India Globalization Capital, Inc. (NYSEAMERICAN: IGC) has had an incredible run in the market as of late, and today seems to be no different as the stock is seeing strong gains to kick off the pre-market. So, what’s the deal? Well, the gains have to do with the company’s recent announcement of a product launch and it goes a bit deeper than that. Today, we’ll talk about:
- Why IGC gains continue;
- what we’re seeing from the stock; and
- what we’ll be watching for ahead.
Why Is IGC Running For The Top
Last week, India Globalization Capital announced that it had entered into a partnership agreement. Under the terms of the agreement, the company received the rights to commercialize several new beverages, including Nitro G, a sugar free energy drink.
In the release announcing the agreement, IGC said that it would be working on a new energy drink that includes CBD. While the company did not implicitly state that the new drink would be a formulation of Nitro G with CBD added to the mix, that’s what most are expecting here.
Nonetheless, since the announcement, IGC has climbed in value to trade at nearly 3 times what it was trading at before the announcement. New product and partnership announcements often lead to gains, but not gains that big. So, what’s the deal?
It all has to do with the sector that the announcement puts IGC in. Previously, the company was a clinical company working to use cannabis to solve age related problems like the treatment of Alzheimer’s disease. While the company is still doing this, the partnership agreement allows it to venture into the consumer goods space. So, it is finding itself in a completely new market.
Morevoer, the announcement that the company is working on developing a CBD-infused energy drink adds further investor interest. Recently, pot stocks have been all the rage in the investing community. Much of the excitement about pot stocks has been exacerbated by the fact that the DEA has reduced CBD to a Schedule V substance, meaning that it has the lowest potential for abuse and also meaning that access to CBD has changed, expanding the audience for products that include cannabidiol. So, the fact that the company is getting into the CBD space means that it is jumping into an emerging market as one of the very few players with a real chance at carving its own niche in the space. All in all, this is the real reason for the monumental gains that we’ve seen as of late.
What We’re Seeing From The Stock
The run in India Globalization Capital seems to be far from over as the stock clocks yet another pre-market filled with nothing but green. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:32), IGC is trading at $10.75 per share after a gain of $1.73 per share or 19.18% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on IGC. In particular, we’re interested in following the commercialization of Nitro G and the other beverages under the recently signed agreement, the development of the CBD-infused energy drink, and the continued development of the comapny’s pharmaceutical products. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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