Ecofibre Share Price About to Hit Record High. Is Now the Time to Buy? (ASX:EOF)

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Ecofibre Share Price - ASX EOF
Ecofibre Share Price About to Hit Record High. Is Now the Time to Buy? (ASX:EOF)

Check this out. Relatively new ASX stock, Ecofibre Ltd [ASX:EOF] is close to breaking its all-time high.

The Ecofibre share price is up an incredible 130% gain since March.

Here’s why I bring this up. Ecofibre is bucking the trend for the wider cannabis sector at the moment. Most of these stocks are flat at best or going down.

Is it too late to buy Ecofibre?

Let’s consider the question. But first…

Who is Ecofibre Limited?

I first wrote about Ecofibre back in July.

I’ve been following it for months. Here’s why.

The company uses hemp to produce cannabis-based products.

It has a very large potential market to sell too, in different ways.

Currently, the company is divided into four areas, each focusing on its own market segment within the industry.

One of the divisions under the Ecofibre umbrella is Hemp Black.

This company is focused on research and development.

Another portion of the company produces hemp foods and also sells CBD based oils to healthcare professionals, mainly in the US.

Ecofibre also has Australian rich lister Barry Lambert on the board. That gives the business very good credibility in a sector that still needs to build trust with investors.

Why is Ecofibre rising?

Ecofibre peaked out along with the rest of the cannabis sector in July.

You can see this on the chart below…

Ecofibre share price chart

Source: Tradingview

Ecofibre has been trending higher over the last few weeks.

And that’s despite a lot of the wider the market grinding lower.

The Ecofibre share price looks set to break the high it made in July.

Why could that be? Look at a recent announcement Ecofibre released on the 13 November 2019.

Ananda Health, a division of Ecofibre, issued to the market an update on an eight-week trial from the US.

It was for the use of Hemp-Derived CBD oil.

97 patients who completed the study where regular users of Opioids for chronic pain.

Of the 94 people who participated in the study, 53% of them reduced their Opioid use. And a whopping 94% of them reported vast improvements to the quality of life.

That’s when measuring sleep, pain and even general mood during the day.

So far this is the largest study conducted on the use of CBD to reduce the use of opioids for the treatment of chronic pain.

The market’s positive reaction to this suggests investors are positive about the potential for CBD and hemp to capture significant market share in the enormous healthcare sector across the US and the globe.

However, we have to be aware that Ecofibre carries a rich valuation relative to the size of its current revenue.

It’s an exciting stock, no doubt. But you have to be mindful of how much you’re prepared to pay to access the opportunity. I’ll let you decide on that. But it’s a stock that definitely deserves a place on your watchlist.

As always, this is not a recommendation to buy or sell Ecofibre.
It is an update only. I hope you found it useful.

Until next time,

Jonathan Evans Signature

Jonathan Evans,
Analyst, Profit Watch