LG Fundamentals behind the stock
Lets figure this out once and for all on the price forecast for LG.v
All numbers used in this forecast will be gathered from www.lgc-capital.com and using the corporate presentation.
LG.v expects their first cycle to be 7,000 kg of marijuana with a cost of production of $1.1 per gram and a selling price of $5 per gram (low end price in the market)
7,000 *2.2 = 15,400 pounds *545.45 = 8,399,930 grams
Cost of goods produced is 8,399,930*1.1 = $9,239,923
Revenue= 8,399,930*5 = $41,999,650
Profit of $32,759,727 minus the cost of management
So lets say $30,000,000 profit after all other costs of operating the business
This is just in the first cycle of growing!
The time to grow the Marijuana will take between 6 weeks for the veg cycle and 8.5
Weeks for the budding cycle. So 14.5 weeks or about 3.5 months
Now we do Cycle 2 will take 8.5 weeks until the budding is completed as the new plants have had time to Veg before the next cycle.
19,000*2.2= 41,800 pounds *545.45 = 22,799,810 grams
Cost of goods produced is 22,799,810*1.1= $25,079,791
Revenue= 22,799,810*5= $113,999,050
Profit of $88,919,259 minus the cost of management
So lets say $85,000,000 profit after all other costs of operating the business
Now these cycles come every 8.5 weeks so max turnaround is 2.5 months therefore you can achieve about 5 cycles per year
With the first cycle being profit of $30,000,000 then the second cycle bringing in $85,000,000 profit, then most likely get two more growth cycles of $85,000,000 each. Once the first growing cycle begins the year will achieve a profit of $285,000,000 with years followed with on average of $425,000,000 in profits for the whole company!
Now LGC owns 60% of the company so we take the $425,000,000 *.6 = $255,500,000 profit per year!
If you take a conservative estimate of trading at 8x earnings you have a market cap of $2,040,000,000/ 343,003,989 (fully diluted amount of shares outstanding) gives us a conservative share price of $5.94 per share!