Kanabo Share Price Forecast August 2021 – Time to Buy KNB?
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Shares of the United Kingdom-based Kanabo (LSE: KNB) are finally on the rise after months of lacklustre performance. The shares are up by nearly 80% over the last couple of weeks, with many investors wondering if this is the right time to pick up KNB shares.
Kanabo – Technical Analysis
According to Kanabo’s financial statement, the company has a market cap of £92.231 million, with total assets worth £792K. The company’s assets grew from £710K in 2019 to reach current levels with a debt to assets percentage of 6.82%. KNB shares closed on August 9th at £20.8 with a downtrend of -16.80%.
Moving averages such as Exponential Moving Average (30)(19.1), Simple Moving Average (30)(18.0), Exponential Moving Average (50)(19.3) and Simple Moving Average (50)(18.7) are pointing towards a buy action. On the other hand, oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(84.3), Williams Percent Range (14)(−42.1), Bull Bear Power(5.4) and Ultimate Oscillator (7, 14, 28)(45.5) are pointing towards a neutral action.
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Recent Developments
Kanabo is a developer and manufacturer of cannabidiol-based products (like oils) for the health & wellness sector as well as its proprietary inhalation device. The VapePod. The company announced shipments of medical cannabis cartridges for the first time in the United Kingdom, produced with the help of its partner, PharmaCann Polska. Additionally, it has improved patient access to these products via a partnership with Astral Health.
With a strong customer base already established Kanabo’s management team wants to complete several strategic acquisitions as soon as possible. It put forward plans to acquire Materia, a licensed medical cannabis wholesaler with Good Manufacturing Practice (GMP) certification. If the company were to make the acquisition, it will gain a new sales channel via Materia’s already established network of pharmacies. Some of the other partnerships of the company include several supply deals including one signed with Hellenic Dynamics S.A, a northern Greece based medical cannabis cultivation. It also signed a production agreement with Pure Origin.
Kanabo comes with its share of risks. To fund the proposed Materia deal, Kanabo wants to sell additional shares since debt financing is unsuitable in this case. This can lead to equity dilution, which in turn will drag KNB share prices down. Also, integrating a new company often leads to complications that can cause harm to a company’s value rather than add to it. In this case, Kanabo’s limited experience and history make the company at risk of losing value as a result of the integration.
Should You Buy KNB Shares?
Kanabo has been making progress to turn itself into a viable business since its Initial Public Offering last February. The string of partnerships that the company has engaged in has started bearing fruit. Kanabo has also overcome initial challenges by getting all of its products certified. This is good news for its share price.
However, there is still doubt among analysts as to whether Kanabo is a business worth owning. It seems like it’s in a solid position on an operational level but there is still doubt surrounding its financials. With a lack of information about its recent price and sales volume, KNB shares remain difficult to judge for the time being. The immature nature of the cannabis market in the short term can be susceptible to oncoming regulations, which could be the cause for volatility in KNB shares. Considering all of the above factors, investors would be clever to add these shares to their watchlist for the time being and wait for future news regarding the company’s financials.
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