Puration Inc. (OTC Pink: PURA) shares are keeping their bullish edge. Last week, shares consolidated near their two-week highs after a massive move higher. Starting the new week, PURA shares on-trend to attack a twelve-month high set earlier in February.
Investors appear to be positioning ahead of several potential catalysts. PURA has announced at least three deals that set up the back half of 2021 for tremendous growth. And its 70-acre development in Farmersville, Texas, is attracting attention for providing a hub from which PURA can accelerate multiple projects intended to create near-term shareholder value. Construction of the facility is expected to start this summer.
Moreover, deals with Alkame Holdings (OTC: ALKM), North American Cannabis Holdings (OTC Pink: USMJ), and PAO Group (OTC Pink: PAOG) not only expose near term revenue-generating opportunities but also help to diversify the company’s business strategy. Plus, its EVERx CBD-infused water is expected to deliver more than $2 million in revenues for 2020. Those results are expected to be announced soon. Combined, PURA may be in an ideal position to capitalize on multiple market opportunities during the next few quarters.
Investors are bidding up shares in anticipation of such an event.
Reasons To Like Puration Stock
Announcements made last week that included PURA not only added momentum to its pace of growth but contributed to a growing level of investor enthusiasm. After all, they did send the stock higher by triple-digit-percentages earlier this month following a series of announcements that position PURA to accelerate its growth this year. Each deal brings both near and long-term value.
In fact, investors began to drive the share price higher in December, after PURA announced taking a 5% stake in Alkame Holdings, Inc. The interest is not only accretive from a business relationship, but it has also added strength to its balance sheet from ALKM’s surging by more than 512% since the deal was announced. And while fluctuations in share price can change the balance sheet impact over time, the agreement itself provides potentially immediate pricing concessions as Alkame is PURA’s packaging and logistics partner for its popular EVERx CBD-infused water. That flagship product generated more than $2 million in revenues in 2019 and is expected to report better results for 2020. Puration already said that orders have exceeded $1.9 million as of the third quarter. Its Q4 revenue announcement could be the next catalyst.
Investors are also absorbing the news that PURA expects to break ground later this year on its 70-acre property in Farmersville, Texas. That facility will become the epicenter of PURA operations and is being designed to accelerate multiple project initiatives. PURA published a multimedia presentation that gave a detailed overview of how the company can leverage this planned facilitate to attract new partnerships and/or joint venture opportunities in diversified markets.
Already, PURA is expecting the facility to play an instrumental role in launching its new hemp lifestyle brand business that targets a $5 billion industrial hemp market. By 2027, that market is expected to surge toward a more than $15.2 billion opportunity.
Video Link: https://www.youtube.com/embed/X6kngsIey8A
More From Its Farmersville Hub
Investors are also paying attention to PURA’s guidance that the facility can be a game-changer for multiple initiatives. And while the build-out requires some forward-thinking analysis, PURA’s recently announced partnerships put in place a plan that allows PURA to capitalize on creating new and expanding existing partnerships with other small hemp-focused companies. Plans are already in place to pursue pilot products showing the full industrial utility of hemp.
In fact, PURA already announced a partnership with PAO Group, Inc. to build an indoor hemp cultivation operation to develop a proprietary, pharmaceutical-grade hemp cultivar. That deal is an extension of its current plans and adds exposure to a billion-dollar CBD pharmaceutical market.
Two other deals can impact the trajectory at PURA. The first is again leveraging its relationship with Alkame Holdings Inc. In what could become a substantial revenue-generating deal, PURA and ALKM are advancing plans to produce and test market a CBD-infused liquid sugar, a CBD-infused pet food supplement, and CBD-infused consumer products. The combined market value easily extends into the billions. Keep in mind, too, that the duo does not have to bring products to market. They can develop and license their creations to monetize those assets with little capital exposure.
Another deal made with North American Cannabis Holdings, Inc. is also piquing investor interest. That deal, announced earlier this month and referred to by PURA as “strategic negotiations,” could accelerate penetration into new verticals. North American Cannabis Holdings has experience in diverse segments in the CBD and cannabis space. Although details have not been released, the surge in USMJ stock leads some investors to believe the move comes ahead of a more detailed overview of the PURA alliance. Both stocks reacted positively to the news.
Accumulation Into March 2021
The better news from an investor’s perspective is that the rise in PURA’s market-cap results from steady accumulation. Thus, the technicals remain in balance, allowing the stock to move appreciably higher without significant resistance. Also notable is that the more than 134% increase in share price came after strong revenue guidance.
The stock started its first leg higher in January after PURA said that revenues from its EVERx CBD-water will again reach, or surpass, $2 million. Investors took the news well, noting that its flagship CBD water sales were not materially impacted by the headwinds caused by COVID-19 restrictions. Going forward, investors are likely pricing in an expectation that sales for EVERx can resume the pace of growth it had during 2019, setting the stage for appreciably higher revenues this year. And while EVERx may deliver the lion’s share of revenues this year, PURA has been consistent in telling investors that it’s just one asset in a growing portfolio of products and interests that PURA plans to exploit this year.
Thus, the accumulation of shares, their orderly increase in value, and PURA’s willingness to seize value-generating opportunities have all combined to drive shareholder value higher. And while the build-out of its Farmersville hub will take some time, other deals fill investor’s demand for value creation.
In particular, PURA’s exclusive license to a novel cannabis extraction process could be in play to facilitate penetration into new billion-dollar-market opportunities. The company has already noted the utility of that license to accelerate the creation of new brands and products that target the booming CBD beverages, edibles, and cosmetics markets.
The Biden Administration Wild Card
Other factors are also in play with the Biden administration expected to eliminate many regulatory restrictions in the cannabis space. Broad speculation among investors is that if he changes restrictive federal policies, it will generate a broad-based sector bull market that could ignite a massive run in cannabis stocks. And PURA would likely be included. If so, it could put PURA front and center as an emerging growth stock in a sector that will receive massive attention.
Perhaps the best way to address the rapid rise in share price value is that the appreciation comes as PURA stays transparent to its investors. Although they regularly put out news, reading between the lines shows that the company is piecing together an excellent portfolio of value-creating assets. And despite the triple-digit-percentage gains in 2021, PURA has undoubtedly set the stage to accelerate its growth this year. That, too, is keeping investor’s attention.
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