Future Farm Technologies Inc (OTCMKTS:FFRMF) just broke out of a lateral basing range to close out last week. The company is an interesting case, as both an equipment supplier and grower. The company’s operations have become more focused on the equipment supply track of late, which has energized shares. At some point, in every gold rush, the pick and shovel salesmen start to outgain the miners. Continuation higher in this stock’s breakout might serve as some kind of a signal for the space. It’s certainly something to watch for.
In terms of recent communications from management, the company just announced that its LED Canada division has made “significant progress in the past quarter”. According to the release, among other details, the LED Showroom buildout is now “complete and fully operational”, which management suggests is something that will allow for “cost savings from a vertically integrated warehouse and showroom”. This last point should be taken at face value and likely is a big part of why the stock powered higher to close out last week’s action.
Future Farm Technologies Inc (OTCMKTS:FFRMF) bills itself as a company that is rapidly becoming a leading indoor plant growth technology player specializing in LED lighting and vertical farming solutions.
Future Farm’s business model includes developing and acquiring technologies that will further its position as a leader in the evolving Controlled Environment Agriculture (CEA) market for the global production of various types of plants.
The Company holds a worldwide license to use a patented vertical farming technology that, when compared to traditional plant production methods, generate yields up to 10 times greater per square foot of land. The contained system provides many other benefits including seed to sale security, scalability, consistency due to year-round production, cost control, product safety and purity by eliminating environmental variability.
According to company materials, “The Company’s business model includes developing and acquiring technologies that will position it as a leader in the evolution of Controlled Environment Agriculture (CEA) for the global production of various types of plants. Future Farm provides scalable, indoor CEA systems that utilize minimal land, water and energy regardless of climate, location or time of year and are customized to grow an abundance of crops close to consumers, therefore minimizing food miles and its impact to the environment. The Company holds an exclusive, worldwide license to use a patented vertical farming technology that, when compared to traditional plant production methods, generate yields up to 10 times greater per square foot of land. The contained system provides many other benefits including seed to sale security, scalability, consistency due to year-round production, cost control, product safety and purity by eliminating environmental variability”
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As noted above, after harvesting its own growing operation a couple months ago, the company has returned to a strong focus on supplying the picks and shovels, so to speak. The latest release from the company outlines a number of steps that have reignited the stock’s upward momentum:
“Demand is increasing for LED Canada’s award-winning Scorpion grow light as more licensed growers complete testing. A licensed producer in the USA was able to secure a rebate from its public power supplier for its use of LED Canada Scorpion grow lights, paving the way for savings and large LED purchase orders. Peking University has been using LED Canada grow lights and has shown that they produce the highest yields versus other grow lights tested. LED Canada is in the final stages of providing a quote on its LEDs for the previously announced Mobile, AL farm and another farm in development in Massachusetts. Each vertical farm would require 9,000 8-foot LED lamps, which would represent a multi-million-dollar purchase order for each project.”
Traders should note that increased volume in this stock could be of heightened importance due to the tight float size in play (fewer than 16M shares). The appearance of upward momentum in combination with a jump in average daily transaction volume in a stock with a restricted float can unleash fireworks as supply is squeezed.
At this time, carrying a capital value in the market of $26.1M, FFRMF has a reserve ($217K) of cash on the books, which compares with virtually no total current liabilities. FFRMF is pulling in trailing 12-month revenues of $269K. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 86.1%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $FFRMF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $FFRMF, either long or short, and we have not been compensated for this article.