Namaste Technologies Inc (OTCMKTS: NXTTF) finds itself in unfamiliar territory after plunging 80%, over the past year. A long-term engulfing bearish trend raises serious concerns about the stock’s long-term prospects.
Namaste Price Analysis
Failure by the company to issue financial results for the full year ended November 30, 2018, has all but continued to compound the company’s woes in the market. In addition, the CEO and the CFO have since been hit with a Management Cease Trade Order.
Amidst the woes, Namaste Technologies has sought to reinvigorate its long-term prospects and market sentiments with a string of strategic investments. The company has since completed a share acquisition in Pineapple Express Delivery, gaining access to a valuable asset when it comes to cannabis delivery in Canada.
Namaste Technologies has also reiterated plans to enter the edibles market having completed a 49% stake acquisition in Choklat. The investments appear to have propped the stock’s market sentiments if a spike in share price in recent weeks is anything to go by.
The stock has bottomed out from the $0.39 level to the $0.54 mark on high turnover in traded shares. Given the underperformance of the past year, the stock might have to find support above the $0.60 mark to affirm suggestions it has clocked a bottom and due for a correction higher.
Below the $0.60 mark, Namaste Technologies remains susceptible to further drops given the underlying bearish trend. Conversely, above the $0.60 mark, price action indicates the stock could make a run for the $1.20 level, which happens to be this year highs.
For the stock to turn bullish given the descending bearish trend, it will have to rise and stabilize above the $1.20 technical level.
What Does Namaste Technologies Do?
Namaste Technologies is an e-commerce company specializing in the sell, of cannabis products as well as accessories. The company retails vaporizers as well as smoking accessories through its e-commerce platform in 26 countries. It also designs, manufactures and distributes medical cannabis products.
Namaste technologies market sentiments have turned positive if a spike in share price as well as market activity, from the $0.39 level is anything to go by. The spike could as well be as a result of investors taking note of the strategic investments the company has made as it seeks to safeguard its long-term prospects amidst underlying woes.
In March, the company moved to expand its footprint into the edibles market with the acquisition of a 49% stake in Choklat for $1.5 million. The transaction provides the company with access to a premium chocolate manufacturer with a robust sales network both online and through a network of distributors across Canada.
According to interim CEO Meni Morim, the transaction accords Namaste Technologies the security of supply and manufacturing. It should also provide capacity for the recreational market, once cannabis edibles become legal later in the year.
“Choklat is a great acquisition for us with a vast offering of existing products that can be easily infused with THC or CBD and sold as edibles. Their small batch manufacturing model is a great fit within the new proposed regulations for edible cannabis products,” explained Mr. Morim.
Namaste Technologies has since followed the investment in Choklat with yet another investment in Pineapple Express Delivery. The acquisition of a 49% stake in the Toronto-based cannabis Delivery Company should strengthen Namaste cannabis distribution network.
With the investment, Namaste should be able to get medicinal cannabis, to customers in the greater Toronto area with ease. The investment also underscores the company’s growth strategy that focuses on investing in innovative companies capable of bringing value and access to a broader target market.
Even as Namaste Technology embarks on an investment drive, its sentiments in the market continue to take a hit on failure to post financial results for the year ended November 30, 2018. The company has had to appoint a new auditor as it seeks to complete an audit of its books of account.
Namaste Technologies has started bottoming out after taking a significant hit over the past 12 months. A string of positive developments should continue to strengthen market sentiments. We believe NXTTF is deeply undervalued and one of the top plays for investors looking for long-term exposure to cannabis space.
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Disclosure: We have no position in NXTTF and have not been compensated for this article.