Edgewater Foods International, Inc. (EDWT.OB) is the predominant producer of live “in the shell” scallop products in North America.
There are no known direct competitors in the scallop farming business in British Columbia and ISL is the only hatchery producing the Pacific scallop. The Company sells scallop seed to a number of small independent scallop growers who sell their products into the same marketplace; however, production from these growers totals less than 500,000 scallops per year. Five British Columbia joint venture farmers are currently farming scallops and receive scallop seed, technology, and support in an arrangement with ISL.
ISL currently distributes the scallops through specialty wholesalers with particular expertise in selling to restaurants, and has developed a market for whole live scallops that exceeds 5,000 lbs. per week into Vancouver. As distribution is expanded, the Company will continue to focus on specialty wholesalers with strong ties to major restaurants.
ISL, a Vancouver Island aquaculture company, was established in 1989 and for over 15 years has successfully operated a scallop farming and marine hatchery business. ISL’s scallop farms are situated along both the east and west coasts of Vancouver Island. These facilities represent the largest private marine research hatchery and the first fully integrated shellfish producer in Canada.
RedChip initiated coverage of Edgewater Foods International in October 2006 with a Speculative Buy rating and a one-year $4.25 price target, based on a deeply discounted multiple of estimated future earnings. If Edgewater succeeds in increasing its scallop production to targeted levels, the Company could be producing revenues exceeding $52 million and meaningful operating profits within five years.“
Let us hear your thoughts below: