With the recent announcement from Canada Post that there was a potential strike ahead, groans could be heard across the country. Companies sent out emails to customers setting out strategies for bill payments in case of disruption. Imagine the time that it took them to do that. Consumers had to think twice about whether to mail items or wait or make online purchases, and that can be frustrating.
Whether the strike takes place or is averted after talks, the underlying theme is the same. Canadians need a reliable delivery service, one that is not going to force us to make last minute panicked arrangements, or to consider delaying ordering products online.
Enter ParcelPal Technology Inc. (CNSX:PKG), a Vancouver based on-demand delivery service, founded in 1997. In 2015, a launch of the ParcelPal simple-to-use mobile app featuring an on–demand marketplace from which you can order and directly pay for your items from restaurants to alcohol to clothing was announced.
Unlike current conventional delivery methods such as couriers and Canada Post, ParcelPal’s ability to create an instant connection to their network of couriers allows for delivery directly to you in most cases within an hour. In addition, the goods are not limited to be dropped off at your residence or office, where either someone has to be there to sign or they are left on a doorstep, subject to theft. With ParcelPal, the goods can be dropped off at your current location. Imagine that you are at a dinner party and forgot to pick up a bottle of wine. No problem. You just order from the ParcelPal app and the wine is delivered directly to you. These are advantages that standard delivery options do not provide. Given that the local deliveries in Canada are currently valued at $1.8 billion, that is a huge marketplace to be a part of (ParcelPal).
What makes this service exciting as a stock pick is with their innovative approach making their delivery service more attractive and rapid than postal services or most couriers, the potential to expand a satisfied customer base thereby increasing sales is very real. In addition, the company is aggressively seeking to add new in-house team members, as well as strategic partners, to increase and keep up with the growing demand for their services.
In January 2018, it was announced that ParcelPal had signed an agreement with Amazon to provide package delivery to Amazon customers in the Metro Vancouver area, British Columbia, Canada, area. The growth that ParcelPal has experienced has been phenomenal in this division, with a delivery rate of approximately 500,000 packages since January 2018 achieving gold status as an Amazon provider. (
https://www.parcelpal.com/2018/01/23/parcelpal-signs-amazon-contract/). Ensuing expansion will include Alberta and the service will continue to grow throughout the country.
Further adding to the excitement is that it was just announced that ParcelPal has signed an agreement with Vancouver, BC based Choom Holdings, Inc, ("Choom") (CSE:C HOO) (OTC: CHOOF) a leading Canadian cannabis retailer. (Markets Insider: September 27, 2018: Article: ParcelPal Signs Agreement for Marijuana Distribution With Choom Holdings Inc.)
This agreement, holding the potential to be very lucrative as the marijuana market approaches legalization, applies across Canada. As President and CEO of ParcelPal, Kelly Abbott, states, “Our contemplation is to be the Uber of cannabis for Canada and grow our revenues exponentially through this vertical. Our innovative technology enables seamless integration with any retail outlet for cannabis.”
Currently PKG stock is hovering around the high .30’s to low .40’s. The stock has a 52 week low of .0600 shooting up to a 52 week high of .54 representing a 900% increase in a one year period
(https://www.barchart.com/stocks/quotes/PKG.CN). Although the stock dropped after reaching the high of .54, the current range as of October 2, 2018, still represents an approximately 600-700% increase within a short time frame.
On August 30, 2018, ParcelPal Technology Inc. Reported Unaudited Consolidated Earnings Results for the Second Quarter and Six Months Ended June 30, 2018. For the quarter, the company reported gross revenue of CAD 770,022. EBITDA was increased 8.2% over the fourth quarter ended December 31, 2017. Net loss was CAD 754,096 in part due to non-cash related expenses of CAD 181,558 in Share-based compensation and amortization of CAD 134,311. For the six months, the company reported gross profits of CAD 371,953, representing a gross profit margin of 27%. (Bloomberg News: September 27, 2018: Company Overview of ParcelPal Technology Inc.)
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=236626727 Not too bad for a start-up. While as a smaller company with a market capitalization of CA$26.8 million, (Yahoo Finance: September 18, 2018: What Does ParcelPal Technology Inc’s (CNSX:PKG) Ownership Structure Look Like?),
https://ca.finance.yahoo.com/news/does-parcelpal-technology-inc-cnsx-180218886.html it may still be flying under the radar of many institutional investors, it is a company to keep under consideration.
And if you understand the appeal of an on-demand, time-sensitive, straight-to-you delivery service and the potential for growth, given that the stock already within a short time frame rose 900% from its’ initial offering, then you can understand the long-term potential of ParcelPal.
Happy Investing!
Dr. Kal Kotecha
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