What do you think of Naturally Splendid?
Thanks for the assignment. This will be my first analysis of Naturally Splendid Enterprises Ltd. (NSP TSXV) which is a biotechnology company focused on industrial hemp and cannabinoid compounds. NSP has a portfolio of patents and is using its intellectual properties to expand into nutritional biotechnology, cannabinoid neutraceuticals, retail super foods, and supplement consumer products.
The stock has a market capitalization of $14.35 million and average trading volume of 165,777 shares a day over the last three months. I would suggest that these two metrics alone would make this a speculative investment. A quick look at the company’s income statement indicated that expenses have exceeded revenue.
An audit of the charts will add texture to my evaluation of this investment.
The three-year chart outlines the downtrend that has dominated the charts since NSP hit its high in April of 2015. The stock has offered trading opportunities most recently in late January of 2016 when it jumped from near $0.24 to the $0.48 range in five trading sessions. Sadly that was as good as it got. Since early February NSP has been giving up ground.
The six-month chart depicts the downtrend line that has been in place since the early February highs. Make note of the resistance that has come in along the 50 and 200-day moving averages since April.
NSP is what I would call a story stock. Their story is that their intellectual properties focused on the industrial hemp and cannabinoid markets will drive value into the stock. That may transpire in time but it’s not evident at this time. I would advise caution in dealing with a stock that is struggling with a downtrend and expenses that exceed revenue.
Next time I will re-examine the situation at Lucara Diamond Corp . (LUC TSX) for Bola.
Make it a profitable day and happy capitalism!