VFF CN

Village Farms International Inc

Consumer


Presented:03/19/2019
Price:CA$21.42
Cap:$0.82B
Current Price:CA$8.12
Cap:$0.73B

Presented

Date03/19/2019
PriceCA$21.42
Market Cap$0.82B
Ent Value$0.20B
P/E RatioN/A
Book ValueCA$2.89
Div Yield0%
Shares O/S47.64M
Ave Daily Vol1,577,022
Short IntN/A

Current

PriceCA$8.12
Market Cap$0.73B
Village Farms International, Inc. engages in the management and operation of agricultural greenhouse facilities. It operates through the Canada and U.S. segments. The firm's vegetables are grown hydroponically in a glass enclosed high technology environment using sophisticated computer systems to control irrigation, fertilizers, carbon dioxide, light, temperature, ventilation, humidity and other climatic factors. The company was founded by Michael A. DeGiglio and Albert W. Vanzeyst in November 1990 and is headquartered in Delta, Canada.

Publicly traded companies mentioned herein: Emerald Health Therapeutics Inc (EMH CN), Tilray Inc (TLRY), Village Farms International Inc (VFF CN, VFF)

Highlights

Despite shares of Village Farms (VFF) being up 4x since mid-January 2019 (up 3x since the presenter established a position), its valuation is still attractive, if not cheap. VFF’s legacy business is greenhouse growing, and it has been in the business for decades. Its main US asset is a 5.7MM sq ft produce operation (tomatoes) in West Texas. While this business is challenging at best, VFF’s JV Pure Sunfarms (a British Columbia-based cannabis company) has substantial room for growth. In the presenter’s opinion, given current market dynamics in Canada, VFF has an 18-month runway to reap the benefits before the market becomes oversupplied. At 7x his EBITDA estimate (assumes Pure Sunfarms production of 75,000kg/year), and with optionality on conversion of the TX greenhouse and expanded production in BC, the risk/reward favors bulls.

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