MJNA Stock Underperforms, But May Brings in Ray of Light for Investors

MJNA stock

Considering MJNA stock has performed poorly for much of 2019, it may come as a surprise that shares of Medical Marijuana Inc. (OTCPK:MJNA) were the industry’s top performer in May. Who’d have thought that?

Shares gained 26% across the month because the company released its Q1 operating results on May 22nd. May was a tough month for the cannabis market as a whole; the entire index wiped roughly 17% off the board. To stand out in a tough market is no easy feat. MJNA stock is currently selling for $0.06 USD.

MJNA Stock Q1 Results

There is still plenty of risk tied to these shares. But keeping that in mind, here are some of the key takeaways from its Q1 report:

  • $20.2 million in revenue for the quarter—a 92% increase from the same period the previous year;
  • Gross margin increased 78% from the prior-year quarter;
  • Medical Marijuana Inc recorded operating results that showed a $1.5 million profit. Further, “inclusive of one-time benefits from its investment portfolio,” according to The Motley Fool, Medical Marijuana recorded a $9.5 million quarterly profit.

Risky Business

Though these results give investors a lot of food for thought, there remains, as stated, risks with MJNA stock. So what are they?

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The company has roughly 3.6 billion shares outstanding. If you were to divide this quarterly profit correctly, then investors would only earn about a quarter of a penny per share.

Further, the company ended the quarter with $45.4 million in goodwill along with $33.8 million in investments. Most of the latter are tied to its 38% stake in cannabinoid-focused biotechnology company Axim Biotechnologies (OTCQB:AXIM).

Initially, MJNA’s assets were inflated substantially when Axim’s stock soared from $0.25 to over $20 per share. However, Axim peaked in 2017 and has since given back nearly all of its gains. Currently, its shares trade for $0.95 at present. This pushed Medical Marijuana’s annual loss to $202.6 million, and that is not pretty.

Ahead

The risks are there, but investors may remain intrigued by what lies ahead for MJNA stock. As a producer and seller of hemp-oil and hemp-derived cannabidiol (CBD), the company is a prime beneficiary of the farm bill now signed into law in the US. Because of the heightened demand for CBD products, this industry is only beginning to boom, and the likelihood is that Medical Marijuana’s products should be selling like hot cakes.

What are your thoughts on MJNA stock? Are you surprised that it was a leading stock in May?

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Featured Image: DepositPhotos © iqoncept