A record-breaking quarter and a push for a 9th straight quarter of growth and profitability are the latest catalysts pushing Novus Acquisition & Development Corp (OTCMKTS:NDEV) up the charts. The stock is already up by more than 80%, having turned bullish in recent weeks.
After a poor start to the New Year, the stock has turned bullish in recent weeks as bulls continue to overpower bears. A breach of the $0.43 mark, on high turnover of traded shares, is a development that continues to arouse suggestions that the stock is headed back to the top after a brutal first half.
The stock is currently trading at the $0.50 handle. It faces immediate resistance at the $0.70 handle, above which bulls could push it to 52-weeks of $0.95. Any sell-offs or pullbacks will have to contend with strong support at the $0.44 mark. A breach of the support level could see the stock plunging to the $0.30 mark.
About Novus Acquisition Development
Novus Acquisition and Development is a provider of health insurance and related insurance solutions in the wellness and medical cannabis space. The company boasts of a robust pipeline of the insurance business, made up of health, life, and fixed annuities. The company’s business model includes providing health insurance and medical plans to patients in pursuit of medical marijuana.
Novus Acquisition and Development is the subject of increased investor interest in the market after reporting record revenues for Q2. Revenues of $43,360 represented a 36% year over year increase, marking an 8th consecutive quarter of revenue growth.
The company attributes the increase to awareness and visibility of the Novus MedPlan offering. Improvement in key performance indicators, as well as in-house marketing efforts, resulted in a greater number of patient members, thus accelerating revenue growth. Operating income consequently increased to a record high of $25,860 representing a 60% operating profit margin.
“I am proud to report our 8th consecutive quarter of revenue growth, and we are in great position to accelerate our market penetration and growth in the second half of 2018. Our confidence is due to our recently signed collaboration with Enlighten and having successfully added 13 dispensaries, cultivators and manufacturers,” said CEO, Frank Labrozzi.
According to the Chief Executive Officer, they remain on course to report a ninth consecutive quarter of revenue growth and profitability. The company is basing its estimates on the fact that the medical cannabis market is expanding at an impressive rate thus presenting new opportunities.
The company has already added 13 new dispensaries, cultivators and manufacturers that are to offer anywhere from 30% to 50% on Cannabis medications. The addition is part of the company’s push to expand its network of provider base.
Novus Acquisition Development has also opened discussions with potential strategic partners, cannabis businesses as well as dispensaries. The company remains optimistic of reaching agreements that will result in revenue opportunities heading into 2019.
Revolution Insurance Technology Partnership
In addition, the company has signed an agreement with Revolution Insurance Technologies (RIT), as part of the latest push to automate and streamline insurance enrollment process. The FinTech Company boasts of a services platform designed for insurance carriers and brokers. The platform allows agents to create customized benefit packages from diverse carriers and bundle them to meet the needs and price of customers.
By teaming up with Revolution Insurance Technologies, the company should be able to sign in more clients during the fall as Americans move to sign up for health insurance plans. The RITs platform should thus help the company capture more enrollees than before.
“We experienced in the past where insurance entities showed resistance in selling cannabis as a benefits package, we are now seeing Novus Cannabis MedPlan gain recognition as another avenue of sustainable revenue recognition as we think long term,” said Mr. Labrozzi.
Novus has made impressive strides in strengthening its business empire when it comes to health insurance. The stock remains well positioned to continue surging in part because the company operates in an industry that is recession proof. Healthcare insurance will always be a priority given the more than 390 million physician visits every year.
Novus being a part of the health insurance will always shine regardless of how the economy performs. Diversifying its footprint into the cannabis sector is another aspect that strengthens its long-term prospects given the rate at which the multi-billion sector is growing.
After the recent spike higher, the stock has turned bullish. That said, it might be wise to wait for pullbacks to enter long position while betting on Novus long-term prospects.
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Disclosure: We have no position in NBEV and have not been compensated for this article.