Chris…why are you expecting a significant decline and what do you mean…"I would take this fat pitch?
Looking over Village Farms investor presentations. I see the cost of production, the conservative sales price and conservative market estimates.
When I put a pencil to it, I get a value for the company in 2020 or 2021 of about 40 dollars a share. (Yours or anyone elses may be different. Please note: I am a terrible investor. If you are considering this high risk company, do your own analysis.)
As I have been invested in this company for at least 7 years. (I do not remember when I bought the stock, but came across the company in 2004.) I have confidence that the management is trust worthy and has the people to execute.
However, they have just borrowed a lot of money to refurbish the grow facilities. There is no production from these facilities. Worse, (for the numbers) the facility was producing vegatables. This production is off line. The year over year cash flow from
operations will be down, and the company will swing to huge loss this year and quarter and they will show a very large and unmanagable debt based on the current business.
When these numbers hit, I expect a significant decline in the very low volume stock.
For really small players it will be a chance to load up cheap. Any significant purchases will immediately dry up the float.
I do not remember why now, but 4 dollars a share seems to be where I think support will show up. I do not think that the opportunity will last. The time may be as short as extended trading hours, or three days.
I consider this a “fat pitch” because we have a very good idea of the future value of the company. It is not smoke and mirrors. What makes it really easy, we know its coming! We know that the computer algorithms will pick up on the numbers and write auto generated headlines. We know that the float is small. We know that this increases volatility. And we know exactly when the news will break. Its almost like T-Ball. Also, I don’t know, but I believe there is no options trading on this company. There are no futures to smooth price moves out.
Take your dramamine, there are no life jackets and no life boats on this ship!
Cheers
Qazulight