Sometimes a company, for whatever reason, just can't get it together.
Maybe it has a bad CEO, or a board that doesn't "get" accountability. Maybe it's doing business in a bad market, or it got beaten in the innovation stakes. Perhaps it's bad luck.
Whatever the reason, the pattern is familiar: The stock price languishes in the basement, headlines run negative, executives get replaced like lightbulbs, and lawsuits fly freely.
That's a pity, because some of these companies boast the infrastructure and expertise that, under the right leadership, could transform them into a gold mine - a true "turnaround."
Some household names that today are worth trillions of dollars combined are onetime turnaround stories: Apple Inc. (NASDAQ: AAPL), FedEx Corp. (NYSE: FDX), Amazon.com Inc. (NASDAQ: AMZN), Marvel Comics, Starbucks Corp. (NASDAQ: SBUX), Netflix Inc. (NASDAQ: NFLX) - all of them were at one point on "death watch."
Reversing such a company's failing fortunes can require deep shakeups, drastic moves, and immense changes...
Fortunately, the twilight end of cannabis prohibition here in the United States provides a business climate where that kind of creative destruction can happen more easily than it might otherwise.
Promising changes are underway at a few companies listed in our proprietary database right now, but one in particular deserves your hard-earned capital - because it has the real potential to return that capital in multiples.
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Here's How to Spot a Real Success Story
First, let me be forthright about what represents a true turnaround.
A dodgy, aging micro cap whose business constantly changes how it operates to capitalize on every new investment fad is not the real deal. The "dot-com" wannabes that moved on to hawking subprime mortgages, then owned a couple of uranium mines for a while, before being all about "the blockchain," and that now, for the moment, grow or sell cannabis are probably not worth your money.
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Indeed, plenty of those are outright stock scams.
That said, some of the companies that undergo operational changes actually run honest operations - just not successful ones. But a pivot to cannabis finally puts trustworthy, competent executives in the right place at the right time.
A company I'm watching right now, Laval, Quebec--based Neptune Wellness Solutions Inc. (NASDAQ: NEPT) fits that description perfectly.
It could finally be in that perfect spot for a transition.
When my team and I first looked at Neptune late last year, we saw a company that had been in business for 20 years and yet still couldn't manage to swing much in the way of profits.
Neptune has sold "nutraceutical" oils sourced from marine animals, like cod and krill. In fact, its core competency was extraction, but mostly as a third-party supplier with little in the way of its own branded products.
Over the last five years, Neptune has managed to survive off the 100 million Canadian dollars (US$76.6 million) it raised in equity offerings and proceeds from the sale of intellectual property and inventory. Profitable years have been few and far between.
But in 2018, the company began applying its considerable extraction expertise and resources into producing cannabinoid extracts - a move that built upon the company's 20 years of oil extraction and nutraceutical product development experience.
Progress was halting at first, but now, momentum is building. And by "building," I mean Neptune's stock price has skyrocketed by as much as 99% since Dec. 31, 2018.
I think those nice gains are just a taste of what's coming. After a major leadership change and a series of deals with big players in the cannabis industry, the stock price could be sent into the stratosphere.
This Company Is Starting to Fill Up the "W" Column
Neptune's board has just installed Michael Cammarata at the helm. He's replacing Jim Hamilton, the CEO of the past four years.
Michael has been an innovator in the wellness industry for years. He co-founded Schmidt's Naturals, which was ultimately sold to Unilever NV (NYSE: UN) and led the brand's exponential growth. Cammarata will be spearheading several acquisitions and developments already underway from Hamilton's tenure.
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Neptune recently received amendments from Health Canada to expand its production capacity to 200,000 kg, which completes phase 2 of its ethanol-based extraction installation.
It is also expanding production into the United States through a definitive agreement to acquire the assets of Conover, North Carolina--based hemp processor Sugarleaf Labs LLC for $18 million. That deal should close on or before July 31.
Neptune has a growing and enviable stable of customers, now, too.
It currently holds a multi-year agreement with Canopy Growth Corp. (NYSE: CGC) to supplement Canopy's extraction, refinement, and extract product formulation capacity. Neptune also recently also won contracts with Tilray Inc. (NASDAQ: TLRY) and The Green Organic Dutchman Holdings Ltd. (OTCMKTS: TGODF). The total of all agreements signed to date amount to over 500,000 kilograms of cannabis product, much of which will be turned into CBD extracts to meet skyrocketing demand.
A true corporate turnaround isn't easy; they're not necessarily commonplace, despite the turnaround of so many current household names. But when I look at what's happening at Neptune, the leadership changes and the business realignment with the explosive cannabis sector, I see the potential for this company to be one of the great turnaround plays of our time.
America's Green Gold Rush Is Just Getting Started - Claim Your Stake Now
At this very moment, big investment firms and members of the Fortune 500 are building enormous war chests.
They're preparing to push billions upon billions of dollars into the cannabis market - and they could strike at any moment. So right here - right now - you have a once-in-a-lifetime opportunity to beat them to the punch and stake your claim.
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About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.