Supreme Cannabis Company Inc. (The) T.FIRE

Fair Value - Supreme

[johnale]

Average Valuation of LPs is 8xCY2021 EV/Sales. Canopy/Cronos >18-21x. OGI trading at 13x! 

Even at 7.1x EV. (Avg before run up) 

770 o/s fully diluted with full deb conversion.

7.1xCY2021E ~ 80mil (7% growth/q) =EV568mil

 

Implied Market Cap - 553mil (net of debt) 

 

Implied valuation 553/770 = .72cents 

 

That’s just to be at a DISCOUNT to peer valuations TODAY - assuming minimal growth from q2 which If we know beena goldenberg - she will probably beat.

[Pedal2themetal7]

It had been a while since I reviewed other companies financials, so I decided to deep dive into 7 of the supposedly superior companies, and at the moment I'm happy with my choice of being with Supreme. Numerous companies are only at their level because of deep pockets and not performance. Some of them have dug themselves a deep hole and the future looks pretty grim.  If Beena keeps

[johnale]

Abdolutely-  Here is up to date EV/revenue multiples (takes debt/cash position into considration) as of Friday - for last Q annualized. (From Todd Harrison Twitter)  Canopy - 36x  Tilray/Aphria - 41x Cronos - 74x  Sundial - 70x Aurora - 12x village Farms - 19x  Hexo - 11x  Organigram - 15x  Supreme Cannabis today - 4x !!!!!!!  it's INSANITY

[Pedal2themetal7]

It's insane, especially when Supreme's revenues will probably beat Sundial, and seriously closing the gap on Cronos. The overall balance sheet of Supreme is already superior compared to numerous apparently leaders, and if Beena continues on this trajectory,the next 2/3 years should be interesting.  IMHO

[Hedgetrimmer]

I've only read the news release in Stockwatch on the Q report. Don't get me wrong, I like FIRE over the competition but one thing bothered me about the report. In it all the financials categories are explained but nothing about the net income loss. Unless I missed something, I worry about transparency and feel Shareholders are owed at least a mention of it, but I'm not a financial

[WealthBuilder99]

I can answer the last point - Supreme's operating cash flow hit break-even in the most recent quarter. They spent about $300k in productivity enhancements (investing activities) and about $2.3m in finance charges, a portion of which is debt paydown (financing activities), therefore total cash flow was approximately negative $2.6m, this was offset by money raised through their ATM program

[Hedgetrimmer]

WB99....much obliged for the civilized answer. I still wish company would have explained it and not let their backers try and figure it out(transparency). Just give us the facts, no need to ignore them IMO. Didn't fool analysts who immediately gave them bad press. Nice to know they could have covered the loss from the cash drawer. All good. Onward & upward.

[theTransporter]

FIRE has upside, or does everyone else have downside? knowing our luck with FIRR, the sector crashes down to 4x, not the other sub around :P

[Aurum1983]

you mean all markets? I don't think anything trades as low as 4x nowadays. I'll be buying more at a steady pace from here on.

[Worldchanges88]

I'm invested with fire but I believe hightide trades at something below 4X. I've been following them as well they're a retail play though so slightly different.

[Aurum1983]

High Tide has some issues and ETF's are rotating out of it.  https://www.solactive.com/update-ordinary-index-rebalancing-in-the-cannabis-index-february-2021/ Horizon will be adding more FIRE this quarter.

[DirtyCadillac69]

Delta9 is only trading at around 1X and they are profitable!

[DirtyCadillac69]

Freshii is below 4X (Frii) and about to report

[OptGreen]

Well I do have to say this is quite a change Ped, I am impressed if....just in what you say here is a very significant part of the FIREstory. This is what separates FIRE from the rest and falls into favour with investment...ACB has been foundering for a while but haven't gone through others to any degree, but would assume you are not far off. Add Beena and team, plus at full production north

[Pedal2themetal7]

For the longest time I've been saying Supreme looks impressive on paper but had always failed to deliver. They finally found a true CEO, it would appear most pieces are in place, still lots of work ahead but the future looks very promising.  I strongly believe 2021 will have a few more ups and downs (Covid etc) but if their at or near full capacity near the end of the year 2022