OrganiGram stock is one of the few cannabis stocks which has been consistently trading above the 50-Day Moving Average Price. OrganiGram Holdings (TSXV:OGI) (OTCQX:OGRMF) stock has been doing very well since the beginning of this year with a gain of over 80%.
The 50-day moving average is a popular technical indicator which traders use to analyze price trends. It is just a security's average closing price over the last 50 trading sessions.
In fact, OrganiGram stock has not dropped below the 50-Day MA since early February, 2019. While other popular stocks like Aurora Cannabis (TSX:ACB) (NYSE:ACB), Canopy Growth Corp (TSX:WEED) (NYSE:CGC), and Tilray Inc (NASDAQ:TLRY) are trading below their respective 50-Day MA.
The stock has outperformed the boarder cannabis market with a gain of over 17% since April 26, while ETFMG Alternative Harvest ETF (MJ), which tracks the broader cannabis stocks, is down 4% during the same period.
Let's analyze the company's recent developments.
On April 26, cannabis grower OrganiGram Holdings announced plans to move to the NASDAQ exchange indicating that they have already filed paperwork to list their stock on the exchange. On the same day, the stock went up about 12%.
OrganiGram Stock Growth | Expanding Operations
The Atlantic based cannabis grower has a grow site in Moncton, New Brunswick and they are already working on a fourth phase expansion in 2019 that once complete will ensure the company has close to 490,00 square feet of cultivation space.
Although this doesn’t look a large space the company is trying to optimize the usage of the space by stacking the grow farm to be three tiers high. Through this strategy, the company expects better yields per square foot of about 230 grams which is almost double the industry average of around 100 g per square foot. On average, OrganiGram annually produces 113,000 kg which is sufficient to guarantee a top ten spot among Canadian growers.
There is more for OrganiGram stock investors. Besides production efficiencies, the company can also take advantage of its geographical positioning. Although the eastern provinces are not as populated with consumers as in the Atlantic Provinces, they consume more marijuana than other regions. This puts OrganiGram at the top of the leader-board for Canada’s demand.
OrganiGram has also indicated they will renovate 56,000 square feet of space at Moncton campus to add their extraction capacity. The company wants to expand their product portfolio to boost their margins.
OrganiGram Financial Results
OrganiGram announced its Q2 2019 results which showed that despite the company swinging a loss it nonetheless made significant progress in derivative development, and production expansion, and improvements of the balance sheets. The company made progress in Q2 posting revenue growth of over 1,000% with net revenue including excise taxes almost doubling from Q1 when they generated $20.02 million. The bulk of sales in Q2 were from recreational use marijuana following its legalization last year.
OrganiGram managed to generate a positive EBITDA for the third consecutive quarter posting around $10 million which is 49% of its net revenue.
OrganiGram stock is up about 1% on the NYSE and trading above the 50-Day MA price of $9.03. So keep an eye on the stock because if it slips below $9 there could be some sell-off. In other words, $9 could be a solid technical support for the OGRMF stock.
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