As we approach the end of 2023, investors may be considering rebalancing their portfolios, particularly with the recent rally of Neoleukin Therapeutics (NLTX) and CbdMD (YCBD). Both companies operate within the pharmaceuticals sector, with CbdMD specializing in drug manufacturing - specifically specialty and generic drugs. CbdMD, listed on the NYSE MKT, has been a notable performer in recent weeks. Despite a challenging fiscal year ending in September, marked by a loss of $7.8M in EBITDA and a negative operating margin of 0.3, the company has shown resilience. The firm's 50-day moving average stands at $0.7604, significantly below its 200-day moving average of $2.4324, indicating potential for growth. The company's recent financials reveal a gross profit of $22.3M against revenue of $26.3M, despite a quarterly revenue growth decline of 0.29. However, the firm's selling and marketing expenses are quite high, at $15.4M, which has contributed to its negative profit margin of 0.82. Despite these challenges, analysts remain optimistic about CbdMD's future. The lowest estimated target price stands at $3, with the highest also at $3. This, coupled with a possible upside price of $6.89, suggests potential for significant returns. The company's market capitalization is currently $1.9M, with cash reserves of $6.7M. As we move into the new year, investors should closely monitor CbdMD's performance. The recent rally presents an opportunity for portfolio diversification, particularly for those interested in the pharmaceuticals sector. However, as always, careful consideration of the company's
financial health and market conditions is essential before making any investment decisions. Today, we may observe evidence suggesting that Neoleukin Therapeutics could recover at a slower pace from its current downturn, as its shares increased by 1.16% compared to CbdMD's 1.52%. As numerous rational traders are attempting to steer clear of the pharmaceutical sector, it is logical to delve deeper into CbdMD Inc. and understand its position relative to Neoleukin Therapeutics and other comparable entities. We will discuss some of the competitive aspects of both CbdMD and Neoleukin.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two entities, such as CbdMD or CVSI is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.
How important is CbdMD's Liquidity
CbdMD
financial leverage refers to using borrowed capital as a funding source to finance cbdMD Inc ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. CbdMD financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to CbdMD's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of CbdMD's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the
breakdown between CbdMD's total debt and its cash.
Correlation Between CbdMD and CV Sciences
In general, Stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding CbdMD together with similar or unrelated positions with a negative correlation. For example, you can also add CV Sciences to your portfolio. If CV Sciences is not perfectly correlated to CbdMD it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When CbdMD, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down.
Are you currently holding both CbdMD and CV Sciences in your portfolio? Please note if you are using this as a pair-trade strategy between CbdMD and CV Sciences, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses. Please check
pair correlation details between YCBD and CVSI for more information.
Breaking down CbdMD Further
Total Debt Breakdown
Lets now check CbdMD total debt. Based on the latest financial disclosure, CbdMD Inc has a Total Debt of 4.87
M. This is 99.82% lower than that of the Pharmaceuticals sector and significantly higher than that of the
Health Care industry. The total debt for all United States stocks is 99.91% higher than that of CbdMD. As for Neoleukin Therapeutics we see total debt of 12.07
M, which is much higher than that of the Health Care
| CbdMD | 4.87 Million |
| Sector | 0.0 |
| Neoleukin | 12.07 Million |
As Warren Buffet once said, "Be fearful when others are greedy and greedy when others are fearful." This sentiment may be particularly relevant for investors considering the recent rally of Neoleukin Therapeutics (NLTX) and CbdMD (YCBD). Despite the impressive momentum, it's crucial to consider the
financial health of these companies.
CbdMD, for instance, has a current ratio of 3.47X, indicating a strong ability to cover short-term liabilities. However, the company's operating margin stands at -0.3, suggesting it's currently operating at a loss. Furthermore, the company's risk-adjusted performance is -0.06, indicating a higher level of risk relative to potential returns. Lastly, with a probability of bankruptcy at 93.35%, the company's financial stability is questionable. Therefore, while the recent rally may be enticing, investors should carefully consider these factors before rebalancing their portfolio with these stocks. .
CbdMD is expecting lower volatility in January
Despite the recent Jensen Alpha of -0.59 for CbdMD Inc, which indicates a negative expected return over the market, the company anticipates lower volatility in January. This suggests that the stock's risk relative to the market is expected to decrease, potentially making it a more stable investment in the short term. However, investors should remain cautious due to the negative Jensen Alpha, which implies that the stock has underperformed the market when adjusted for its inherent risk. CbdMD Inc is exhibiting above-average volatility over the selected time horizon. Investors should scrutinize CbdMD Inc independently to ensure that their intended
market timing strategies align with expectations about CbdMD's volatility. CbdMD Inc is a potential penny stock. Although CbdMD may indeed be a good investment instrument, many penny stocks are speculative in nature and are subject to artificial price hype. We urge investors to be vigilant for signals such as email spam, message board hype, claims of breakthroughs, volume upswings, sudden news releases, unreported promotions, or demotions released before SEC filings. We also recommend checking the biographies and work histories of current and past company officers before investing in high volatility instruments, penny stocks, or equities with a microcap classification. While it is possible to profit from the CbdMD instrument if you time your entry and exit perfectly, remember that penny stocks that have been the subject of artificial hype are usually unable to maintain their increased share price for more than a few days.
The price of a promoted high volatility instrument will almost always revert back. The only way to increase shareholder value is through legitimate performance backed by solid fundamentals. In conclusion, the recent dip in CbdMD Inc's stock price appears to be a deceptive indicator of the company's true value. Currently, the company's valuation real value is pegged at
1.24, which is significantly higher than its valuation market value of 0.67. This suggests a potential mispricing in the market. Furthermore, the analyst overall consensus is a 'Strong Buy', with the analyst target price estimated value standing at
3. This figure is notably higher than the current price, implying a potential upside. As such, with the fiscal year ending in September, and the naive expected forecast value being 0.54, the possible upside price of 6.89 presents a promising outlook for CbdMD Inc's stock. This, coupled with the strong buy recommendation from analysts, makes CbdMD Inc an attractive investment opportunity. .
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of cbdMD Inc. Please refer to our
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