Final Trade Detail

Helix TCS

Investors who followed this trade Generated a

36% Gain Return

Open Date

11/9/18

Close Date

2/27/19-7/25/19

Hold Time

98 Days - 258 Days

Buy Price

$1.24

Close Price

$0.95 - $2.40

%Gain/Loss

36% Gain

Original Recommendation

Helix TCS

Helix TCS (HLIX)

our opinion

buy

current price

$1.24

target price

$3.55

market cap

$$106M

div yield

0%

  • n/a

trade details

The market has given us a gift.

A chance to invest in a company in an industry that is absolutely exploding.

We’re talking about the cannabis industry.

Yes, you already know about it. Its growth is extraordinary. And isn’t expected to slow down anytime soon.

Worldwide legal cannabis trade grew 37% last year alone – worth about $9.5 billion. The United States accounted for 90% of it.

Projections show the legal cannabis trade will grow to over $23 billion in the U.S. by 2022. But we think those estimates are super conservative.

Why? Because projections continue to miss on the downside.

Colorado expected $98 million in tax revenue for fiscal 2015… a year after it raked in over $67 million in 2014. The $98 million got raised from the original $70 million forecast.

How much did Colorado earn in cannabis tax revenue for fiscal 2015? $130 million.

Other economic forecasters expected $190 million in cannabis tax revenue over four years starting 2015. Colorado has brought in over $770 million in tax revenue through September 2018… far more than they could’ve imagined.

Almost every other state is seeing the same thing… the people are choosing marijuana as an alternative or substitute over alcohol.

Cannabis will soon be legal across all 50 states. It’s undeniable.

It’s no wonder Constellation Brands invested $4 billion into Canopy Growth Corp. this year.

Constellation CEO Rob Sands ended up deciding to step down in March 2019 in order to focus on the cannabis market.

Let’s put some context around that decision.

Rob became CEO of Constellation Brands in 2007. Sands has done an amazing job since. Constellation has seen its stock rise more than 750% since. For him to leave the business now… should make you want to get immediate exposure into this space.

And we have what could be the best company in the space.

It is really the Square (SQ) of the cannabis space. And it has a dominant market share in the United States.

Square is up over 450% in the last five years alone.

We think there are similar gains to be made on this company.

And thanks to the market… it’s down 58% from this summer’s cannabis mania. And it’s down 82% since it’s high in 2017.

Yet it has grown its business so much more in the past 24 months. Its revenues grew 95% in the first six months of 2018 vs the prior year. And it’s showing no signs of slowing down.

In fact, we think it’s gaining market share.

The company we’re talking about is Helix TCS, Inc.

Helix TCS agreed to merge with BioTrackHTC this past March.

We think that was a move that set up Helix as a dominant player in the point of sales solutions in the cannabis industry for years to come.

BioTrackTHC has won contracts from nine state governments for its traceability software. We think the number of states that will use BioTrack’s software will continue to increase as all 50 states move towards full legalization.

Meanwhile, Helix also provides commercial inventory management and point-of-sale software to more than 2,200 cannabis businesses across 29 states and five countries.

This POS system helps commercial inventory management and keeps all these cannabis businesses organized… just like Square.

Reports estimate Helix to own a 28% share of the POS market for cannabis retailers. And it has 53% market share in states where only medical marijuana is allowed. 

This has led to a massive increase in revenue. As stated above, revenue almost doubled in the first six months of the year vs. 2017.

Gross profit margins are at a solid 30%. Yet we think margins should continue to expand as Helix is able to cross-sell their product lines to existing operators.

However, we should mention growth has come at increasing costs – specifically in wages and salaries.

We assume Helix will consolidate and cut jobs to remove overlap from the merger… further padding margins.

And what makes us confident in Helix continuing to grow is the man driving the ship.

Zachary Venegas is the CEO. 

Venegas’ accomplishments are nothing short of amazing.

He was an infantry officer in the U.S. Army. He got his MBA in Finance and International Business from NYU’s Stern School of Business and a BS in Classical Arabic and Portuguese Languages from the United States Military Academy, West Point.

He speaks nearly 7 languages. Worked for JP Morgan. Led Spruce Investment Advisors’ Strategic Advisory Group which closed a portfolio worth $500 million. And also was the co-founder and managing partner of Scimitar – a Dubai-based private equity and venture firm focused on Europe, Africa and the Middle East.

We believe Venegas will have continued success with Helix.

Buying Helix and holding for a couple years should prove to be one of the better decisions we think you can make.

The cannabis industry is in an unstoppable growth trend worldwide, let alone the U.S.

Remember, it wasn’t the gold miners who made the most money during the 19th century Gold Rush. More than 90% went broke looking for gold.

It was the people who provided the picks and shovels who became wealthy.

Helix is the picks and shovels play in the cannabis industry. It should continue to soar as the cannabis industry explodes over the coming years.

Trade Recommendation:

Buy Helix up to $2

(Be patient if HLIX is above our buy up to price. It’s a volatile name and we expect it to come into buy range on more than one occasion in the near future. Do not chase this name higher.)