Two Rivers Water & Farming Co (OTCMKTS:TURV) Is A Prime Turnaround Story

The share price of Two Rivers Water & Farming Co (OTCMKTS:TURV) has been recently pushed up after the new quarterly earnings report was released. We could see that the company had been making smart changes, modifying the business model and entering into the marijuana segment. Have a look at the share price reaction, and note the recent jump in volume. 1 year chart for TURVBusinessTwo Rivers Water & Farming Company (OTCQB : TURV) is a Denver based company that is involved in the assembly of water assets by acquiring irrigated farmland with water rights. The company was founded in 2002, and belongs to the consumer goods sector and farm products industry. TURV owns a portfolio of water rights in the Arkansas River Basin in southeastern Colorado. Two rivers own the largest privately held water reservoir. They also operate through Greenhouse and Water segments. As of December 31, 2016, the company owned a total of 7,376 gross acres. It is also involved in the process of developing and leasing the greenhouses to legal cannabis farms. Company Logo (Source: http://www.2riverswater.com/investors/)Recent DevelopmentsOn Mar 7, 2017, Two Rivers announced that GrowCo, Inc. recently completed a capital raise totalling $5,000,000. It also announced that it began a new $2,000,000 capital raise to build the Pueblo campus, including building marijuana infused products, and extraction facilities. We appreciated the news, as it showed that the company has good relations with bankers and the investment community.Additionally, new investments in the growing marijuana industry are always welcomed. We know the sector very well, as we have extensively covered companies operating in the same industry. Good profits are being made as a result of the legalization of some forms of medical marijuana in some states in the US and Canada. Check our articles for more information.Furthermore, on Mar 28, Two Rivers Water & Farming Company announced that it created a separate company that only focuses on its existing and future investments in the water with an initial seed capital of $257,000. The parent company will own 99% of the total stakes.Water related assets represent approximately 64% of the total assets owned by Two Rivers. The company seemed to be refocusing its business model by increasing its exposure to those activities, in which the company has expertise. We appreciated the corporate decision and believe that the market commenced to recognize the management decisions some months later, in August, when the new 10-Q was released.On Jul 12, 2017, Two Rivers Water & Farming Company announced that its affiliate, GrowCo Partners 1, LLC, which owns a 105,000 square foot greenhouse and associated warehouse, began collecting rent from its first marijuana grower tenant. GrowCo Partners leased up to 52,500 square feet of its 105,000 sq.ft greenhouse warehouse on December 1, 2016, with monthly rent payments accruing till June 30, 2017. The market did not react to this news, but we believe that it is very relevant, as the company commenced to receive revenues from its greenhouses. Like always, the market only cared about the money received and preferred to wait until the new 10-Q was released to push up the share price.On Aug 15, 2017, Two Rivers Water & Farming Company released its financial results of past year’s six months ended June 30, 2017. For the first half of 2017, Two Rivers recorded total net revenue of $1.9 million compared to $58,000 for the prior year. Total operating expenses were $825,000 compared to $2.2 million in the prior year which included $910,000 in bad debt from the former tenant of the first greenhouse leased by GrowCo, Inc., a Two Rivers subsidiary. Operating loss from continuing operations was $40,000, an improvement of $2.9 million from the prior year. Loss from discontinued operations for the first half was $1.1 million and preferred shareholder distributions totaled $1.2 million bringing the first half net loss to common shareholders of $2.2 million, a reduction of $2.4 million from the prior year. 1 month chart for TURVCEO, Wayne Harding, stated that "the first and second quarters of 2017 bore fruit from our investment in GrowCo during the last two years". As for the future plan, Harding also stated that “we plan to use our water for local agriculture purposes and will request a change of use for some of the basin water to serve a newly formed local water district with municipal water taps.” Two rivers owns the largest privately held water reservoir and is planning to rehabilitate its reservoir for an estimated cost of $30 to $40 million. Management believes that the rehabilitation of its water reservoir will make them more productive.ConclusionCurrently trading with a market cap of approximately $4 million, TURV is an exciting story among small caps. Management reacted well to the decline of the stock price in the first part of 2017 by focusing on its core activities and increasing investments in high growth segments, such as the marijuana industry. The strategy looks to be working out, as the new 10-Q released in August was largely appreciated. It created an upward trend that made the share price go from $0.25 to $0.60 in less than a month. Will the upward trend continue? If the company keeps releasing news with the same tone, we see no reason why the bull trend should stop. To sum up, keep a close eye on this stock!We will be updating our subscribers as soon as we know more. For the latest updates on TURV, sign up below!Image courtesy of Gaz T via FlickrDisclosure: We have no position in TURV and have not been compensated for this article.