7 Best Vertical Farming and Hydroponic Stocks to Buy

2. Village Farms International, Inc. (NASDAQ:VFF)

Number of Hedge Fund Holders: 7

Village Farms International, Inc. (NASDAQ:VFF) stands as one of North America’s leading growers, marketers, and distributors of top-quality, greenhouse-grown fruits and vegetables. The company’s farmers harvest crops by hand every day from eco-friendly, soil-less glass greenhouses, ensuring that the highest food safety standards are maintained throughout the process.

In Q2 2024, Village Farms International, Inc. (NASDAQ:VFF) reported net sales of $92.2 million compared to $77.2 million in the same quarter last year. The Canadian cannabis segment saw strong growth, driven by market share gains in flower, pre-roll, and milled products, thanks to high-quality cultivation and new launches. VF Fresh produce sales increased by 7%, with a 21% boost from expanded greenhouse planting.

However, the company’s U.S. cannabis sales declined due to competition from unregulated hemp-derived products. Gross profit dropped 20%, and it reported a net loss of $23.5 million, mainly due to a non-cash impairment in the U.S. cannabis business and pricing pressure in fresh produce.

Despite this, Village Farms International, Inc. (NASDAQ:VFF) demonstrated solid liquidity, generating $5.7 million in cash flow from operations and reducing its cannabis inventory by 30% since the end of last year. The company ended Q2 with $29.7 million in cash and a manageable net debt of $18.7 million.

On July 15, Village Farms International, Inc. (NASDAQ:VFF) submitted a formal request to the DEA, urging the rescheduling of cannabis to enable more comprehensive research on its medical benefits and risks. The company believes this move is crucial to developing a well-regulated cannabis industry and unlocking its potential for health and economic growth.

The slight 0.10% dip in the company’s price over the past month can be attributed to short-term volatility, likely influenced by challenges in the U.S. cannabis market and pricing pressures in the fresh produce segment. However, the 26.46% YTD upsurge reflects investor confidence in the company’s strong growth in Canadian cannabis sales, improved cash flow, and expanding international cannabis operations.

The company’s strategic focus on key markets and operational efficiencies has bolstered its long-term growth outlook, with analysts projecting an upside potential of 20.12%. As of Q2 2024, seven hedge funds, holding a combined investment of $1.9 million, are bullish on the stock, according to Insider Monkey’s database. This helped VFF earn a spot on our list of the best agriculture stocks to buy now.