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Acacia Diversified Holdings Inc (OTCMKTS:ACCA) Trying To Make A Comeback

Acacia Diversified Holdings Inc (OTCMKTS:ACCA) Trying To Make A Comeback
Written by
Jim Bloom
Published on
April 11, 2018
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Will Acacia Diversified Holdings Inc (OTCMKTS:ACCA) climb higher or tank as the overall industry remains subdued after one of the worst starts to a new year? Well, that’s the billion dollar question as the stock continues to flirt with a crucial resistance level after a recent bounce back.Acacia Diversified Holdings failed to live up to expectations, last year, on coming under immense pressure from short sellers. However, the stock has started showing signs of bouncing back, in what appears to be a reversal in the direction of trade. ACCA Daily ChartWith the stock currently trading at the $0.72 handle, it needs to rise and close above the $0.80 mark, if it is to be considered a bounce back play. The $0.80 mark is a critical resistance level, below which the stock remains susceptible to further declines given the underlying long-term downtrend.The stock’s underperformance may be attributed to a lack of updates from the company which has made it difficult for investors to gauge its growth prospects. Acacia Diversified Holdings need to serve up a breathtaking catalyst if it is to continue climbing high after losing a substantial amount of market value over the past few months.What Does Acacia Diversified Holdings Do?True to its name, Acacia Diversified Holdings is a company with operations spread across various industries. Initially, the company was engaged in the automotive auction industry as well as food-grade byproducts manufacturing business.However, in the recent past, the company has increased its focus in the young and explosive, cannabis business. The company boasts of state-of-the-art technology and equipment that allows it to be a big a player in the lucrative cannabis oil extraction business.Why is the stock trending up?The stock has been trending up, in recent weeks, on the Chief Executive Officer, Richard Pertile, announcing they are in the process of opening their first retail store in Tennessee. The store is to be used to sell, cannabis-infused body lotions, shampoos, and tropical.

“We are going to continue to evolve and grow. We are working right now on getting some flowers and clones planted in the ground for the upcoming season. We are excited about our outlook there in Tennessee; it is a very lucrative market for us. It is relatively close to our corporate headquarters which is Florida, and we are excited about it,” said Mr. Pertile

The stock also appears to have elicited keen interest from investors on the executive announcing plans to integrate cryptocurrencies into the business.Insider Trading ActivityInsider trading activities also appears to be fuelling momentum in the stock after recent sell-off. Reports that the Chief Executive Officer bought 1.2 million shares of the company’s stock seems to have caught many investors by surprise.High volume insider trading activity goes a long way in strengthening investor confidence given that it usually signals growing management confidence about a company’s long-term prospects.However, a lack of clear-cut updates has been one of the biggest undoings on Acacia Diversified Holdings outlook on Wall Street. The last time that the management team issued an important update about the company’s operations was last year.Late last year, the emerging cannabis company through its wholly owned subsidiary MariJ Pharmaceuticals received a License to Operate: Manufactured Food Establishment certificate from the Colorado Department of Health and Environment.

“This license validates the organic and food grade quality material the Company is able to produce from its mobile extraction labs on beneficial farms in Colorado. This license acquisition sets a new level for the company's mobile fleet, placing it in a new category of quality," said Richard K. Pertile, Acacia's Chief Executive Officer.

Financial PositionThe company is yet to issue financial results needed to gauge its financial position. However, mid last year, it admitted to securing a $5 million equity credit line with Peak One Opportunity Fund. If still place the credit line should provide the much-needed finances needed to advance the company’s efforts in commercializing cannabis products as well as extraction of cannabis oils.How Will Acacia Diversified Holdings Fare in 2018Acacia Holdings is still not yet out of the woods, despite a recent bounce back from all-time lows. Since the start of the year, Marijuana stocks have been on free fall, investors’ confidence in the industry has dropped.Concerns about supply glut in the industry have been a point of concern, seen as a sell-off catalyst. After a meteoric rise in the last two years, valuation concerns have been the order of the day in the cannabis. Acacia Diversified Holdings, which is one of the companies whose valuation skyrocketed on expanding operations into the cannabis business, has been one of the hardest hits by the valuation concerns.Acacia Diversified Holdings is still trading in a precarious position despite the recent bounce back. Given that sentiments in the broader industry are still at all-time lows, it may be wise to wait for further confirmations before taking a long position in the stock.Disclosure: We have no position in ACCA and have not been compensated for this article.

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