Village Farms International Is Smoking

As cannabis sales continuing to increase year after year with a potential of the industry hitting $500 billion in the Cannabis Industry, all the stock in it and Village Farms International are smoking…figuratively and literally.

Village Farms International, Inc., together with its subsidiaries, produces, markets, and distributes greenhouse-grown tomatoes, bell peppers, and cucumbers in North America. But in 2017, the company partnered with Emerald Health Therapeutics, a Canada-based, medical-marijuana research company and formed a 50-50 joint venture called Pure Sunfarms with the goal of supplying stores with cannabis products for the recreational market.

In late January, Village Farms International announcement that it applied to get listed on the Nasdaq and in late February. the company moved from the over-the-counter (OTC) exchange to the Nasdaq. Thus, in the course of several weeks, the stock jumped almost 50% on these two announcements.

About two weeks ago, Village Farms International reported its fourth-quarter and full-year 2018 results on Wednesday.  For the quarter, its revenue increased 10% year over year to $40.6 million and net income was $270,000, or $0.01 per share, compared with a net loss of $607,000, or $0.02 per share, in the year-ago period (primarily thanks to Pure Farms). 

Village Farms International plans on converting 3 of their greenhouses for production of cannabis, which will allow the company to produce about 250,000 kilos of marijuana. But that’s down the road. As I mentioned, in the course of several weeks, the stock jumped almost 50% on these two announcements. So the current stock price isn’t justified.

Side Note: I can’t help but to think that this chart reminds me of when the company Riot changed it’s name to Riot Blockchain.

Using data from the Toronto exchange (since the move to the Nasdaq was recent), Village Farms’ short shares have risen from around 600,000 at the end of January to 1.44 million by the end of February.

Source

On back to Village Farms International, despite price forming multiple demand zone on the way up, price is exhausted and the chart suggests price will retracement at least 50%, which would make the $9.60 level a nice entry level to go long

NOTE: price has already hit the daily demand at $12.50 already.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.