Its time for another write up on a rather unusual asset I found interesting - Paramount Farms (largest Pistachio processor in the world). Although privately held, Paramount Farms seems to have solid underlying assets that have the ability to produce consistent cash flows year in year out. Even though yields for major crops have fluctuated wildly over the past 5 years, I found that Paramount’s ownership of its water bank allows it to maintain the level of its yields in dry and wet years alike. In addition, it processes about 20-24% of the worlds pistachio crop which gives it the market power essentially regulate prices. Finally, the value of its waterbank will likely outdo the value of its orchards as it becomes a crucial player in the billion dollar californian private water market.
The full write up is on my website: