Overview: Sentiment and Stocks
Halo Labs (HALO) is a NEO Exchange listed cannabis extraction company that develops and manufactures cannabis oils and
concentrates. The company is currently operating in California and Oregon, as well as Nevada. For Q1, the company reported
a net loss of US$3,037,601 (-US$0.02 EPS) versus -US$1,818,993 (-US$07 EPS) in Q1 2018. However, sales soared to
US$8,718,503 from US$2,168,976. Gross margin was 28% in Q1 before unrealized loss on growth of biological assets. The
loss was driven in part by higher a higher wage costs and professional fees as operations ramped up.
California was the largest market for the company in the quarter with its Coastal Harvest operations delivering US$5,324,369
in sales. That was followed by US$2,879,769 from its Oregon operations and US$514,365 from Nevada. While the company
has been finding the Oregon market challenging lately, it was able to raise prices in Q1 thanks it seems to an improved
product mix. Going forward, Halo is counting on California to be a key growth driver. In February, Halo launched DabTabs
Dablets in both Oregon and Nevada followed by California in late March. DabTabs are proprietary ceramic discs that store a
premeasured single dose of either cannabis concentrate or oil for a broad range of dabbing devices. On May 6th, Halo
launched DabTabs Go, a light portable vaporizer for DabTabs Dablets. For 2019, according to a company presentation, it
estimates firm-wide revenue in excess of US$45 million. Whether Halo can turn its red ink into black will depend not only on
it reaching sales objectives, but also controlling costs. One area the company can probably cut back is investor relations
where it spent US$478,247 in Q1. Meanwhile, CEO Kiran Sidhu appears to be betting the market is under-estimating Halo's
growth prospects as he was picking up shares in the public market Thursday.
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Halo Labs Inc. (HALO) has a high amount of executive buying compared to its small-cap peers over the past three months.
Kiranjit Singh Sidhu (N), CEO and a Director of the company, acquired 165,000 Common Shares on a direct ownership basis
at a price of $0.682 through the public market on May 16th, 2019. This represents a $112,448 investment into the company's
shares and an account share holdings change of 4.6%.
Halo Labs has above median ownership (direct & indirect holdings) by Officers and Directors compared to other small-cap
stocks in the Healthcare sector according to SEDI filings as of May 16th, 2019.
The stock currently holds a mostly sunny INK Edge outlook on the equally weighted V.I.P. criteria of valuations, insider
commitment and price momentum which places it in the top 30% of all stocks ranked. INK outlook categories are designed to
identify groups of stocks that have the potential to out- or under-perform the market. However, any individual stock could
surprise on the up or downside. As such, outlook categories are not meant to be stock-specific recommendations. For
background on our INK Edge outlook, please watch our short video or visit our FAQ #5 at INKResearch.com.
Disclosure: One or more INK employee owns shares of HALO