Ventura Cannabis and Wellness Corp CVHIF

TOO CHEAP: Less Than 2x Forward 12 Month EBITDA…

[93Darkhorse93]

I added this week at .125/share following the retracement of the pop of the announcement of the new cost structure.  In which I believe that this focus on the new model is finally the inflection point, and the market hasn’t factored in the EBITDA growth that these cost savings creates.  When the stock retraced the move I had to buy because I think its trading at less than 2x EBITDA and it can’t get much cheaper than that.
 
To think I bought shares this week at a cheaper price then where the stock was prior to the announcement is just ridiculous. I couldn’t pass that up.
 
Here is how I Get there (Open to Commentary…);
 
5M Revenue/Facility/Year = 45M in annualized Revenue (Now that starting in Q1 they will be fully rolled out)

Previous Cost Structure 10% EBITDA Margin = 4,500,000 EBITDA

ADD:
900,000 in Monthly Cost Savings under newly announced cost structure = 10,800,000 EBITDA annually

TOTAL:
45,000,000 Revenue and 15.300,000 EBITDA or a current valuation of 1.8x EBITDA forward 12 month numbers.
 
Put a more Reasonable 6-8x EBITDA Valuation on that gets you to a range of 0.28–0.37 or 0.325/share at the midpoint or more than 170% upside.
 
LONG