February 23, 2021 -- InvestorsHub NewsWire -- via Hawk Point
Media -- PAO Group, Inc. (OTC: PAOG)
shares are trading higher by roughly 63% since the start of
February. The jump in value comes after a series of announcements
showing PAOG positioning itself to benefit from multiple near-term
initiatives. They are also set to become a revenue-generating
company, with its first tranche of receivables expected to be
announced in its Q4 update.
Last Thursday, in fact, PAOG highlighted its anticipated revenue
expected from that CBD nutraceutical expansion initiative. They
also published an online, multimedia presentation detailing the
company's CBD nutraceutical development expansion plans, detailing
its strategic engagements with Puration, Inc. (OTC: PURA), North
American Cannabis Holdings, Inc. (USOTC: USMJ), and
Alkame Holdings, Inc. (USOTC: ALKM). That
presentation kept shares in demand.
PAOG shares remain actively traded, and investors appear to be
positioning ahead of several expected updates. Its focus on
CBD-based treatments targeting COPD is certainly attracting
attention.
Video Link: https://www.youtube.com/embed/WL_PixD5Ln4
The Trend Is A Friend
The increase in February is a continuation of a bias that
started at the beginning of the new year. To date, shares are
higher by roughly 328%. Better still, the trend is staying bullish
after PAOG announced accelerating its initiatives to develop CBD
alternatives to treat patients with symptoms associated with
Chronic Obstructive Pulmonary Disorder (COPD).
The bullish sentiment took a shot of adrenaline after a
multimedia presentation showed how PAOG plans to capitalize on
emerging opportunities in the booming nutraceutical product sector.
And even at roughly a penny, PAOG is already positioned to advance
a nutraceutical product line that can potentially compete against
more established, higher-priced companies. To its credit, PAOG
completed several transformative deals that clear a path to
monetize assets in the coming quarters.
More specifically, the expected benefits from an acquisition
made last year are coming into focus. It involved PAOG acquiring
RespRx from Kali-Extracts, Inc. The asset is a valuable one and
makes PAOG an immediate contender in the medical-grade cannabis
treatment sector to treat COPD. Notably, PAOG also acquired the
ability to leverage a patented cannabis extraction method that
shows tremendous promise to treat many diseases. COPD is the first
in line.
The addition of RespRx adds immediate fire-power to its product
pipeline. It also sets the stage for PAOG to target additional
indications where a better and safer standard of care is needed.
And while RespRx might be getting credit for the recent surge, it's
more likely that a combination of strategic accomplishments is
responsible for driving shareholder value higher.
Advancing Nutraceuticals With Help From PRCCI
In addition to PAOG's promising development-stage program that
could bring a pharmaceutical-grade nutraceutical COPD treatment to
market, PAOG also announced engaging with the Puerto Rico
Consortium for Clinical Investigation (PRCCI) to assist with
developing its proprietary Cannabidiol (CBD) extract into a
nutraceutical product. The intention of that joint effort is to
again find and develop an effective CBD-based treatment to target
COPD's debilitating effects. The alliance adds tremendous
credibility and sector expertise to the initiative.
Moreover, with PAOG's CBD-based treatment being a potentially
better treatment option that can replace addictive prescription
drugs with severe side effects, the company hopes to receive
expedited approval processes from a growing willingness by
regulatory agencies to accept CBD and cannabinoid compounds as
viable and effective treatment options. And "big pharma" is
watching the action, evidenced by Jazz Pharmaceuticals' (NASDAQ:
JAZZ) purchase of GW Pharma (NASDAQ: GWPH) for $7.2 billion earlier
this month.
Perhaps the biggest surprise is that in addition to its
impressive development-stage portfolio, PAOG has something that
most nano-cap stocks don't- REVENUES.
Revenues Are Value...Investors Take Notice
PAO Group is doing what most of its peers are not
doing...generating revenues. It's obviously an important
consideration to any stock purchase, but for development-stage
companies like PAOG, it can be a deciding factor.
Earlier this month, PAOG said it expects to announce revenues
during Q4 2020. Those results are expected to ger reported soon.
However, within its update, PAOG guided that revenues are expected
to continue through 2021 by capitalizing on multiple
nutraceutical-focused initiatives. They will also benefit from a
sales order agreement of $300,000 made through its cannabis
cultivation subsidiary acquired from Puration, Inc. in
2020.
Going out further, PAOG expects to receive approximately $50,000
in revenue per quarter for six quarters, with its first $50,000 in
revenue expected to be reported for Q4 2020. And there's more.
A deal is also in place with Alkame Holdings Inc. to develop and
distribute its CBD nutraceuticals. That deal not only will help
drive additional revenues toward the bottom line, but it also
brings in North American Cannabis Holdings, Inc. to take on the
distributor's role. Now, PAOG is in an alliance with two other
sector companies with a specific skill set. And with the propensity
of all three to make accretive deals, the likelihood for
consolidation or additional beneficial agreements among the three
is more than likely over the coming months.
By assembling the pieces of this emerging develop-stage company,
it's logical to assume that its valuation falls short of its
intrinsic value. And while the stock is surging on a percentage
basis, with shares trading at roughly two-cents a share, there are
justifiable reasons for the shares to continue higher.
Increasing revenues, accretive deals, and access to powerful and
innovative technology are only a few of the reasons to like the
stock at these levels. Even at levels 3X higher, PAOG can
substantiate its value. Of course, longer-term, 3X its current
price should be a small drop in a large bucket.
PAOG Can Transform In 2021
With the updates from PAOG exposing blue sky, investors have
been right to send shares higher. For this stock, "selling on the
news" makes little sense as the deals usually create immediate
value. Moreover, PAOG appears to be making deals only with industry
companies to help expedite its near-term plans. Thus, focusing on
where PAOG is going is a better strategy than evaluating a fair
price for what they have just done.
Indeed, PAOG is doing the things necessary for growth. First,
they have multiple and active development-stage programs. Second,
PAOG is making excellent strategic decisions to partner with
industry players who add specific expertise to accelerate its
plans. And, third, the company has positioned itself to receive
revenues over the next six quarters, an accomplishment that some
mid-cap biotechs can't claim.
One thing is clear- the current share price does not fairly
reflect the value that PAOG is creating. Moreover, a valuation of
its assets, combined with what the company can do in the next 3-6
months, is ample fuel to drive prices considerably higher. The
great news is that PAOG is transparent with its shareholders, and
it's likely that more information to detail growth is on the way.
There are just too many moving parts to think otherwise.
It's been said many times by traders- Share price rarely tells
the truth. But, despite the need for smaller companies to earn its
recognition rather than have it handed to them by paid CNBC
commentary, its stock prices eventually catch up with fundamentals.
Knowing that, PAOG may not be a stock to trade but rather a stock
to hold and watch mature.
And with several programs in action and partnerships developing,
the wait for higher stock price levels may not take as long as some
investors may think. PAO Group, Inc. is definitely out to impress
in 2021.
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