Occidental Petroleum Corporation

Occidental Petroleum Corporation (OXY: NYSE) is an international energy company with assets in the United States, Middle East, Africa and Latin America. The company is one of the largest oil producers in the U.S., including a leading producer in the Permian and DJ basins, and offshore Gulf of Mexico.

Key Highlights:

• The recent volatility in the oil prices on the back of resurgence in the delta variant cases across the world is raising a red flag on a potential oil demand recovery.
• The stock is trading well below the crucial support levels of 100-day and 50-day SMAs, which is a bearish indicator.
• From EV to EBITDA multiple standpoints, OXY shares are available at an NTM EV/EBITDA multiple of 4.4x compared to the industry (Oil & Gas) median of 3.8x.
• The company is highly leveraged with total debt/equity ratio at the end of March 2021 stood at 4.22x against the industry median of 0.78x.

Conclusion:

The resurgence of delta variant may affect the demand recovery for oil, which is negative for the group. Moreover, the company is fundamentally not so strong which can sustain a fresh blow to the oil industry. Therefore, based on the above rationale we recommend a “Watch” rating on the stock at the closing price of USD 26.43 on August 3, 2021.

Source: REFINITIV, Analysis by Kalkine Group

Workhorse Group Inc.

Workhorse Group Inc. (NASDAQ: WKHS) is a technology company focused which provides sustainable and cost-effective solutions to the commercial transportation sector. The company creates all-electric delivery trucks and drone systems, including the technology that optimizes the way these mechanisms operate.

Key Highlights:

• Prices closed below the 50-days and 100-days simple moving averages (SMA), suggesting a bearish trend.
• For Q1FY21, the company reported a net loss of USD 120.506 million, as compared to a net profit of USD 4.76 million.
• The group reported improvement in production during the last few months, while it expects to produce nearly 1,000 units in FY21. However, due to the lack of profitability along with any delay in the implementation schedule, the group might witness a liquidity crunch, which might dampen the upcoming performance of the company.
• On the valuation front, the stock is trading at and EV to Sales multiple of 7.2x on an NTM basis, as compared to the industry (Automobiles & Auto Parts) median of 1.0x.

Source: REFINITIV, Analysis by Kalkine Group

Conclusion: The stock price corrected ~68% and ~39% in the last six months and nine months, respectively. The revenue model of the company looks promising as it can reduce the time frame of the supply chain segment. However, the implementation of the project is time-consuming and depends upon the acceptability by the end consumer. Hence, based on the aforementioned facts, we prefer to remain on the sidelines and recommend a ‘Watch’ rating on the stock at the closing price of USD 10.71 on August 03, 2021. 

Flora Growth Corp

Flora Growth Corp (NASDAQ: FLGC) is focused on developing business for the purpose of cultivating, processing and supplying all-natural, medicinal-grade cannabis oil, cannabis oil extracts and related products to large channel distributors, including pharmacies, medical clinics, and cosmetic companies.

Key Highlights:

• The leading momentum indicator 14-days RSI is hovering in a steep overbought zone at 85.12, indicating a potential correction or consolidation in the near-term.
• The company is yet to report a revenue from its operations and posted a higher net loss of USD 14,334 million in FY20, as compared to USD 2,844 million in pcp (March to December 2019).
• The company recently signed Letter of Intent with an international distributor based in Australia to provide raw and finished medical cannabis products for medical cannabis patients

Source: REFINITIV, Analysis by Kalkine Group

Conclusion: The group’s performance remained under the scanner, and the company is yet to report a stable income from its operations. The stock of FLGC soared ~242% in one month due to the recent agreements. However, due to the presence of several cannabis players within the North American market, we believe it is too early to comment on the upcoming business prospect of the firm.  Moreover, the stock is recently listed, and we have limited financial history with us. Hence, based on the above facts, we prefer to remain on the sidelines and recommend an “Avoid” rating on the stock at the closing price of USD 12.71 on August 03, 2021. 

Startech Labs, Inc.

Startech Labs, Inc. (LAAB: OTC) formerly UpperSolution.com, is a development-stage company. The Company's business is to create an independent and unbiased mobile application that enables consumers to find the cellular rate plan for their need and getting real-time notifications when a new cellular plan is available.

Key Highlights

• The Company has not generated any revenues. As on February 28, 2021, the company reported net loss of USD 14,794.
• The Company has incurred net losses since inception on April 20, 2013, through February 28, 2021.
• As on February 28, 2021, the company reported higher working capital deficiency at USD 175,986 compared to USD 141,881 on May 31, 2020.
• The 14-day RSI of the stock is also hovering in an overbought zone at 88.36, which suggests that the stock price may consolidate or correct from the current levels.

Source: REFINITIV, Analysis by Kalkine Group

Conclusion: The company has failed to register revenue and has been incurring losses since its inception. Recently, the stock of LAAB seen a strong rise, with a return of 229.4% in only one month. As a consequence, the stock's 14-day RSI is hanging in the overbought zone at 88.36, indicating that the stock price may consolidate or drop from present levels. Therefore, based on the rational discussed above, we recommend an “Avoid” rating on the stock at the closing price of USD 1.12 on August 3, 2021.

*The reference data in this report has been partly sourced from REFINITIV.