A third consecutive quarter of robust revenue growth is the catalyst that True Leaf Medicine International Ltd (OTCMKTS:TRLFF) needed to continue climbing the ladder after bottoming out from one-year lows. Renewed investor interest in the stock also comes on the heels of the company completing the construction of a cannabis cultivation and processing hub dubbed, the True Leaf Campus.
Share Price Analysis
A spike in trading volume after a period of subdued activity follows the listing of the stock in the OTCQX market, a development that will widen the company’s exposure to institutional investors in the U.S. The company’s balance sheet also appears to have received a boost following the closing of a convertible security funding.
It does not come as a surprise that True Leaf Medicine is currently trading in an uptrend, after shedding a significant amount of market value over the past year. A rally past the $0.36 mark underscores the presence of buyers in the stock.
With the stock trading above the $0.36 mark, the door is open for bulls to push the stock back to the $0.60 mark, a critical resistance level. True Leaf Medicine needs to rally and stabilize above the $0.60 mark, to have any chance of making a run for 52-week highs of $0.83.
Below the $0.60 mark, the stock remains vulnerable to further drops, given the underlying long-term bear trend. In our view, True Leaf Medicine is a breakout play as it continues to fire up when it comes to operational efficiency that has once again underscored its growth prospects.
About True Leaf Medicine
True Leaf Medicine casts itself as a leading cannabis and hemp wellness brand. The company is in the business of manufacturing and distributing hemp-based nutrition to the pet industry. The Company’s product line is made up of dog chews, dental stocks as well as supplement oils, currently in distribution in 2,000 stores worldwide.
Why is True Leaf Medicine Rallying?
Shares of True Leaf Medicine are rallying as investors react to the company reporting a third consecutive quarter of robust revenue growth. For the three months ended December, the company generated revenues of CA$652,370. For the nine months ended December, revenues totaled $1.72 million, a 69% year-over-year increase.
The company attributes revenue growth to its robust international sales team that continues to expand sales operations in Europe
“True Leaf’s impressive finish to 2018 was marked by record revenue growth, increasing our global retail presence by 55 percent, and several impressive hires. We now have strong momentum going into one of the biggest announcements for our brand to date. We look forward to sharing the transformation – or True Leaf 2.0 – with our shareholders, customers, and the global pet industry next month,” said CEO Darcy Bomford.
The company is reaping the rewards of its expansion drive in Europe where it currently operates a retail chain of 1,000 stores. The company is fresh from adding Arcaplanet stores to its distribution chain as it continues to strengthen its sales operations in Italy.
True Leaf Medicine expects revenue from its European operations to continue growing, having already added Pets Corner UK and Das Futterhaus to its distribution network. The company has also added seven hemp-based products for cats, as it continues to strengthen its product line for the European market.
“True Leaf continues to expand in key markets because our hemp solutions for pets are not only legally compliant but also safe and effective. We are excited to enter the Italian market with Acaplanet; Italy is estimated to be the number one European country in regard to the number of pets for the population, with a one to one ratio,” Bomford in a statement.
The company’s balance sheet has since received a $4.5 million boost on the closing of a convertible security funding agreement. The funding from the Lind Partners demonstrates the company’s growing credentials among the investment community.
With the new finances, the company remains well positioned to execute its business plan, which involves expanding the current product line and scaling global distribution network.
True Leaf Medicine is an exciting fundamental investment as it continues to trade at a discount. Revenue growth backed by an aggressive expansion drive affirms the company’s long-term prospects. For early movers, this is a stock worth paying attention to, as a breakout play amidst improving fundamentals.
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Disclosure: We have no position in TRLFF and have not been compensated for this article.