Stocks’ Details

Elixinol Global Limited

Organic Growth Supported Elixinol Global in 1H 2018: Elixinol Global Limited (ASX: EXL) posted revenues amounting to A$14.9 million in 1H FY2018 which reflects the YoY growth of 110% thanks to the organic growth opportunities. The robust momentum was witnessed with respect to the dietary supplements (Elixinol USA). The company had also stated that the favourable legislative changes supported the company with regards to the product as well as business profile.

 








EXL’s Revenues and underlying EBITDA (Source: Company Reports)

However, the company also witnessed the positive momentum with regards to its underlying EBITDA thanks to the Elixinol USA. The company has been making deployments so that it can tap the growth prospects which might arise in the future. It is also deploying towards the areas which could enable efficiencies in the production.

Plans to Improve Consumer Products’ top line revenues:  Elixinol Global Limited has been working towards tapping the growth opportunities on a global basis with regards to hemp-CMD as well as medicinal cannabis. As depicted by the company’s investor update for September 2018, the company has maintained its focus towards enhancing its top line revenues with regards to the consumer products for FY 2019. The company is also targeting to improve the EBITDA margin in FY 2019 with the help of product mix growth.

Stock Recommendation: On the daily chart of Elixinol Global, Moving Average Convergence Divergence or MACD and Relative Strength Index or RSI has been applied and default values have been considered. As per the observation, the MACD line has crossed the signal line and is moving in the upward direction thus, creating the bullish momentum. However, the 14-day RSI is near the overbought region. Once it reaches the overbought zone, there could be a fall in the stock price. Based on foregoing, we maintain our “Speculative Buy” rating on the stock at the current market price of A$2.400 per share.
 

Cann Group Limited

Stakeholder and Government Support Helping Cann Group: The management of Cann Group (ASX: CAN) had stated they have been encountering increased help from its stakeholders as well as they have witnessed numerous companies becoming the part of the industry. Moreover, the government is also extending support with regards to the broader sector.  The management had also stated the company happens to be in the robust position and can tap growth opportunities which might arise in the future. 


CAN’s Financial Results (Source: Company Reports)

In FY 2018, Cann Group Limited has garnered revenues amounting to $560,000 while its other income was $943,391. The company’s position with respect to the regulations happens to be decent. Moreover, the company also indulge in talks on a regular basis with government authorities. The company has been making substantial deployments in resources as well as people.

Robust Opportunities in Australian Region to Support CAN: The Federal Government has stated that the Australian producers can now target the offshore markets. Moreover, the countries are getting inclined towards the medicinal cannabis space and they are legalising them.As a result of these activities, the companies which are in the Australian region might encounter robust growth opportunities.

The company’s Project Tullamarine is expected to support Cann Group moving forward. As demonstrated by the company’s market update, if operated at the full capacity, the Project Tullamarine, has the potential to come up with the production of 40-50,000 Kg p.a.   

Stock Recommendation: On the daily chart of Cann Group Limited, Exponential Moving Average (or EMA) and Relative Strength Index (or RSI) have been applied and default values have been considered. As per the observation, the stock price has crossed the EMA and is moving downwards which reflects the bearish momentum. However, the 14-day RSI has reached the oversold region and there could be a rebound soon which indicates that it could witness bullish momentum. Meanwhile, the share price has fallen by 34.13% over the past six months as on 19 December 2018 and trading close to lower level thus posing an attractive opportunity for the investors to acquire the stock at these levels. Hence, we maintain our “Speculative Buy” recommendation on the stock at the current market price of A$1.840 per share (down 4.663% on December 20, 2018), considering aforesaid facts and current trading level.
 

Medlab Clinical Limited

Revenues, Cash Receipts Grew YoY: Medlab Clinical Limited (ASX: MDC) ended FY 2018 by generating the revenues of $5.55 million which the implies the YoY growth of 25%. Additionally, the company had also encountered the YoY rise of 47% with respect to the cash receipts from the customers.  However, the company’s net loss in FY 2018 witnessed the rise and stood at ~$4.6 million because of expenses incurred towards NanaBis™ support with regards to Special Access Scheme of the government as well as because of the research projects of the company.

MDC’s Performance (Source: Company Reports)

Additionally, the company had also managed to get an export license for the cannabis. This license has been granted to the company from ODC (or Office of Drug Control).  

Opportunities and Size of Support Medlab Moving Forward: The top management of Medlab Clinical are having an optimistic outlook about the future prospects of the company. As depicted by the company’s annual report for FY 2018, its research and development programs happen to be at a place which is having robust market size as well as potential.  

Additionally, the company had also stated that securing the approvals from the regulators in the Australian region also provides the opportunities for the company to comply with the regulatory measures of global markets.

Stock Analysis: On the daily chart of Medlab Clinical Limited, Moving Average Convergence Divergence or MACD has been applied by considering the default values. As per the observation, the MACD line has crossed the signal line and is moving upwards. However, the MACD line is about to cross the signal line again and after this crossover, there are expectations of bearish momentum. It must be noted that the crossover has not yet taken place.

As a result, we maintain our “Speculative Buy” rating on the stock at the current market price of A$0.385 per share.  
 

Stock Price Comparative Chart (Source: Thomson Reuters)
 
 

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