VFF

Village Farms ($VFF) CEO's Dramatic Reversal: Heavy Buying After Prior Selling as Stock Surges 142% From Lows Amid Cannabis Pivot

05/22/2025 00:08

Village Farms International ($VFF) CEO Michael Degiglio has made a significant insider purchase in mid-May 2025, signaling a striking reversal from his substantial selling activity last September. Degiglio acquired a total of 45,000 shares worth approximately $49,687 over three days between May 16-20, at an average price of about $1.10 per share. His largest purchase came on May 20, when he bought 30,000 shares at $1.14 each. This buying spree comes roughly eight months after he sold 408,779 shares (worth about $410,357) at an average price of $1.00 in September 2024. The timing of these purchases coincides with $VFF's remarkable recovery from April lows of $0.48. The stock surged 37% from $0.70 to $0.96 on May 13 following earnings, and has continued climbing to $1.09 as of May 20, representing a 142% increase from its 52-week low of $0.45. Village Farms is currently undergoing a significant strategic transformation. The company is finalizing a transaction this quarter to spin off its fresh produce business into a new joint venture called Vanguard Food LP. This deal will provide Village Farms with $40 million in cash while maintaining a 37.9% equity stake, allowing it to focus resources on its higher-growth cannabis operations. However, financial challenges persist. In its Q1 2025 results released on May 12, the company reported a loss of $0.06 per share, worse than analyst expectations of a $0.01 loss. Revenue declined 1.3% year-over-year to $77.07 million. Despite these headline numbers, the company's Canadian cannabis segment showed improved profitability, and international medical cannabis exports grew 285% compared to the previous year. Degiglio's substantial purchase may indicate his belief that the stock had become undervalued after its decline, and demonstrates management's confidence in the ongoing strategic pivot. Valuation metrics support this view, with Village Farms trading at just 0.36 times sales and 0.49 times book value, well below industry averages of 1.0-2.0 times sales and 1.5-3.0 times book value. Analysts maintain an average rating of 'buy' for Village Farms, with a median 12-month price target of $2.00, suggesting approximately 83% upside from current levels. However, near-term forecasts are mixed, with revenue projected to decline 21.59% in 2025 and 18.22% in 2026 as the company transitions its business model. Village Farms is pursuing growth initiatives including expansion into European markets via its Netherlands operations, aiming to triple international medical cannabis exports in 2025, and planning to quintuple production capacity by Q1 2026. The company also faces a deadline to regain compliance with Nasdaq minimum bid price requirements by October 2025. The recent stock surge and CEO buying activity could mark a turning point for Village Farms. However, continued losses and projected revenue declines remain challenges to overcome. The success of the company's strategic shift to focus on cannabis after divesting its produce business will be the key determinant of its future stock trajectory.

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