Small-Cap Sunday: AXIL Brands, Electrovaya Inc., Cannabix Technologies, Airnet Technologies, and Jushi Holdings
The TDR Three Key Takeaways regarding Small Cap Sunday Highlights:
- AXIL Brands shows an impressive 62% annual revenue growth in the hearing protection tech market.
- Electrovaya’s 51% revenue growth CAGR and 100+ patents increase the position of the industrial battery market.
- Jushi has demonstrated strong cost control, improving gross margins by 8.4% and reducing SG&A expenses by 13%.
Small Cap Sunday analyzes five small-cap stocks: AXIL Brands (NYSE: AXIL), Electrovaya Inc. (NASDAQ: ELVA), Cannabix Technologies (OTC: BLOZF), Airnet Technologies (NASDAQ: ANTE), and Jushi Holdings (OTC: JUSHF), examining their market positions, financial health, and future prospects.
AXIL Brands, based in Los Angeles, operates in the hearing protection industry by integrating high technology with traditional hearing protection devices. Trading at $7.42 per share with a market cap of $42 million, Axel Brands has 5.7 million shares outstanding and a daily trading volume of approximately 100,000. The company’s revenue over the last 12 months was $27.8 million, highlighting an impressive 62% annual growth.
AXIL Brands’ gross margin stands at 74%, driven by their innovative products that combine hearing protection with Bluetooth connectivity, enabling users to listen to music or take calls while engaging in noisy activities. Strategic partnerships with USA Shooting, Kinsey’s Outdoors, and Racing Electronics further bolster their market position. Additionally, their credit score of 10.5 indicates strong financial health, with working capital of $6.7 million and liabilities at 37% of assets.
Electrovaya Inc., based in Toronto, focuses on lithium-ion battery technology for industrial applications, distinguishing itself from competitors focused on consumer markets. With a share price of $2.49 and a market cap of $84 million, the company has 34.1 million shares outstanding and a daily trading volume of around 72,000. Electro Veja’s revenue growth is noteworthy, with a 51% CAGR over the past five years and gross margins at 30%.
The company has over 100 patents and serves more than 12 Fortune 100 clients, leveraging their reshoring strategy to attract North American business. Despite their strong market position, Electrovaya’s liquidity is tight, with current assets and liabilities both at $27 million. Their EBITDA for the last 12 months was $4 million, indicating positive cash flow, but the company needs to manage its free cash flow and CAPEX spending closely.
Cannabix Technologies, headquartered in Vancouver, is pioneering the development of cannabis breathalyzers, addressing a significant need in the drug testing market. Trading at $0.44 per share with a market cap of $50 million, the company has 115 million shares outstanding and a daily trading volume of about 100,000. The total addressable market for drug testing in North America was $6 billion last year, with a projected CAGR of 13.5%.
Cannabix Technologies is in the pre-revenue stage, investing heavily in R&D to bring their technology to market. They reported a working capital of $3.7 million, with a free cash flow of negative $1.3 million last year, of which $1 million was spent on R&D. The company’s partnership with Omega Laboratories and successful proof-of-concept press releases indicate a promising future, albeit with high risk.
Airnet Technologies, formerly an outdoor advertising and in-flight internet company, has now pivoted to crypto mining. Trading on the Nasdaq , the company presents significant red flags, including the absence of a functioning website, outdated financial reports, and no recent analyst calls since 2015. Once trading as high as $480, the stock has plummeted to penny stock status, highlighting the risks associated with unclear business models and governance issues.
Jushi Holdings, a multi-state cannabis operator, operates in key states including Pennsylvania, Virginia, Ohio, Illinois, Massachusetts, Nevada, and California. Trading at historic lows, the company reported $270 million in revenue for 2023. Despite the challenging market conditions, Jushi has demonstrated strong cost control, improving gross margins by 8.4% and reducing SG&A expenses by 13%. However, their liquidity and leverage remain areas of concern.
Jushi’s free cash flow improved by 18.8% over the last 12 months, almost reaching a break-even point. With upcoming earnings reports and potential political catalysts, Jushi presents a compelling opportunity in small-cap category, albeit with higher risks associated with their balance sheet.
The small-cap stocks highlighted this week demonstrate a range of opportunities and risks. AXIL Brands and Electrovaya demonstrate strong growth potential and strategic market positions, while Cannabix Technologies offers high-risk, high-reward prospects in the emerging cannabis breathalyzer market. Airnet Technologies serves as a cautionary example of the importance of due diligence, and Jushi Holdings highlights the complexities of investing in the cannabis industry.
This is just a brief summary of what we covered on Small Cap Sunday. Check out the full episode to learn more about each company and what we found in our analysis.
