Green Organic Dutchman Holdings Ltd (OTCMKTS:TGODF) has lost more than 50% in market value ever since it came under immense short selling pressure at the end of September. While the selloff is a major point of concern, it might as well act as a good buying opportunity for long-term investors.
Green Organic Dutchman Price Analysis
Ever since the stock came under immense short selling pressure, Green Organic Dutchman management have moved with speed to re-affirm the company’s long-term prospects. The stock has also attracted positive rating from Canaccord analyst with an upward share price target.
According to the brokerage firm, the company remains well positioned to make good use of emerging international opportunities. Canaccord research analyst Derek Dley has since initiated coverage, of the stock with a buy rating, a development that has gone a long way in fuelling a buying spree of the stock.
Amidst the recent share price spike, Green Organic Dutchman remains engulfed in a long-term downtrend.
The stock needs to rise and stabilize above the $3 a share level to reaffirm suggestion of easing short selling pressure. Below the $3 a share level, the stock remains susceptible to further declines. Above the $3 a share level, bulls should be able to push the stock to the $4 a share level, above which the stock would be bullish.
What Does Green Organic Dutchman Do?
Green Organic Dutchman operates as a cannabinoid research and development company through its subsidiary. The company is also involved in the production of organic dried cannabis as well as cannabis oils and edibles for medical applications.
$5.40 Share Price Target
Green Organic Dutchman has experienced an uptick in trading activities underlining renewed investor interest in the stock. The increase follows Cannacord equity research firm initiating coverage of the stock with a share price target of $5.40.
According to the firm’s analyst Dley, Green Organic Dutchman remains well positioned to take advantage of multiple international opportunities. The fact that the company also has strong exposure on the Canadian organic marijuana market is another development that continues to strengthen investor confidence in the stock.
Green Organic Dutchman remains well funded thus should be able to produce 430,000 pounds sufficient for meeting demand for both medical and recreational cannabis market. According to the analyst, the company has about $350,000 million in cash, an amount that is sufficient for pursuing opportunities in the burgeoning multi-billion sector.
The company achieving full production capacity could result in the generation of the annual revenue of between $1.1 billion and $1.4 billion, a milestone that would see it generate significant shareholder value.
According to Dley, Green Organic Dutchman should become free cash flow in 2020 given its strong competitive edge supported by a well-refined cannabis product pipeline. In addition, the company has made important strides in its bids to expand its footprint in pursuit of new opportunities for growth.
Green Organic Dutchman has already completed the acquisition of HemPoland, a company that gives it access to some of the biggest and fastest cannabis markets in Europe. HemPoland already has exposure to 14 European countries.
Management Build Up
Green Organic Dutchman has also reaffirmed its commitment to building a top-level management team as it continues to focus on the future. It has since confirmed the appointment of Emily Demo as the Marketing Brand Director and Terry Reid as the Director, Legal, and Compliance.
The company is looking upon Emily to drive the global TGOD brand including the global edible strategy.
“We are pleased to add a Marketing executive of Emily’s caliber to the TGOD team. We have received tremendous feedback from consumers about our organic-certified platform, and now Emily will help drive that strategy across a number of verticals. She has a winning track record and a keen understanding of the organic consumer,” said Andrew Pollock, Vice President of Marketing.
Green Organic Dutchman underperformance over the last one month should scare any investor. However, price action activity does not paint a clear picture of the underlying fundamentals as well as the company’s financial health.
The company boasts of a solid balance sheet that it can use to pursue growth opportunities in the burgeoning cannabis sector. The company has also completed a major acquisition that paves the way for it to pursue growth opportunities in Europe.
The stock should take a flight on investors taking note of the company’s growth prospects especially on research firm Canaccord initiating coverage with a share price target of $5.40.
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Disclosure: We have no position in TGODF and have not been compensated for this article.