Puration Inc. (OTC Pink: PURA) shares are in bull-market mode, holding the triple-digit-percentage gains earned since the start of the year. They come as investors position ahead of several potentially transformative events that could substantially increase PURA valuations in the coming quarters. And despite a retracement earlier this week, PURA's long-term bullish trend is still in tact.
Several initiatives and accomplishments are attracting attention. The first is the company's plans to develop its 70-acre property in Farmersville, Texas. The multi-purpose complex will not only be its operating hub but is also being designed to accelerate multiple projects. In fact, the planned development has already helped attract at least two new partnerships. And while those deals can create value longer-term, investors are also paying attention to PURA's pre-announcement of revenues from its flagship EVERx CBD-infused water. Sales for that product remain strong.
Last month, in fact, PURA guided investors to expect sales of this specialty CBD water to stay above $2 million despite the enormous logistical headwinds created by COVID-19. Those revenues could eclipse a strong 2019 and keep a near-term catalyst in play. Moreover, management comments could shed light on marketplace conditions, with investors hoping to hear that consumer markets are returning toward more normal operating standards. PURA has said they expect sales of EVERx CBD-infused water to accelerate for the remainder of 2021.
That guidance, and news of additional partnerships, inspired investor interest and helped share prices surge by more than 300% since the new year. Other business interests are also attracting attention.
Partnerships And Mutually Beneficial Deals
Those who follow Puration know the company stays active in its mission to create shareholder value. An immediately accretive deal made last December had PURA take a 5% stake in Alkame Holdings, Inc. (OTC Pink: ALKM), in a deal that adds considerable value from an operational perspective and a balance sheet investment.
From the business side, PURA can benefit from better pricing and logistics services from Alkame, PURA's packaging and distribution partner for its EVERx CBD-infused water. Those accretive improvements may already be realized with PURA pre-announcing in February that orders for EVERx exceeded $1.9 million by the end of Q3 in 2020. Not only does that set the stage for a YoY revenue beat next month, but the ALKM alliance could help more dollars fall toward the bottom line.
Another recently announced partnership positions PURA to expedite its entry into the hemp markets. There, PURA and PAO Group, Inc. (OTC Pink: PAOG) intend to collaborate on and build an indoor hemp cultivation operation to develop a proprietary, pharmaceutical-grade hemp cultivar. The joint effort could accelerate both company's entry into the fast-growing specialty hemp market. It also puts PURA close to PAO Group as that company plans to exploit opportunities in a billion-dollar CBD pharmaceutical market through deals they made last year.
Moreover, PURA is already extending its reach into the industrial hemp market by expanding other hemp-focused partnerships to capitalize on existing market opportunities. Pilot products focused on exploiting the full industrial utility of hemp are planned for the back half of the year.
Video Link: https://www.youtube.com/embed/X6kngsIey8A
Consumer CBD-infused Products
Two other deals can impact PURA's growth. First, PURA is expanding its partnership with Alkame Holdings Inc. to produce and test market a CBD-infused liquid sugar, a CBD-infused pet food supplement, and CBD-infused consumer products. With Alkame's logistical support, PURA believes they can exploit substantial opportunities in multiple markets and expedite monetizing new assets and products. Remember, too, PURA maintains its options to license, partner, or sell assets as they get developed. Thus, the need for development capital or time to create a full product launch is not necessary to create revenues. Multiple programs with Alkame also set the stage for numerous potential catalysts through 2021.
Puration also started "strategic negotiations" with North American Cannabis Holdings, Inc.(OTC Pink: USMJ) to accelerate penetration into new market verticals. Although PURA hasn't provided much detail yet, the known benefit is that North American Cannabis Holdings does bring an extra level of expertise in the CBD and cannabis space that could benefit PURA both near and long term. A promising sign from an investor's point of view is that both stocks reacted positively to the news. Investors are likely to get an update on that alliance soon.
2021 Is Set Up For Accelerated Growth
To those invested in the stock before the new year, year-to-date gains have been impressive. And consolidation at current levels is a good indication that the stock can move higher from here. Moreover, the increase in PURA's share price comes from steady accumulation rather than a quick spike, which keeps the move healthy from a technical perspective. Thus, the setup heading into March remains bullish, and a move back toward its February high of $0.07 is certainly a reasonable target.
Moreover, with PURA's willingness to capitalize on shareholder-friendly opportunities, new partnerships could materialize to maximize the use of its planned 70-acre complex. PURA could also get a bounce by capitalizing upon its exclusive license to a novel cannabis extraction process that could expedite penetration into new billion-dollar-market opportunities. The company has already discussed the value of that license to accelerate the development of new brands and products targeting the booming CBD beverages, edibles, and cosmetics markets. Thus, from multiple angles, PURA looks attractive near and long-term despite occasional market turbulence.
Puration's share price is higher, but by no means does it look ready to stop at these levels. Several near-term events could push the stock higher, and each offers a justification for the rally to continue. Thus, despite the triple-digit-percentage gains so far in 2021, PURA has positioned itself to create substantial shareholder value in the coming weeks and months. Therefore, trying to time a trade in this company may be a less profitable strategy than taking a long-term investment approach.
After all, development-stage companies need one crucial thing...time to develop. And if PURA is given that time and can hit its targets, 2021 could be a breakout year.
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