I’m not a huge fan of penny stocks. As I always tell clients, penny stocks are trading under $1 for a reason, and that reason is usually not a good one. But, every rule has exceptions. And my exception to the penny stocks rule is Numinus Wellness (OTCMKTS:LKYSF). The LKYSF stock price today hovers around 80 cents — not a great sign. But the fundamentals underlying Numinus Wellness are very compelling, and if a few things go right for this company, the LKYSF stock price could soar to $10 or more over the next few years.
Because of the Shroom Boom.
Long story short, the Shroom Boom is the impending mass legalization and commercialization of psychedelic-inspired medicines for the treatment of mental health disorders, like ADHD, addiction, and depression. It’s a huge trend. It’s the Cannabis Boom 2.0. It will ultimately end with a new class of medicines that will treat disorders that, for decades, medical professionals viewed as uncurbable.
Numinus Wellness is at the forefront of this megatrend. It’s one of the few companies in the world that is actively pushing forward of the psychedelic-inspired medicines front, and indeed, one could argue that Numinus has emerged as a leader in this field. Yet, the other “leaders” in this field are worth more than a billion dollars. Numinus is worth less than $200 million — and $65 million of that market cap is covered cash.
Clearly, LKYSF stock has huge upside potential.
So, if there were every a time and a place to buy a penny stock, that time is now and the stock is Numinus.
Here’s a deeper look.
LKYSF Stock: Welcome to the Shroom Boom
When it comes to LKYSF stock, it’s all about the Shroom Boom.
Mental health is a huge problem. About 450,000 people worldwide die from drug use every year, while nearly a billion people worldwide presently suffer from a mental health or substance abuse disorder.
As it turns out, the reason mental health disorders are such a huge unmet medical need is because we have long shunned the very drugs which work best to cure mental health issues: psychedelics.
Yes. Those psychedelics. Magic mushrooms. LSD. MDMA. DMT.
A recent wave of academic research has discovered that these formerly-taboo drugs actually have immense therapeutic potential.
A pair of recent Johns Hopkins studies have found that the active ingredient in “magic mushrooms” (something called psilocybin) can significantly help with smoking cessation and reducing alcohol dependence.
An even more recent Johns Hopkins study published in 2020 found that psilocybin can relieve anxiety and depression levels in people with life-threatening cancer diagnoses four-times better than traditional antidepressants on the market.
That finding corroborates a previous NYU study, which found that psilocybin causes a “rapid and sustained” reduction in anxiety and depression levels in cancer patients. Meanwhile, a recent UC Davis study found that psychedelic micro-dosing can produce beneficial behavioral effects in patient with mental health disorders.
The list of academic studies goes on and on.
This groundbreaking research has coupled with shifting public perception (Netflix has released a flurry of pro-psychedelic movies over the past 12 months, highlighted by Have a Good Trip: Adventures in Psychedelics) and changing laws (On Election Day 2020, Washington D.C. and Oregon both passed measures to decriminalize/legalize psilocybin) to create a foundation for a new class of superior psychedelic-inspired medicines to become the global treatment norm for mental health and substance abuse.
This is an investment megatrend that you don’t want to miss – and it all starts right now, with LKYSF stock.
A Leader in Psychedelic-Inspired Medicine Research
Numinus Wellness is a $180 million, fully-integrated and verticalized mental health company based in Canada that is focused on developing and delivering psychedelic-assisted psychotherapies to address various mental health and substance abuse disorders.
There are lots of companies in this space. But Numinus stands out for its early leadership position in the market.
The company’s Health Canada-licensed Bioscience Lab has been operating since 2012. It is broadly considered the first psychedelics-focused research lab in Canada. Because of this, Numinus is the first public company in Canada to receive a license to produce and extract psilocybin from mushrooms.
As the first and only company with this license, Numinus is the first company to both partner with MAPS on Canada’s first compassionate access trial of MDMA for PTSD, and plunge head-first into Canada’s first compassionate trial of psilocybin for substance use disorders. Plus, the company just received amendments to its federal license in Canada to allow for the possession, production, assembly, sale, export, and delivery of a wide variety of psychedelics, including Ketamine and LSD — also a first.
In essence, Numinus is the only company in Canada that is actively engaged in multiple trials testing psychedelic-inspired medicines for treating mental health disorders.
Meanwhile, as the leading company in psychedelics-inspired therapies research and testing, Numinus is also the leading company when it comes to commercializing and delivering these drugs. Through its Health division, Numinus is already actively supporting three clinics in administering ketamine-assisted psychotherapy.
So, Numinus is an early leader in commercializing and administering psychedelic-inspired medicines, too. Of course, that bodes well for LKYSF stock.
The Resources to Sustain Early Leadership
When it comes to early leaders in emerging megatrends, you have to always ask: Can they sustain their lead as the market grows?
With respect to LKYSF stock, the answer is yes.
That’s because, over the past several months, the company has executed multiple financing deals and now has $65 million in cash on the balance. Excluding the psychedelic market’s leader, COMPASS Pathways (NASDAQ:CMPS), that’s about as much cash as anyone has on hand in this industry.
With that cash balance and its recent business momentum, Numinus Wellness has what it takes to sustain its early leadership in the Shroom Boom via acquisitions, R&D investment, and strategic partnerships.
Long term, we see Numinus emerging as one of the more important players in the psychedelic-inspired medicines space.
Huge Valuation Upside for Numinus Stock
In the Shroom Boom, you have three leading companies: Numinus, COMPASS Pathways, and MindMed (OTCMKTS:MMEDF).
COMPASS is the clear leader with its COMP 360 treatment that is going through clinical trials. But none of these three research-first biotech startups has a revenue-generating product in market yet, and long term, they all have incredible potential.
Yet, while COMPASS Pathways features a $1.4 billion valuation and MindMed is worth $1 billion, the current LKYSF stock price implies a market cap for Numinus of just $180 million.
Back out the $65 million sitting on the company’s balance sheet, and you’re talking an enterprise value of just $115 million.
Some of this discrepancy can be explained through company maturity. But not all of it. Instead, fundamentally speaking, most of this gap should not exist — and that’s why LKYSF stock may be the best penny stock to buy today.
Bottom Line on LKYSF Stock
I typically don’t like penny stocks. But I do like LKYSF stock, because with Numinus Wellness, you have an early leader in a emerging megatrend, with a ton of cash, a ton of business momentum and a ton of potential. That’s why LKYSF stock is my favorite penny stock to buy today.
But it’s not my favorite stock to buy today.
Instead, the best growth stock to buy today is a company that reminds me of a young Amazon (NASDAQ:AMZN). Indeed, I think buying this stock today could be like buying AMZN stock back in 1997 — before it soared thousands of percent.
Which stock am I talking about?
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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