November 19th, 2021 | 13:13 CET
Sativa Wellness Group, Aurora Cannabis, TUI - Rising consumer spending on wellness and travel
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
Sativa Wellness Group - Another step closer to its lofty goals
The legalization of cannabis has created an industry worth billions. Sativa Wellness wants to cut itself a piece of this pie and set itself very lofty goals in the process. The Company intends to become one of the leading manufacturers and high-quality distributors of CBD and wellness products and services in Europe. Elemental to this is the implementation of full vertical integration of supply chains and the expansion of the distribution network.
Currently, Sativa is focused on the UK, operating in three business areas. CBD products for consumers are offered under the Goodbody Botanicals brand. With its subsidiary PhytoVista, the Group operates CBD and hemp testing laboratories. Goodbody Wellness clinics provide testing services - including COVID testing - for clinics, as well as direct-to-consumer and direct-to-business services via a telemedicine consultation service. Sativa now has more than 80 clinics in operation. Most recently, it announced a distribution partnership in Germany.
Recently, the Company announced a partnership with Superdrug Stores to offer a full range of blood testing services. The agreement includes 40 Superdrug locations where trained nurses draw blood for a range of tests. Customers order the test they want on the Goodbody Clinic website. They can then choose to have a personal blood test, select a Superdrug clinic or use one of the participating Goodbody stores to collect the blood. Commenting on the new developments, Geremy Thomas, Executive Chairman, said, "Our Goodbody clinics' partnership with Superdrug for wellness blood testing expands the options for customers. It allows them to have the test they want at a location that is convenient for them and allows them to take control of their wellness."
The Company continues to exceed the goals it has set for itself, reflected in its most recently released quarterly data. Over the same quarter last year, third-quarter revenue was up 977% to CAD 8.6 million, nearly a tenfold increase. Gross profit increased to CAD 4.59 million, with an even slightly higher rate of growth. The gross profit margin was reported at the previous year's level of 53%. After a loss of CAD 1.19 million, the Company managed to be in the black with a net profit of CAD 14,000 in Q3. The Company has a moderate valuation level with a stock market value of around CAD 26 million.
TUI - The USA opens its doors again for travelers
For a few days now, it has been possible for EU citizens to enter the USA again, provided they have been fully vaccinated and have tested negative for the coronavirus. The German Lufthansa stated that there is great demand, and it expects a load factor on the pre-crisis level in the coming weeks.
Christmas shopping in New York or a beach vacation in Florida attracts many tourists to the United States. "We see a significant catch-up effect in travel, both in short-term bookings, especially by couples and small groups for November and December, and in long-term trips by families during the Easter and summer vacations," explained newly appointed TUI Germany CEO, Stefan Baumert.
This news has completely bypassed the share. In the first quarter, the share certificates still cost around EUR 4.50 at times, and now EUR 2 less is being called on the stock exchange. That means that the Group is still valued at EUR 2.8 billion. The average analyst estimates for 2021 are sales of EUR 5.6 billion and a loss of EUR 2.2 billion. The turnaround is expected to occur in 2022, when experts anticipate sales of EUR 16 billion and a return to the black, with profits of EUR 234 million. Overall, analysts currently rate the stock as "hold".
Aurora Cannabis Inc - Can the world's number two finally take off thanks to a reduced quarterly loss?
Canadian Company Aurora Cannabis, based in Edmonton, Alberta, is the world's second-largest cannabis producer. With a market capitalization of around CAD 1.9 billion, the Company has an 8.74% stake in the Prime Alternative Harvest Index, just behind market leader Tilray (8.96%). The producer of medical and consumer cannabis products, which has been in the red for years, has recently come under pressure on the stock market, like other cannabis stocks. But there is light at the end of the tunnel.
Aurora managed to narrow its loss to CAD -0.06 in the past quarter, down from CAD -0.90 in the corresponding quarter last year. Analysts had forecast a loss of CAD -0.256. After the announcement of the figures, the share price increased by up to 7%. One reason for the friendly attitude of investors is likely to be rooted in the expectation that there could soon be federal marijuana legislation in the US, which could allow companies like Aurora Cannabis to access regular services, especially in the banking sector.
In anticipation of an imminent solution in the US, Aurora had already acquired Reliva LLC. in 2020, one of the largest US producers of CBD products. It is also in line with the strategy of the new CEO Miguel Martin, in office since September last year, to focus on profitable markets and niches in the future. This focus definitely makes sense.
All three of the stocks mentioned above are benefiting from rising consumer spending in the fields of wellness, health and travel. TUI is an attractive turnaround story at the current share price level. Sativa Wellness Group offers an exciting investment story at a moderate valuation. If Aurora manages to reduce its loss further, the stock is also worth a look.
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