Four Reasons to Buy This Stock

Investment and Company Research
Opportunity Research
COMPANY UPDATE

While the stock market’s performance of the past two days is enough to give most investors pause, an opportunity exists to invest in an under-the-radar firm in a fast-growing industry that trades at a low valuation relative to its peers and our price target.

We initiated coverage of ML Capital Group (OTCQB – MLCG), an emerging company in the e-cigarette and vapor pen space, in June and the stock more than doubled in a matter of weeks as it had been oversold.  The Company, and its industry are on a tremendous sales growth trajectory and we outline four reasons why to buy the stock in our latest research update.  

icon Download Report in PDF Or Scroll down to read the complete report below.

ML CAPITAL GROUP INC.

Four Reasons to Buy This Pure Play Cannabis Stock

Rob Goldman
rob@goldmanresearch.com

July 9, 2014
 

ML CAPITAL GROUP INC. (OTC:QB - MLCG - $0.0293)

Price Target: $0.24 Rating: Speculative Buy
 

COMPANY SNAPSHOT

KEY TAKEAWAYS

ML Capital Group, Inc.'s primary business consists of producing products and providing services that support the medical marijuana industry and enhances the lives of the patients that have turned to medical marijuana/cannabis to manage their various ailments. The Company currently produces and markets its products and services under the SuperStar brand name, including vapor pens, mobile applications, and books. The Company does not directly engage in the growing, manufacture, or distribution of medical marijuana, cannabis, or cannabis by-products, thus placing it as one of the safest types of companies in the medical marijuana industry.

 

KEY STATISTICS

 
Price as of 7/7/14 $0.0293  
52 Wk High - Low $1.45 – $0.01  
Est. Shares Outstanding 82M  
Market Capitalization $2.4M  
3 Mo Avg Vol 289,000  
Exchange: OTC:QB  
 

COMPANY INFORMATION

ML Capital Group Inc.
16810 E. Avenue of the Fountains
#104
Fountain Hills AZ 85268
www.MLCapitalGroupInc.com

Phone : 480.816.5308
Email: lisa@mlcapitalgroupinc.com

Conclusion: Since our initiation of coverage in June at a price of just under $0.02, the stock nearly tripled, as investors recognized the low valuation relative to the huge opportunity.  Although the stock has drifted lower in recent days, we maintain that the Company’s positioning is even stronger than before, the stock remains undervalued, and it could easily again trade toward the $0.06 level in the coming weeks. Therefore, we continue to rate these shares Speculative Buy. Against this backdrop here are four reasons to buy the stock today.

Reason #1: Company gaining distribution traction

ML Capital recently launched sales of its vapor pen and accessories for use with tobacco, e-liquid, and medicinal marijuana. With a steady increase in the number of its distribution and medical marijuana dispensary channels, the Company has already begun to book meaningful initial wholesale and retail sales. The products are “sticking” in the marketplace so MLCG plans to introduce new, related products in the coming weeks and months.

Reason #2: Science is on its side

Studies indicate e-cigs and vapor pen usage serve as highly effective smoking cessation devices as well as an alternative to traditional tobacco-based cigarettes. Thus, the market could emerge as one of the fastest growing consumer segments in years. Future government guidelines and labeling could dramatically boost sales. The recent $135M purchase of Blue eCigs by Lorillard (NYSE – LO), the 3rd largest tobacco seller in the U.S., demonstrates the huge market opportunity

Reason #3: Stock is way too cheap

As noted in our June report, MLCG’s valuation pales in comparison to its publicly traded peers. For example, e-cig leader MCIG, which carries a $145M market cap, recorded sales of $110,000 for 1Q14 and vapor company Vape  Holdings (OTCQB – VAPE), which recorded an estimated $31,000 in Q1 sales, carries a $19M market cap. This compares with the current $2M market value assigned MLCG. Even at our target price of $0.24, the market cap would only be $20M. As a result, this under-the-radar vapor pen and medical marijuana play offers the greatest upside, in our view.

Reason #4: U.S. market trends are in the Company’s favor

Just yesterday, Washington State became the second state in the country to open the market for the legal sale of recreational marijuana.  Plus, other states and jurisdictions have gotten into the act. On Monday, the State of New York became the 23rd state in the union to legalize and permit the sale and use of medical marijuana, while in the District of Columbia voters appear to have gotten enough votes to have proposed recreational marijuana approval legislation on the ballot in November. All of these steps can exponentially increase the size of MLCG’s market.

Bonus: With the stock market reeling, it should be noted that since a stock like MLCG does not trade in correlation with the broader market, the stock could offer a speculative, high potential alternative for opportunistic investors.

For more information, please read or download our detailed Company Report issued on June 17, 2014. http://www.goldmanresearch.com/20140617787/Opportunity-Research/the-top-vapor-pen-opportunity.html

Recent Trading History For MLCG

(Source: www.Stockta.com)

You Might Also Like

Senior Analyst: Robert Goldman

Rob Goldman founded Goldman Small Cap Research in 2009 and has over 20 years of investment and company research experience as a senior research analyst and as a portfolio and mutual fund manager. During his tenure as a sell side analyst, Rob was a senior member of Piper Jaffray's Technology and Communications teams. Prior to joining Piper, Rob led Josephthal & Co.'s Washington-based Emerging Growth Research Group. In addition to his sell-side experience Rob served as Chief Investment Officer of a boutique investment management firm and Blue and White Investment Management, where he managed Small Cap Growth portfolios and The Blue and White Fund.

Analyst Certification

I, Robert Goldman, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report.

Disclaimer

This Opportunity Research report was prepared for informational purposes only.

Goldman Small Cap Research, (a division of Two Triangle Consulting Group, LLC) produces research via two formats: Goldman Select Research and Goldman Opportunity Research. The Select format reflects the Firm’s internally generated stock ideas along with economic and stock market outlooks. Opportunity Research reports, updates and Microcap Hot Topics articles reflect sponsored (paid) research but can also include non-sponsored micro cap research ideas that typically carry greater risks than those stocks covered in the Select Research category. It is important to note that while we may track performance separately, we utilize many of the same coverage criteria in determining coverage of all stocks in both research formats. Research reports on profiled stocks in the Opportunity Research format typically have a higher risk profile, and may offer greater upside. Since June 2014, Goldman Small Cap Research has been compensated by the Company in the amount of $5500 for research subscription services, including $1500 for this update. All information contained in this report was provided by the Company via filings, press releases or its website, or through our own due diligence. Our analysts are responsible only to the public, and are paid in advance to eliminate pecuniary interests, retain editorial control, and ensure independence. Analysts are compensated on a per report basis and not on the basis of his/her recommendations.

Goldman Small Cap Research is not affiliated in any way with Goldman Sachs & Co.

The information used and statements of fact made have been obtained from sources considered reliable but we neither guarantee nor represent the completeness or accuracy. Goldman Small Cap Research did not make an independent investigation or inquiry as to the accuracy of any information provided by the Company, or other firms. Goldman Small Cap Research relied solely upon information provided by the Company through its filings, press releases, presentations, and through its own internal due diligence for accuracy and completeness. Such information and the opinions expressed are subject to change without notice. A Goldman Small Cap Research report or note is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed.

This report does not take into account the investment objectives, financial situation, or particular needs of any particular person. This report does not provide all information material to an investor’s decision about whether or not to make any investment. Any discussion of risks in this presentation is not a disclosure of all risks or a complete discussion of the risks mentioned. Neither Goldman Small Cap Research, nor its parent, is registered as a securities broker-dealer or an investment adviser with FINRA, the U.S. Securities and Exchange Commission or with any state securities regulatory authority.

ALL INFORMATION IN THIS REPORT IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESSED OR IMPLIED, OR REPRESENTATIONS OF ANY KIND. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE FOR THE QUALITY, ACCURACY, COMPLETENESS, RELIABILITY OR TIMELINESS OF THIS INFORMATION, OR FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT MAY ARISE OUT OF THE USE OF THIS INFORMATION BY YOU OR ANYONE ELSE (INCLUDING, BUT NOT LIMITED TO, LOST PROFITS, LOSS OF OPPORTUNITIES, TRADING LOSSES, AND DAMAGES THAT MAY RESULT FROM ANY INACCURACY OR INCOMPLETENESS OF THIS INFORMATION). TO THE FULLEST EXTENT PERMITTED BY LAW, TWO TRIANGLE CONSULTING GROUP, LLC WILL NOT BE LIABLE TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY, OR OTHER THEORY WITH RESPECT TO THIS PRESENTATION OF INFORMATION.

For more information, visit our Disclaimer: www.goldmanresearch.com