Friday, December 12, 2014

Undervalued Stocks Monday 12/15/14 $ECIG $MCIG $ANAS $ERBB

The biggest undervalued stocks this week in the OTC penny market space consist of marijuana and e-cigarette names.

$ECIG is the blog's play of the day for Monday, and with a market cap of around $10 million based on my estimations, it is absurdly valued at only .25x full year earnings.  This leads me to believe that a company may look to buy it out, and a larger company can buy it even for $100 million and pay not even one years worth of what sales should probably be in a few years.

A larger company could manage $ECIG easier, and shareholders are now averaging down which would make a $1 per share bid hard to pass up for ones buying in now.  Additionally, the price tag of other major e-cig mergers have been in the $150 millon dollar range, making this one totally feasible if a large tobacco company were interested.  While distribution channels would not be an issue here, perhaps an additional known brand name would be.

MCIG ANAS and ERBB are three other top picks and I view these as being extremely undervalued in the pot stock market.  ERBB and MCIG are experiencing record revenue with the Zazz Machine and mCigs, respectively.  The Vitacig spin-off for Mcig will provide yet another catalyst and I feel the market is not fully valuing these companies currently.

ANAS is my best pick for a long shot, as it has been hammered since reaching about a penny per share earlier this year.  Its Focamine and other products are on Amazon and this is the company that was rumored and forecasted producing the coveted "5 Hour High."

Disclosure, I am long MCIG, ECIG, ANAS, and ERBB.

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