I mentioned Village Farms a while back. It was trading OTC at the time. it is now listed the symbol is VFF.
It was at 17, down to 12.
A year ago, with the share count from a year ago, based on the business a year ago, I valued it at 40 a share or more.
Today they have expanded their market. I will have to re-evaluate. However at first glance I think my target is conservative.
I hope to be able to soon.
Cheers
Qazulight
Wow, it is up from $13 to $14 just since this post was made.
This board seems to have some actual, market-moving power.
To move this post more towards being on-topic, here is the revenue profile (in thousands) for Village Farms.
2014 2015 2016 2017 2018
Total Revenue 136,615 141,934 155,502 158,406 150,000
Recognizing off-hand that October 2018 was when Canada legalized MJ, is that the primary impetus for thinking that that prior revenue trend will be shifted towards accelerating growth?
The share price appreciation from the beginning of January is insane for this one, going from under $5 to around $14.21 at the time of this posting.
volfan84
no VFF position
Hi Qazulight,
Is Village Farms an actual growth stock? They’ve grown revenue from $142mln in 2015 to a whopping $150mln in 2018 (5.7%).
It would be more helpful to share with the board why we should take interest in the company rather than posts about the stock price movement.
Today they have expanded their market.
How come you do not explain why they have expanded their market, or to what?
I hope it is not a marijuana play as Saul has already mentioned it is off-topic for this board.
From the Monday Morning Rules Post:
Repeated posts of what long lists of stocks have done in the past week don’t belong. Basic investing questions like “What does EV/S ratio mean?” should simply be googled, rather than filling up the board. Portfolio management is not a subject for this board, and questions about it should be answered off-board if at all. We have to rule out crypto-currencies and marijuana stocks as most of them are simple speculations and if we open the door to one or two we’ll be deluged with speculative stocks, which is not what our board is about. One-line posts rarely add anything significant to a stock discussion but fill up the board.
Thanks for your cooperation,
Matt
It would be more helpful to share with the board why we should take interest in the company rather than posts about the stock price movement.
Today they have expanded their market. I will have to re-evaluate. However at first glance I think my target is conservative.
I hope to be able to soon
I stated that explanation is my intention. However I am very busy at the movement.
Today Village Farms is company run by seasoned management with a proven technology that has proven they can operate in a low margin environment.
It has dramatically increases its TAM and margins by moving into Cannabis production in Canada by converting existing facilities there.
My evaluation, now a year old valued the Texas facilities at zero, and all of the current vegetable production at zero. Further more the analysis was based on the margins for Cannabis production dropping significantly from where they were then.
Recent changes to the U.S. farm bill has made hemp production legal. The recent legislation in Texas made hemp production for the production of CBD oils legal.
So, right now, until I listen to the investor calls and review the applicable laws I cannot put a value on the Texas production houses.
That is my intention.
However, right now I will give you a bunch of opinions. Not that they are worth much.
This is a company with technological know how in hydroponic gardening and has been making a profit in a low margin business for better than a quarter century.
This is a company that is vertically integrated via their partnership with Puresun farms.
This is a company that has seen its margins dramatically improved by its partnership with Puresun farms.
This is a company that has seen it TAM dramatically increases by the legalization of recreational use of THC in Canada.
This is a company that just saw its TAM for CBD oils go up by a factor of 12 with the new farm bill (?) and the nee legislation in Texas.
? The last may be incorrect. They may only be able to market CBD oils in Texas. If so the TAM for CBD oils only doubled.
Finally, because of the structure of the company they can operate in the regulated banking industry and have access to the U.S. Equity markets.
If agents broke int the Texas green house, killed half the staff and arrested the other half then bull dozed the houses, the market value of the company based on last years analysis would still be 40 dollars a share.
I will work up the numbers as soon as I can. I need to as this company now represents 14 percent of one of my portfolios and that is very close to a “trim it a little” position for me.
Cheers
Qazulight (A Makersmark man myself)
My grandfather had a gladiola farm and I don’t see how it is much different. It was a piece of land he had to pay for, paid employees, paid to fertilize, paid to ship etc. He made a living, but there was a limit to how much he could earn per acre. There was no real barrier to entry. If he wanted to double his prices, buyers would go elsewhere. If the market was willing to pay double for all flowers for some reason, he would have gotten a loan and bought more land, or someone else would have. Eventually, at a nice old age, flowers from South America put him out of business, but he was able to sell his waterfront land to a developer and have enough money to live comfortably in retirement. But how is VFF different? They grow tomatoes and MJ. When MJ is fully legalized, why won’t every corn farmer switch to it? Why won’t every person grow a plant in their closet? Why won’t NAFTA let Mexico import it? If it is so great, why are they still growing tomatoes? Sell that American farmland and by more in Canada?
I just don’t see the potential beyond speculation.
Pete, who remembers Q from the old days on the rat’s board.
VFF will be in a commodity business before it is over. This is a fact that VFF puts out in its investor presentations.
The difference between VFF and your Grandfather is that they have a technology that allows them to grow tomatoes in the desert and compete with imports.
The problem VFF has faced was struggling to win with limited capital and slim margins. Note: I invested a very small sum at under a dollar a share over ten years ago. I did this because of their technology, not their business, very un-Saul of me.
On the other hand my analysis last year was very Saul like and revealed a company that probably will reach a quiescent state with a P/E of 10 paying a dividend of 4 or 5 percent. That company would only be selling in Canada and making most of its money in Canada.
This will be my last post in this for a while. We are losing a man at work and my territory will be doubled for a few months and I really need to catch up on these and others earnings reports.
I just mentioned it the other day for those interested because I thought at 12 and change it was on a blue light special.
Cheers
Qazulight