The major stock market indexes experienced a sell-off earlier this year on concerns over multi-decade high inflation, Russia’s invasion of Ukraine, soaring crude oil and natural gas prices, and the possibility of aggressive interest rate increases.
However, the market has staged a decent recovery over the last two weeks, with investors pricing-in most of the negative factors. Dialogue between Ukraine and Russia appears to be progressing after an initial breakdown in talks. Recently, Russia announced that it would reduce its military assault on Kyiv and Chernihiv. Any positive development on the war front might act as a trigger for the markets to rebound. In addition, as the first-quarter earnings season draws close and corporates are expected to announce improved results, investors might gain further confidence.
Given this backdrop, we think it could be wise to add penny stocks MariMed Inc. (MRMD), Exela Technologies, Inc. (XELA), Inuvo, Inc. (INUV), and Greenlane Holdings, Inc. (GNLN) to one’s watchlist. Wall Street analysts expect these stocks to rally more than 155% in price in the near term.
MariMed Inc. (MRMD)
MRMD is a legal cannabis company that provides solutions for the design, development, operation, management, and optimization of the cultivation, production, and dispensing of medicinal and recreational cannabis. The Norwood, Mass., company’s cannabis genetics produce flowers is focused on Nature’s Heritage, cannabis-infused products under the brand name Kalm Fusion, and the Betty’s Eddies brand for all-natural fruit chews.
On Jan. 5, 2022, MRMD announced that it had agreed to acquire a vertically integrated cannabis business, Kind Therapeutics U.S.A., LLC, which is based in Maryland. MRMD’s CEO, Bob Fireman, said, “This acquisition will deliver another transformational year for MariMed in 2022, building on two consecutive years of more than 100% cannabis revenue and adjusted EBITDA growth.”
MRMD’s revenue for its fiscal year ended Dec. 31, 2021, increased 139% year-over-year to $121.50 million. The company’s net income increased 213.8% year-over-year to $7.62 million. Also, its adjusted EBITDA increased 144% year-over-year to $43.13 million.
Analysts expect MRMD’s EPS for its fiscal year 2022 to increase 150% year-over-year to $0.05. Its revenue for its fiscal year 2023 is expected to increase 20.6% year-over-year to $173.43 million. Over the past nine months, the stock has declined 22.6% in price to close the last trading session at $0.73. However, Wall Street analysts expect the stock to hit $1.88 in the near term, indicating a potential 157.5% upside.
Exela Technologies, Inc. (XELA)
XELA is a provider of transaction processing solutions, enterprise information management, document management, and digital business process services. The Irving, Tex., company operates through the Information & Transaction Processing Solutions (ITPS), Healthcare Solutions (HS), and Legal & Loss Prevention Services (LLPS) segments.
On March 25, 2022, XELA announced a strategic investment in the leading patient access and price transparency platform, UBERDOC, Inc. It connects patients to top doctors for in-person and telemedicine appointments. XELA’s global head of business strategy, Matt Brown, said, “The time has come for patient-first healthcare innovation, and we are excited to be part of the solution.”
For its fiscal fourth quarter, ended Dec. 31, 2021, XELA’s total revenue increased 5.4% sequentially to $294.30 million. The company’s Healthcare Solutions’ revenue increased 9.5% year-over-year to $56.50 million, and its adjusted EBITDA increased 6.4% year-over-year to $39.50 million.
For the quarter ending March 31, 2022, XELA’s EPS is expected to increase 86.7% year-over-year to $0.08. Its revenue for its fiscal year 2023 is expected to increase 5.8% year-over-year to $1.25 billion. Over the past nine months, the stock has declined 82.5% in price to close the last trading session at $0.42. However, Wall Street analysts expect the stock to hit $1.28 in the near term, indicating a potential 207.5% upside.
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Inuvo, Inc. (INUV)
INUV in Little Rock, Ark., is a technology company that develops and sells information technology solutions for marketing. The company’s platform allows advertisers and publishers to buy and sell advertising space in real-time. Inuvo offers products and services, including ValidClick and IntentKey.
On March 15, 2022, INUV announced its partnership with Halo Collar to promote the go-anywhere wireless dog fence. INUV’s CEO Rich Howe said, “The IntentKey AI-driven media solution has proven itself a unique and valuable asset to CEO/CMO advertising decision making across industries. Halo’s increased engagement with prospective clients and their attentiveness to the ways the insights coming from the IntentKey can help drive creative, product, and partnership strategies is a testament to their data and technology-driven approach to business.”
INUV’s net revenue increased 52.9% year-over-year to $19.73 million for the fourth quarter, ended Dec. 31, 2021. The company’s gross profit increased 4.7% year-over-year to $11.27 million. Also, its adjusted EBITDA increased 34.3% year-over-year to $466K.
Analysts expect INUV’s EPS and revenue for the quarter ending June 30, 2022, to increase 50% and 43%, respectively, year-over-year to $0.01 and $17.35 million. Over the past year, the stock has declined 52% to close the last trading session at $0.49. However, Wall Street analysts expect the stock to hit $1.63 in price in the near term, indicating a potential 232.6% upside.
Greenlane Holdings, Inc. (GNLN)
GNLN in Boca Raton, Fla., sells cannabis accessories and liquid nicotine products worldwide. It operates as a third-party brand accelerator and a distribution platform for consumption devices and lifestyle brands serving the global cannabis, hemp-derived cannabidiol, and liquid nicotine markets. It is in partnership with brands that include PAX Labs, Grenco Science, Storz & Bickel, Firefly, DaVinci, Santa Cruz Shredder, and Cookies.
On Nov. 30, 2021, GNLN announced the completion of its acquisition of DaVinci, a developer and manufacturer of premium portable vaporizers. The acquisition is expected to be accretive to GNLN’s revenue and earnings. Nick Kovacevich, GNLN CEO, said: “We are thrilled to complete yet another acquisition of a high-margin, fast-growing, and innovative ancillary brand that significantly enhances our proprietary brands' portfolio.”
For its fiscal fourth quarter, ended Dec. 31, 2021, GNLN’s net sales increased 54.4% year-over-year to $56.02 million. Its Greenlane Brands sales increased 16.9% year-over-year to $7.40 million. The company’s gross profit increased 102.7% year-over-year to $12.47 million, and its gross margin came in at 22.3%, compared to 17% in the year-ago period.
For the quarter ending March 31, 2022, GNLN’s EPS is expected to increase 83.3% year-over-year to $0.06. Its revenue for the quarter ending June 30, 2022, is expected to increase 76.7% year-over-year to $61.34 million. Over the past year, the stock has declined 89.4% in price to close the last trading session at $0.56. However, Wall Street analysts expect the stock to hit $2.67 in the near term, indicating a potential 376.8% upside.
What To Do Next?
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MRMD shares were unchanged in premarket trading Friday. Year-to-date, MRMD has declined -15.61%, versus a -4.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
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