Tell me you saw the latest NEWS from Upper Street Marketing (OTC:UPPR). Whether you’re leery of investing in volatile “green revolution” stocks or eager for a more robust player to emerge, this headline should get you to rethink the way you approach this HOT sector.
Start with the opportunity. UPPR says this deal could ultimately take it on the path to extracting essential oil from 3 million pounds of biomass in the next 24 months. That’s theoretically a $300 MILLION opportunity between now and early 2021.
Of course that’s big. UPPR isn’t even a $40 million stock as I write this, so bringing in 7.5X market cap in revenue can move the needle so far around heads will spin. What does a big player like Aphria rate on Wall Street these days, 3X 2020 revenue? How about Canopy? That one’s trading at 24X projected revenue right now.
So bringing $300 million to a $40 million stock can truly change the game. It’s not even about margins . . . those giant companies I just mentioned aren’t exactly profit machines and won’t be generating a lot of cash for years to come. These comps are just about the revenue.
And if you’ve been following our coverage, you know UPPR isn’t about the nerve-wracking state-by-state side of the business at all. Their products were written into federal law thanks to last year’s Farm Bill. You don’t need to fret about jurisdiction or shifting winds in enforcement. As long as they have the right permits, the lights are flashing green.
We’re not interested in the product. All we really think about here is the cash flow, the opportunity and what it can do to a little stock like this.