A little Shrimp Saturday fun math with F&T numbers:
All the info below is based upon numbers gathered from personal/other’s DD along with some assumptions.
300,000 lbs per year/per facility is the low end of harvest #s based upon 44-50% survival rates.
Net profitability to SHMP per lb is conservatively $5.
Each facility would therefore have a net profit of $1.5 million
An eps (earnings per share) would be roughly .005 and with a food production industry norm P/E of around 20 SHMP should be valued at .11. Now this is with only 1 facility in production. Multiple that by 4 or 5 facilities and you can see the valuation increase.
This also doesn’t factor in the value of the patent, other income arrived from the production of other aquatic species of which SHMP gets 50%, licensing deals, etc.
Now lets have some fun and factor in the increased survival rates SHMP has achieved. So instead of 300,000 lbs per facility let’s increase that to 500,000 lbs per facility.
Net profitability to SHMP per lb stays at $5.
Each facility would therefore have a net profit of $2.5 million
An eps would be roughly .009 and with the same 20 P/E ratio SHMP would be valued at .186. Again this is with only 1 facility. Multiple that by 4 or 5 facilities and you can see SHMP pushing $1.00 per share.
This ladies and gentlemen is why people are so excited for this stock. SHMP and F&T are sitting on a gold mine. With the food industry going through a ‘clean’ revolution (know where your food came from, what is in it, etc) it wouldn’t surprise any of us following SHMP to see a multiple dollar buy out in the next few months.
There is just too much money to be made and markets to be cornered with this technology. One of the ‘big boys’ with this technology could put their competitors completely out of the shrimp business.
The technology of SHMP is akin to the technology Intel possessed at the beginning of the chip processor revolution. SHMP can be to the aquaculture industry what Intel was to the computer industry.
Happy Shrimp Saturday...
