had established a JV, Plasm Pharmaceutical, to develop covid treatments and other inflammatory and respiratory applications. We don’t know why but obviously this detracts from their core business model.
They recently announced a private placement for $2.5 million CAD of 50 million unites at $0.05 per unit. This raise should keep them going for the rest of the year and into 2022.
Naturally Splendid needs to focus on their sales. They have strong brands, they just lack business clarity. We hope to see this prioritized for the rest of 2021. Until then, Cannin.com maintains a Neutral rating for this hemp stock.
Naturally Splendid – Is this Hemp Stock a Buy?
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