Apologies for this, but have recently looked at the finances and operations in great detail (compared to companies listed on the TSX in this sector), and I see the fair value at 70c t0 80 cents.
The company would be far more profitable if it got rid of it's Australian operations, which are driving it into the red and are responsible for the overall losses in Profit after Tax (NPAT) of $1.5m in FY2017/18.
I cannot see the stock price rising until NPAT is back in the black, it's just that simple really.
The Australian dollar is weakening, which is another reason to divest the Australian assets.
The slow rate (and fear and reticence) of Aust government deregulation of the (full plant) CBD market, is yet another reason to divest the Australian assets.
The USA dollar is strengthening, which is another reason to divest the Australian assets.
Quite simply, there are no profits in Australia in Hemp/CBD, and the cost of production and operations is too high compared to other world locations.
I bought into 3 Seed rounds in 3 companies in Canada over the past 18 months, and have my eye on another 2 investments on the TSX in medical cannabis at the moment, this is definitely the place to play in this sector. Got seeds for TGOD and Emblem at 50c CAD, and another about to list. Also, look at beverages and oils, and at vertically integrated companies in Canada and Colorado and California.
EXL are not being smart by keeping the Australian assets, which are just going to gobble up profits (that are generated elsewhere) over the coming years.
Not sure when they are going to wake up to this though, or when they will make some decisions based on pure business profitability. When they do, then I'll know they have some management savvy.
With most Canadian companies it is about low energy costs, low production costs, high yields, and superb management.
Until EXL make the decisions to cut the Australian operations this stock will continue to fall on AUD weakness, slow Aust legislation, high cost of operating in Australia, and the high cost of logistics and transport in Aust, as well as the lack of science here (in comparison to Canada and the USA labs), and the lack of quality production facilities, and high labour costs.
IMHO, this stock will continue to fall until they make some difficult business decisions, and the most important at the moment is dropping the Australian operations, in order for the global business to return to profitability.
When you look at the financial reports, it sticks out like a sore thumb, and (from a business point of view) is more obvious than a bowling ball in a bag of diamonds.
Go and read the finances for this company (in detail).
I see 75c to 85c in the next 6 months. Be patient if you are interested here. Don't buy a falling knife, wait for the 10 day EMA to cross back above the 35 day EMA, with conviction, then buy.
Alternatively, if you want to make money in this sector, look to the TSX, CSE and TSX-V.
Unfortunately, for this company, the falling Aussie dollar is bad timing, but who was to know?
If they had business confidence leadership, then they would have listed on the CSE or TSX.V to begin with. Why they didn't is a definite concern, given the amount of finance thrown at these companies on those bourses.
DYOR carefully here, and be objective.
Gw
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