Lotus Ventures LTTSF Stock Forecast & Analysis

Lotus Ventures LTTSF Stock forecast is a premium product producer out of British Columbia.  I wanted to get some information available to all in case of cannabis federal legalization.  They have distribution to a majority of Canada (Less Quebec & Manitoba, and the Territories).  They get more demand than supply can accommodate; my kind of company.  And, they are profitable.  Even more of a “My kind of company”.  The latest numbers have LTTSF stock significantly undervalued.  That, to me has more to do with this being such a smallish company.  As it turns out, stocks are a popularity contest.  Finding these gems is something I always get a kick out of.

For now, here is the latest investor presentation Lotus Ventures Investor Presentation via the company’s website.  Just eyeballing it, considering the company’s profitability, they are earning ~$1M US on about $5M in revenue. That’s a large amount on a percentage basis. With an approximate 141M shares outstanding, that factors out to about $0.35 per share using about 50x forward multiple. It may be that my forward is a bit high. But, these guys are going to see increasing revenues on a rapid basis.

FTTSF stock is currently trading about $0.02 per share. That’s upside potential. So, if you are looking for an inexpensive stock to get into, it may be that this is the one.

Please Note: No video analysis at this time

Lotus Ventures Stock Comparison

I am starting coverage on this and this posting will be an ongoing updated post for Lotus Ventures. You can break down where Lotus Ventures is for comparing the cannabis companies on my Complete List of Top 100 Cannabis companies.

Lotus Ventures Financial Data

Here is a breakdown of Lotus Ventures LTTSF financial data.

Lotus Ventures Gross Profits

Revenues are low. This is not a ginormous company. But, they have solid distribution into all of the major Canadian markets. When I look at a company like this I think that they have been able to establish themselves as a premium player. But, there are limitations with smallish companies. This would necessitate strategic partnerships, as well as the potential merger & acquisition.

Despite low revenues, margins are solid. But, there would need to be more consistency with the numbers and, that is probably going to have to be driven by bigger revenues. Still, the foundation is there and it is possible that Lotus Ventures continues its growth in revenue.

Lotus Ventures Operating Profits

Operating costs run about 40% of revenue which is in the wheelhouse of being a solidly performing company. If Lotus were to build up revenues while maintaining its vigilance in operating costs, I could see this number move lower (Improving on a relative basis).

Again, a smallish company will have challenges on its own. I see future potential strategic partnerships as a key to increasing revenues and optimizing its position. When I think of Lotus Ventures, I wonder about companies such as Avant Brands, Indiva, and Auxly, all of whom are in Canada, smallish as well, doing premium-focused cannabis. Put a strategic partnership together with these companies, and costs are maintained while revenues go higher.

I think we will see a lot of moves this year in M&A and partnerships.

Lotus Ventures EBTIDA & Net Profits

Again, Lotus Ventures is profitable with both EBTIDA & Net Earnings, the ultimate goal. This is what makes this such a great thing for a potential investment in that Lotus Ventures set out to make a premium-focused product, succeeded, and hit this level so early in the game. Even some of the biggest players in Canada, with access to far more capital, are not profitable yet.

Lotus Ventures Cash On Hand

One of the benefits of being profitable is that you do not need to fret over your cash position. Lotus Ventures has added cash to its coffers in the latest quarter. Their debt ratio to cash is also very competitive whereas the median of many of the other cannabis companies I look at is much lower.

Lotus Ventures Total Equity

Equity is the engine that builds the future. LTTSF Stock’s total market capitalization is about $10M so. But, Lotus Ventures’ total equity is about $12.5M. Given this, there is upside in the stock since the market is misaligned with basic fundamental metrics.

Is Lotus Ventures LTTSF Stock A Good Investment?

There are a lot of things I like about Lotus Ventures. First, it’s profitable. Period. Then, they are focusing on the right thing that works: premium cannabis. Other companies thought they’d be able to add production and easily sell extra product on a wholesale basis. But, too many companies thought that and the market price crashed. Premium, to me, is key.

Also, Lotus Ventures is venturing into distribution with dispensaries. This is key to success. But, for such a small company, I’d be more inclined to think that strategically partnering up with an already-existing dispensary system would be a better strategy. Capital needs for adding new dispensaries are high. But, Lotus Ventures is cash flow positive. If they took their earnings and built up a substantial dispensary system, without dilution of shares raising capital, this could prove to be a solid opportunity.

In the long run, the key factor is that Lotus Ventures is cash flow positive with being net earnings positive. That is a driving aspect that I think is key.

Lotus Ventures LTTSF Stock Financial Data

Lotus Ventures LTTSF Stock Financial Data