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Monday, November 23, 2020

Breakout Spotlight on Sugarmade Inc (OTCMKTS:SGMD)

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Sugarmade Inc (OTCMKTS:SGMD) shares have been powering higher in recent days in a major breakout that suggests traders need to keep this one on the radar. The company recently put out a press release discussing the steps being taken to modify its corporate operations as it reportedly “becomes one of the world’s largest publicly traded suppliers to the growing cannabis industry.” Shares have taken off as a result, rising as much as 125% in just the past 4 trading sessions.

Mr. Jimmy Chan, CEO of Sugarmade, commented, “We are taking decisive action to modify our operations in order to prepare for the huge increase in business we are expecting. Growing a business infrastructure capable of expanding by more than 500% during 2018 is certainly a challenge, but we have already begun the process. We will be providing detailed revenue guidance for the full year 2018 over the next few weeks. All of us at Sugarmade are looking forward to growing with the industry over the coming years. Below are the steps we are implementing in order to prepare to meet this growing challenge.”

Sugarmade Inc (OTCMKTS:SGMD) trumpets itself as a product and brand marketing company investing in products and brands with disruptive potential.

Sugarmade’s brands include: 1) CarryOutSupplies.com, which supplies generic and custom printed items to the quick service restaurant industry, 2) CannaShroud and DabBox, which are unique cannabis packaging products and 3) Sugarmade Paper a tree-free office and copy paper made from sugarcane waste.

The Company will soon be launching Sriracha Stix, a revolutionary culinary seasoning product under official license from Irwindale, California-based Huy Fong Foods, Inc., the maker of Sriracha Hot Chili Sauce. The Company has also recently acquired international paper contracts from Bao Coc International Paper and Plastics Limited, located in Vietnam.

SGMD is currently in development of several other innovative product lines, which are planned for mid-2017 introduction.

According to company materials, “Sugarmade, Inc. is a product and brand marketing company investing in products and brands with disruptive potential. Sugarmade’s brands include CarryOutSupplies.com, Sugarmade Tree Free Paper, FreeHand ThumbTray and CannaShroud™, the world’s first Cannabis specific shipping systems. During early 2017, the Company will be launching Sriracha Stix, a revolutionary culinary seasoning product under official license from Irwindale, California-based Huy Fong Foods, Inc., the maker of Sriracha Hot Chili Sauce.”

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According to the company’s most recent release, “Sugarmade recently announced to its investors, and to the growing cannabis marketplace, the creation of the largest emerging publicly traded cannabis and hydroponics supply company. Sugarmade has completed a master market agreement with industry leader BizRight Hydroponics, Inc., a leading marketer and manufacturer of cannabis and hydroponic growth supplies, which offers a range of hydroponics-related products including: HPS grow lights, electronic ballasts, HPS bulbs, nutrient mixes, environmental control products, pH measurement and calibration solutions and other cannabis-related grow and storage products. BizRight operates the ZenHydro.com website and other e-commerce properties and sells various products to distributors and retailers. BizRight is expected to produce in excess of $30 million in revenues during 2017, with substantial growth expected for 2018.”

We’ve witnessed approaching 240% added to share values of the name over the past month of action. The situation may be worth watching. SGMD has a track record that includes a number of dramatic bounces. In addition, the listing has benefitted from a jump in recent trading volume to the tune of just under 120% beyond what we have been seeing over the larger time frame.

Earning a current market cap value of $70.3M, SGMD has virtually no cash on the books, which is balanced by about $2M in total current liabilities. One should also note that debt has been growing over recent quarters. SGMD is pulling in trailing 12-month revenues of $4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 9.3%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $SGMD stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $SGMD, either long or short, and we have not been compensated for this article.

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