After pulling back from the $0.07 handle, the $0.03 handle has
emerged as a strong support level. As long as the stock trades,
above the $0.03 mark, it remains a strong buy, in our view, given
the strength of the company’s core business.
A close below the $0.03 mark, on the other hand, could see the
stock dropping to the $0.02 handle, seen as a key support level,
below which the stock could fall to its 52-week lows of $0.01.
Before we carry out a detailed analysis of why we believe the
stock is destined to rise from the current trading levels, let us
review what Puration does in pursuit of growth and shareholder
value.
Puration Business Description
Puration Inc. bills itself as a water purification company that
designs, develops, produces and distributes water purification
products. Its water purification systems include personal water
filter bottles as well as portable biological filtration devices
and replacement filters.
Also, the company is in the process of expanding its business
portfolio in the cannabis sector where it hopes to generate
significant shareholder value in future. Currently, the company’s
flagship product in space is the EVERx Sports Water product
line.
A growth in demand, of the company’s EVERx Sports Water, infused
with 10mg cannabis, is one of the reasons why we remain bullish
about the company’s long-term prospects. The management team
reports that it has received unsolicited calls from distributors
and retail giants looking to carry the product.
“We believe the growing interest stems from having a good
product that stands out from other CBD infused products combined
with our good fortune at having won our first retail engagement
with Drug Emporium. Drug Emporium is a respected brand name and
having EVERx on shelves at Drug Emporium is a privileged that we
know enhances the status of our EVERx product. Now other
distributors and retail chains are showing interest and we are
ramping up to meet demand,” said CEO Brian Shibley
What next
Retailers and distributors carrying the CBD infused EVERx water
product, should go a long way in broadening its awareness. The
result should be more sales and increased revenue for Puration,
which is aggressively looking for ways to diversify its revenue
streams.
In what is seen as an attempt to curve a bigger slice of the
lucrative cannabis water business, Puration has announced plans to
launch two new products. Strawberry Kiwi and Lemon Lime flavored
EVERx CBD infused sports nutrition, are the new products the
company plans to unveil at the Arnold Schwarzenegger’s Annual
Arnold Sports festival in March.
The unveiling comes at a time when EVERx has become a household
name in the CBD infused marketplace and one of the only infused
products in the sports nutrition category. The product line
presents a unique opportunity for Puration to be a big player in a
market set to be worth $3 billion by 2021.
Unlocking Shareholder Value
Management has embarked on a new strategy that once complete
will unlock more shareholder value. As part of the new push,
Puration plans to divide its cannabis-infused business and patented
cannabis extraction business into two traded public companies.
“The first step in the strategy is to structure Purgation’s
extraction capacity into a new subsidiary. The next step will be to
spinoff the cannabis extraction subsidiary in conjunction with a
Regulation Crowdfunding transaction to capitalize the new
independently listed company. The spinoff plan includes a dividend
distribution of stock in the new independently listed company to
shareholders of the parent company,” Puration in a statement.
The parent company name is to be changed to reflect its
cannabis-infused beverage operations with the two subsidiaries also
receiving names reflecting their operational extraction focus.
The management expects the combination of the two to yield a
higher return to shareholders, than a single stock representing the
integrated value of the two.
Bottom Line
Puration has set its eyes on the cannabis space given the growth
opportunities available in the multi-billion industry. The company
is in the process of opening a cannabis extraction facility as it
looks to pursue California’ $10 billion legal cannabis market.
Also, eyeing growth opportunities across the border, the
company has set its eyes on Canada’s $8 billion legal
cannabis-infused beverage marketplace.
Taking into consideration the growing demand for the company’s
flagship product and the business expansion plans, Puration appears
to be undervalued at current levels. Puration remains perfect for
anyone looking to pick out some exposure in the cannabis space,
given that it is highly undervalued with tremendous prospects for
growth.
We will be updating our subscribers as soon as we know
more. For the latest updates on PURA, sign up below!
Disclosure: We have no position in PURA and have not been
compensated for this article.
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