Here’s Why PAO Group Inc. Stock
Looks Tremendously Undervalued; Dividend And CBD-Based
Nutraceuticals Partnerships Are Two Reasons
March 18, 2021 -- InvestorsHub NewsWire -- via MarketWatch --
Investors selling PAO Group, Inc. (USOTC: PAOG)
stock at current levels may be missing a big part of its story.
But, as they say, there's a buyer for every seller, so the
opportunity is not going entirely unnoticed. In-play are at least
two recently announced deals targeting a red-hot CBD sector at the
right time.
The first deal is with Puration, Inc. (USOTC: PURA) to
accelerate a collaborative effort to develop various
cannabis-centric applications through a partnership that started
when PAOG acquired PURA's cannabis cultivation business in 2020.
Importantly, although taken longer than expected, a dividend
distribution of PAOG stock is included in the transaction, and the
company said they are awaiting FINRA approval to complete the
transaction. While the transaction may be more bullish to PURA
shareholders, PAO Group still delivers expertise to the deal. Thus,
it's a long-term win-win.
The two are already advancing a significant project to develop
PURA's Farmersville Brands project. With PAOG's contribution,
Puration is building a 70-acre facility designed to provide
interactive, demonstrable education on hemp's potential to provide
environmentally sustainable alternatives to over $1 trillion in
existing industrial products. The planned facility is an
instrumental part of a cooperative strategy to capitalize on a
hemp-derived product's market expected $15 billion market size by
2027. Over the past several years, hemp has become far more
understood in its commercial applications. Moreover, it's
considered the ideal and optimum replacement candidate for products
and services currently damaging the environment due to their
design.
PAOG's stake is to assist in the construction and operation of
indoor, pharmaceutical grade, hemp growing facilities and maintain
a substantial role in the cannabis extraction lab's operations.
Notably, the two will be joined by North American Cannabis
Holdings, Inc. (USOTC: USMJ) and Alkame Holdings, Inc. (USOTC:
ALKM) to enhance PURA's Farmersville Hemp Brand strategy.
Thus, seller's remorse could be in the cards. Moreover, updates
on several projects could fuel a rally back toward highs set in
February, especially with investors embracing risk back into
portfolios after a sector-wide decline last month.
Record Revenues And A Transformative Acquisition
Moreover, PAOG comes with an advantage over most of its nano-cap
peers. They are generating revenues. Better still, the expected
$300,000 in sales from its cannabis cultivation subsidiary puts
PAOG in an enviable position to increase its exposure in other
areas of the booming CBD-based therapeutics and nutraceutical
sector. In fact, PAOG is already capitalizing on emerging
opportunities in each market segment through recent partnerships
and acquisitions.
A big boost to its product portfolio came in 2020 when PAOG
acquired RespRx. That asset has earned professional praise and puts
PAOG in an enviable position to develop CBD-based therapeutics
targeting the treatment of patients with symptoms associated with
Chronic Obstructive Pulmonary Disorder (COPD).
The debilitating disease is a chronic one and affects more than
60 million people and has an addressable treatment market that
surpassed $10 billion in 2016. It's now the third leading cause of
death worldwide, and the market is expected to reach $14.1 billion
by 2025. CBD-based treatment could be an alternative therapy that
is effective and safer than current pharmaceutical alternatives.
That could bode well for PAOG.
Investors embraced the acquisition of RespRx from Kali-Extracts
as a potentially transformative deal. And a year later, PAOG is
making strides to monetize RespRx through arrangements that could
deliver substantial returns in the next few quarters. Remember,
like other therapeutics, time to develop is needed, and the process
can be daunting. However, as seen in Jazz Pharmaceuticals'
(NASDAQ: JAZZ)
purchase of GW Pharma (NASDAQ: GWPH)
for $7.2 billion earlier this year, the rewards from patience can
be substantial. And it's important to note that while RespRx is
currently targeting COPD, it also has the potential to treat
multiple indications where a better and safer standard of care is
needed.
Video Link: https://www.youtube.com/embed/mlG8HDv06uk
HODL Can Be Rewarding
Notably, holding GW Pharma stock through the years was no easy
task either. But after years of trials and errors, its breakthrough
CBD-based epilepsy drug, Epidiolex, took the market by storm. It
also changed regulators and big pharma's views, who initially
shrugged off CBD-based pharmaceuticals as a passing fad. That's no
longer the case, and JAZZ may have started a consolidation phase
where even the smallest companies can be included. But, to be
included, a company needs assets. And PAOG does.
In fact, RespRx has earned patent protection for its innovative
cannabis extraction process. Thus, it could become a
revenue-generating asset without the need to bring a single product
to market. In fact, in a recent interview, the extraction process's
inventor said that his extraction method was professionally
recognized as producing better quality CBD extracts than GW Pharma.
That news shouldn't stay unnoticed for long, especially with JAZZ
potentially igniting a bidding war for patent-protected extraction
processes.
Better still, PAOG owns other assets and agreements in place
that invite multiple shots on goal. In fact, beyond its COPD
pharmaceutical initiatives, PAOG is advancing a nutraceutical
product line that they believe can effectively compete against
already marketed, higher-priced brands.
Deals in place are advancing the mission.
Nutraceuticals Program Gets A Boost
Notable for its size, PAOG is engaging with the Puerto Rico
Consortium for Clinical Investigation (PRCCI) to develop its
proprietary Cannabidiol (CBD) extract into a nutraceutical product.
The agreement adds value and, more importantly, positions PAOG to
benefit from additional PRCCI expertise that can help accelerate
potential nutraceutical marketing approvals. If they are successful
in doing so, PAOG, despite its small size, could very well be
positioned to market a CBD-based treatment to replace addictive and
often harmful prescription drugs.
And with CBD-based therapeutics becoming more mainstream, PAOG
believes that through its association with PRCCI, it can earn
expedited review and hopeful approval from regulatory
agencies.
Thus, the roughly 340% gain in share price since the start of
the year may be just the start of a more sustained move higher. Its
deals with other companies could help to appreciate its
value.
Therefore, the stock's recent weakness could present an
opportunity, especially to investors willing to invest with a
long-term investment horizon. Remember, despite the significant
advances and popularity, CBD-based medicine is a new science.
However, interest by "big pharma" and the approval by the FDA for
Epidiolex does send a message that CBD-based therapeutics work,
they are safe, and they can be approved for marketing when
effective. Many analysts in the space suggest that the FDA will
soon embrace the totality of benefits offered by this natural
compound.
And that puts PAOG in the right space at the right time.
Moreover, like GWPH, they have a similar potential to succeed.
Giving time, and having patience, could be very well rewarded.
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Source - https://www.marketwatch.com/press-release/heres-why-pao-group-inc-stock-looks-tremendously-undervalued-dividend-and-cbd-based-nutraceuticals-partnerships-are-two-reasons-2021-03-18?mod=mw_quote_news_seemore
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