When talking about an excellent long-term play, one of the stocks come to mind is Gala Pharmaceutical Inc. At the moment, the company is publicly traded in NASDAQ with the symbol of GLPH. You might not have heard about this company, and that’s the reason why it may be a sleeping giant.
In this article, we are going to explore further why Gala Pharmaceutical Inc. should be on your watchlist.
GLPH is a company that is focused on developing innovative tools for cloning, tissue culture, and plant genetics. They are also focused on drug formulation and manufacturing, and all of that stuff. Frankly, nothing is surprising about these facts as most pharmaceuticals define themselves as such. The real exciting news about GLPH can be boiled down with one word, and that’s ‘Cannabis.’
While the world is starting to relax its attitude on the subject of cannabis, it’s still a big issue among law enforcement agencies. Because of the cumbersome regulations imposed by California, the industry is experiencing a bottleneck in the cannabis testing sector. For an investor, this is good for us. Bottleneck means inefficiency, and that usually means room for profit.
Now, GLPH is in the process of getting its approval to operate as a Type 8 Medical Cannabis Testing Lab. This might be the boring part to some so you can check out all the details at httpss://finance.yahoo.com/news/gala-pharmaceutical-positioned-significantly-benefit-133000751.html.
This is starting to get confusing, so let’s boil this down to simple terms. The heavy regulations created an environment where there’s a shortage of legal cannabis testing facilities. GLPH may soon get is approval to and start operating a business in a sector in which there’s significant demand, and little supply.
This reason alone may be enough to put GLPH on your watchlist. But, that’s not all.
Let’s take a look at Gala Pharmaceutical Inc. chart on the monthly timeframe. The first thing you’ll notice is the steep downtrend which started around its IPO. That’s in the past, and don’t let it distract you from the future.
The thing you need to observe is the smooth curve from the steep dive to its present flat base. The chart is basically telling you that GLPH’s stocks were way overvalued when it first traded. Around August 2016, the stock price started settling down, forming a flat base. From 2016 up to the present, the prices are still going sideways. Maybe you have missed it, so let’s repeat.
The price is forming a support for two years. With such a long time to build that kind of support, you can be confident to a degree that it will continue to hold.
Let’s put together what we know. First, we know there’s a shortage of cannabis testing. Second, GLPH may soon get its approval to operate as a legal testing facility for cannabis. Third, price charts say you may have a very strong support forming in the last two years.
It seems you’re in an excellent position for a low risk, high reward play.
This is a high reward play as when GLPH receives its approval, you can expect the stock to skyrocket.
It’s a low risk in a sense that buying the stock right now means you’ll be getting it at a price near the support area. The support has been established for two years. This also means you can confidently forecast it will unlikely go down below its seemingly solid support even if the company doesn’t get its approval.
Best case scenario, GLPH get its approval, and your investment zooms up. The worst case scenario is they don’t get the approval, and you’ll lose a bit of your investment. But since you’re buying near the support, it’s unlikely that it will drop further thus limiting your potential losses.
With so much upside and relatively low risk, GLPH is definitely a buy, or at least it should be on your watchlist.