Since the middle of last year I’ve been covering Marrone Bio Innovations (MBII, NASDAQ) like white on rice. Below are a few soundbites, minus the sound, regarding why MBII was and is a sophisticated speculation:

• It’s one of the smartest ways to play marijuana! “Clean Cannabis” – that’s what well-read medicinal marijuana users are demanding now, and will increasingly be demanding in the future, upon learning of the negative health effects posed by growers using chemical pesticides (“Growers in California and Canada are beating our doors down”, said CEO/Founder Pam Marrone);
• Food products can’t be labeled “organic” unless they were grown with “bio-based” pesticides and stimulants. Marrone Bio is one of the few pure plays on the booming organic business (although 70% of its sales are to conventional farmers who are also seeing increased yields with Marrone Bio’s products), because it has 6 EPA approved bio-pesticide and bio-stimulants on the market.

This is a rapidly growing multi-billion dollar opportunity!

Marrone accumulated some debt over the years to fund its growth, so the balance sheet was a viable concern.

But that’s in the rear view mirror now!

As of early February, lenders converted $45 million worth of debt into equity at $1.08 per share. The balance sheet’s been restructured. Marrone’s debt is manageable at roughly $17 million and well-financed with the company holding around $30 million cash.

That refinancing transaction was incredibly important for Marrone.  We covered the news, and I recall being confused as to why Mr. Market didn’t embrace it. MBII should have been going up!

And it wasn’t.

But now it is!  Alas, MBII finally has momentum in its favor.

After consolidating between 90 cents and $1.20 for nearly a year, MBII has broken above the range. It’s got some head room up to $1.75 before facing some resistance.

You want to know what could push MBII up to $3 or even $5 per share?

Monsanto Isn’t Going To Be Too Happy About Marrone Bio’s New Killer Product!

“MBI-014”

There’s money in weed control. And farmers worldwide desperately need an alternative to glyphosate, the active ingredient in Monsanto’s Roundup weed killer. In addition to significant health concerns (glyphosate has been banned in 23 countries, including Canada) and ongoing cancer litigation, Roundup’s overuse has caused weeds to develop a resistance – and the resistance is spreading.

Regarding MBI-014, “Farmers are waiting for it,” said Pam Marrone (you can tell she’s excited about this one!). The company’s non-chemical alternative to killing weeds is nearly ready to be submitted to the EPA.

If and when MBI-014 is approved, the time frame would be late 2018 or 2019, that catalyst alone could push MBII up to $3 or more! Farmers worldwide would want to begin using MBI-014 immediately to solve their weed problems (Roundup is a $5 billion product, so Monsanto won’t be too happy about scrappy little Marrone Bio).

When you compare the two, chemicals vs. biopesticides, I can see which business I’d rather be in.

By the way, Marrone Bio has a strong patent portfolio (+400 issued and pending) protecting its various product chemistries, mixtures, and formulations.

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*Author has a long position in Marrone Bio

DISCLAIMER: The information in this publication is not intended to be, nor shall constitute, an offer to sell or solicit any offer to buy any security. The information presented on this website is subject to change without notice, and neither Penny Stock Experts nor its affiliates assume any responsibility to update this information. Additionally, it is not intended to be a complete description of the securities, markets, or developments referred to in the material. Penny Stock Experts and its Author(s) cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. Additionally, Penny Stock Experts and its Author(s) in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned. Furthermore, Penny Stock Experts and its Author(s) accept no liability whatsoever for any direct or consequential loss arising from any use of our product, website, or other content. The reader bears responsibility for his/her own investment research and decisions and should seek the advice of a qualified investment advisor and investigate and fully understand any and all risks before investing. Information and statistical data contained in this website were obtained or derived from sources believed to be reliable. However, Penny Stock Experts and its Author(s) do not represent that any such information, opinion or statistical data is accurate or complete and should not be relied upon as such. This publication may provide addresses of, or contain hyperlinks to, Internet websites, Penny Stock Experts takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the convenience and information of this website’s users, and the content of linked third-party websites is not in any way incorporated into this website. Those who choose to access such third-party websites or follow such hyperlinks do so at their own risk. The publisher, owner, writer or their affiliates may own securities of companies mentioned in this publication.

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Regarding “volume preceding price”, this MBII chart makes for another great example.

Look how the stock comes back to kiss that 90-cent support line following a gap higher on volume the month before. Just lovely, isn’t it? Now that MBII has shaken out the weak hands, a strong floor is in place and I suspect that floor will support much higher prices in 2018.

A close above $1.25 would represent a 6-month breakout for MBII.

After that there’s minor resistance at $1.50 and $2.

With the wind at its back, this is the type of stock that could fly toward $4 in a hurry.

3 Reasons Marrone Bio Should Keep Growing Higher!

1. Debt was a real concern for Marrone Bio, bankruptcy wasn’t out of the realm of possibilities – but that was then. On December 18 the company concluded a comprehensive financing and debt restructuring transaction. Lenders converted $35 million worth of notes into stock at $1.75 per share. Marrone Bio’s financial position has taken a 180 degree turn over the past month.

1. Marijuana! Government’s across the land are legalizing it, and given the deficits they’re running I don’t see that trend changing, only quickening. California is the most recent, and CEO Pam Marrone has helped numerous states, such as California, craft guidelines on what pesticides and fertilizers are safe for growers to be using.

1. Organic! It’s all about organic food (and organic marijuana). And you can’t label a food product “organic” unless it’s been grown without chemicals. Marrone Bio is an emerging supplier of non-chemical pesticides and fertilizers.

Here’s a powerful illustration showing why many people may prefer being in the “biopesticides” business as opposed to the agricultural chemicals business over the coming years.

Restructuring matters, converting debt into equity was a huge positive for Marrone Bio (and a huge vote of confidence by the lenders!).

MBII is heading a lot higher from here.

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*Daniel has a long position in MBII

DISCLAIMER: The information in this publication is not intended to be, nor shall constitute, an offer to sell or solicit any offer to buy any security. The information presented on this website is subject to change without notice, and neither Penny Stock Experts nor its affiliates assume any responsibility to update this information. Additionally, it is not intended to be a complete description of the securities, markets, or developments referred to in the material. Penny Stock Experts and its Author(s) cannot and do not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. Additionally, Penny Stock Experts and its Author(s) in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned. Furthermore, Penny Stock Experts and its Author(s) accept no liability whatsoever for any direct or consequential loss arising from any use of our product, website, or other content. The reader bears responsibility for his/her own investment research and decisions and should seek the advice of a qualified investment advisor and investigate and fully understand any and all risks before investing. Information and statistical data contained in this website were obtained or derived from sources believed to be reliable. However, Penny Stock Experts and its Author(s) do not represent that any such information, opinion or statistical data is accurate or complete and should not be relied upon as such. This publication may provide addresses of, or contain hyperlinks to, Internet websites, Penny Stock Experts takes no responsibility for the contents thereof. Each such address or hyperlink is provided solely for the convenience and information of this website’s users, and the content of linked third-party websites is not in any way incorporated into this website. Those who choose to access such third-party websites or follow such hyperlinks do so at their own risk. The publisher, owner, writer or their affiliates may own securities of companies mentioned in this publication.

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