February 23, 2021 -- InvestorsHub NewsWire -- via Hawk Point Media -- PAO Group, Inc. (OTC: PAOG) shares are trading higher by roughly 63% since the start of February. The jump in value comes after a series of announcements showing PAOG positioning itself to benefit from multiple near-term initiatives. They are also set to become a revenue-generating company, with its first tranche of receivables expected to be announced in its Q4 update.

Last Thursday, in fact, PAOG highlighted its anticipated revenue expected from that CBD nutraceutical expansion initiative. They also published an online, multimedia presentation detailing the company's CBD nutraceutical development expansion plans, detailing its strategic engagements with Puration, Inc. (OTC: PURA), North American Cannabis Holdings, Inc. (USOTC: USMJ), and Alkame Holdings, Inc. (USOTC: ALKM). That presentation kept shares in demand.

PAOG shares remain actively traded, and investors appear to be positioning ahead of several expected updates. Its focus on CBD-based treatments targeting COPD is certainly attracting attention.

Video Link: https://www.youtube.com/embed/WL_PixD5Ln4

The Trend Is A Friend

The increase in February is a continuation of a bias that started at the beginning of the new year. To date, shares are higher by roughly 328%. Better still, the trend is staying bullish after PAOG announced accelerating its initiatives to develop CBD alternatives to treat patients with symptoms associated with Chronic Obstructive Pulmonary Disorder (COPD). 

The bullish sentiment took a shot of adrenaline after a multimedia presentation showed how PAOG plans to capitalize on emerging opportunities in the booming nutraceutical product sector. And even at roughly a penny, PAOG is already positioned to advance a nutraceutical product line that can potentially compete against more established, higher-priced companies. To its credit, PAOG completed several transformative deals that clear a path to monetize assets in the coming quarters. 

More specifically, the expected benefits from an acquisition made last year are coming into focus. It involved PAOG acquiring RespRx from Kali-Extracts, Inc. The asset is a valuable one and makes PAOG an immediate contender in the medical-grade cannabis treatment sector to treat COPD. Notably, PAOG also acquired the ability to leverage a patented cannabis extraction method that shows tremendous promise to treat many diseases. COPD is the first in line. 

The addition of RespRx adds immediate fire-power to its product pipeline. It also sets the stage for PAOG to target additional indications where a better and safer standard of care is needed. And while RespRx might be getting credit for the recent surge, it's more likely that a combination of strategic accomplishments is responsible for driving shareholder value higher. 

Advancing Nutraceuticals With Help From PRCCI

In addition to PAOG's promising development-stage program that could bring a pharmaceutical-grade nutraceutical COPD treatment to market, PAOG also announced engaging with the Puerto Rico Consortium for Clinical Investigation (PRCCI) to assist with developing its proprietary Cannabidiol (CBD) extract into a nutraceutical product. The intention of that joint effort is to again find and develop an effective CBD-based treatment to target COPD's debilitating effects. The alliance adds tremendous credibility and sector expertise to the initiative. 

Moreover, with PAOG's CBD-based treatment being a potentially better treatment option that can replace addictive prescription drugs with severe side effects, the company hopes to receive expedited approval processes from a growing willingness by regulatory agencies to accept CBD and cannabinoid compounds as viable and effective treatment options. And "big pharma" is watching the action, evidenced by Jazz Pharmaceuticals' (NASDAQ: JAZZ) purchase of GW Pharma (NASDAQ: GWPH) for $7.2 billion earlier this month. 

Perhaps the biggest surprise is that in addition to its impressive development-stage portfolio, PAOG has something that most nano-cap stocks don't- REVENUES. 

Revenues Are Value...Investors Take Notice

PAO Group is doing what most of its peers are not doing...generating revenues. It's obviously an important consideration to any stock purchase, but for development-stage companies like PAOG, it can be a deciding factor. 

Earlier this month, PAOG said it expects to announce revenues during Q4 2020. Those results are expected to ger reported soon. However, within its update, PAOG guided that revenues are expected to continue through 2021 by capitalizing on multiple nutraceutical-focused initiatives. They will also benefit from a sales order agreement of $300,000 made through its cannabis cultivation subsidiary acquired from Puration, Inc. in 2020. 

Going out further, PAOG expects to receive approximately $50,000 in revenue per quarter for six quarters, with its first $50,000 in revenue expected to be reported for Q4 2020. And there's more.

A deal is also in place with Alkame Holdings Inc. to develop and distribute its CBD nutraceuticals. That deal not only will help drive additional revenues toward the bottom line, but it also brings in North American Cannabis Holdings, Inc. to take on the distributor's role. Now, PAOG is in an alliance with two other sector companies with a specific skill set. And with the propensity of all three to make accretive deals, the likelihood for consolidation or additional beneficial agreements among the three is more than likely over the coming months. 

By assembling the pieces of this emerging develop-stage company, it's logical to assume that its valuation falls short of its intrinsic value. And while the stock is surging on a percentage basis, with shares trading at roughly two-cents a share, there are justifiable reasons for the shares to continue higher. 

Increasing revenues, accretive deals, and access to powerful and innovative technology are only a few of the reasons to like the stock at these levels. Even at levels 3X higher, PAOG can substantiate its value. Of course, longer-term, 3X its current price should be a small drop in a large bucket. 

PAOG Can Transform In 2021

With the updates from PAOG exposing blue sky, investors have been right to send shares higher. For this stock, "selling on the news" makes little sense as the deals usually create immediate value. Moreover, PAOG appears to be making deals only with industry companies to help expedite its near-term plans. Thus, focusing on where PAOG is going is a better strategy than evaluating a fair price for what they have just done. 

Indeed, PAOG is doing the things necessary for growth. First, they have multiple and active development-stage programs. Second, PAOG is making excellent strategic decisions to partner with industry players who add specific expertise to accelerate its plans. And, third, the company has positioned itself to receive revenues over the next six quarters, an accomplishment that some mid-cap biotechs can't claim. 

One thing is clear- the current share price does not fairly reflect the value that PAOG is creating. Moreover, a valuation of its assets, combined with what the company can do in the next 3-6 months, is ample fuel to drive prices considerably higher. The great news is that PAOG is transparent with its shareholders, and it's likely that more information to detail growth is on the way. There are just too many moving parts to think otherwise. 

It's been said many times by traders- Share price rarely tells the truth. But, despite the need for smaller companies to earn its recognition rather than have it handed to them by paid CNBC commentary, its stock prices eventually catch up with fundamentals. Knowing that, PAOG may not be a stock to trade but rather a stock to hold and watch mature.

And with several programs in action and partnerships developing, the wait for higher stock price levels may not take as long as some investors may think. PAO Group, Inc. is definitely out to impress in 2021.

 

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Other stocks on the move - AABB, RXMD and HCMC.

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