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Tuesday, November 24, 2020

Breakout Spotlight on Sunset Island Group Inc (OTCMKTS:SIGO)

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Sunset Island Group Inc (OTCMKTS:SIGO) blasted off on Friday, posting a massive price per share gains on a huge increase in trading volume. The catalyst was an announcement about a reduction in authorized shares. However, this was a follow-on move continuing momentum initially spurred by the company’s announcement a week earlier about its being granted a cultivation license. Nonetheless, the authorized share reduction shouldn’t be overlooked. Legitimacy is the ultimate story among those vying for buzz in the OTC cannabis patch. And a veneer of anti-dilutive protocol is a strong path to that story.

Specifically, the company just announced that it will immediately move to adjust the authorized share count to twenty million (20,000,000). CEO Valerie Baugher stated, “Over the past few months, I’ve sensed that with each call and email we receive from shareholders, they’re always looking for confirmation or legitimacy as it pertains to our business model and what we have planned as a company. Nothing lends more credibility for shareholders of any company in my opinion than adjusting your share structure in a way that reflects your rhetoric.”

Sunset Island Group Inc (OTCMKTS:SIGO) trumpets itself as a company whose principal line of business is the cultivation of medical cannabis.

SIGO has leased greenhouse space in Northern California that has been approved for cannabis cultivation. The greenhouse is 12,000 square feet; however, SIGO has begun filing its permits to expand to 22,000 square feet.

Once the State of California has finalized the licensing process and requirements for licensed manufacturing facilities, SIGO will begin consulting and advising clients that operate in the medical marijuana business by providing clients a licensed manufacturing facility to produce products such as oils and edibles.

As far as outlook, management recently noted that “the approval of recreational marijuana should prove to be a huge benefit to us from a revenue standpoint. We’re working on updated projections for 2018 and beyond. Currently, our entire team is in the process of cultivating two more 2,000 square foot bays over the next few days and with recent adjustments and modifications that we’ve made, we’ve been able to move from 480 plants per bay to approximately 1,000. Further retrofits should eventually allow us to grow 1,600 plants per bay with each harvest. We look forward to sharing more information with our shareholders in the coming weeks and will update you all once we have received the approved manufacturing license and the distribution permits.”

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As noted above, SIGO is an evolving story right now. The company was recently awarded a cultivation license and has responded by taking steps to send investors signals about a new path ahead that seeks legitimacy in place of dilution. This is normally the type of thing we like to see, and we would suggest keeping this stock on the radar.

Ms. Baugher went on to say, “At the same time, we will adjust our fiscal year end to 3/31 of each year. This reduction in the authorized share count is a commitment of sorts to shareholders that we are building out a strong cannabis grow operation and while doing so, we have their best interests in mind.”

Ms. Baugher finished up with, “We hope to have these adjustments completed by mid-February at the latest and will update OTCMarkets.com accordingly. As always, we thank each of you for your ongoing support.”

Traders will note nearly 270% piled on for shareholders of the company during the trailing month. This is emblematic of the stock. SIGO has evidenced sudden upward volatility on many prior occasions. Moreover, the company has benefitted from a jump in recent trading volume to the tune of just shy of 490% over the long run average.

Currently trading at a market capitalization of $14.8M, SIGO has virtually no cash on the books, which stands against virtually no total current liabilities ($16K as of its latest financial filing). The company is pre-revenue at this point. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $SIGO 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 $SIGO, either long or short, and we have not been compensated for this article.

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