# SHV - Select Harvests



## Ken (27 October 2006)

SHV are looking at double digit growth with a 63 cent dividends...

the stock looks like a must buy.

Is the sector out of favour at the moment.

they detail in almonds and orchards.


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## watsonc (27 October 2006)

*Re: SHV*

Wouldn't drought be a problem for these guys? Or don't they have water shortages? and thus can cash in on rising prices!


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## TheRage (7 February 2007)

Anyone know why this stock is down 14% at the moment. No announcements, and daily volume was  500,000 compared with average of 19,986   . Seems like some panic selling happening. 

I have been watching this stock for some time and fundamentally this is one solid little gem. ROE consistently around 20 and Net profit margin average around 15%. Shares Outstanding have remained fairly consistent with little growth over a 10 year period giving value to shareholders. At $11.30 dividend yield is approaching 5.5% on last years earnings so if earnings are greater the yield will be even better providing dividend payout ratio is kept the same. I don't normally invest in stocks which can be affected by the weather but given the companies strong management and ability to generate cash and not to mention very little debt I have been tempted. Interim report is not due for another 2 weeks so I am wondering if someone has been leaking some bad news or is this simply a 'put on your shelf stock' that everyone is bored with when there is free money being made elsewhere. Any thoughts?


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## Judd (7 February 2007)

Caught in the tax ruling disallowing upfront tax deductions for agri managed investment schemes from 1 July?


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## GOYCO (10 February 2007)

The question is " how much does this affect the company? and what alternatives are in place to continue growth?" The management have been very soiid in the past, can they come up with something else for the future?

IMO I still think it is a good company, Should still grow at 15% p/a, not bad

cheers


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## michael_selway (11 February 2007)

GOYCO said:
			
		

> The question is " how much does this affect the company? and what alternatives are in place to continue growth?" The management have been very soiid in the past, can they come up with something else for the future?
> 
> IMO I still think it is a good company, Should still grow at 15% p/a, not bad
> 
> cheers




Was there a bad annoucment?

*Earnings and Dividends Forecast (cents per share) 
2006 2007 2008 2009 
EPS 77.9 79.9 93.5 115.0 
DPS 63.0 64.9 72.0 81.0 * 

thx

MS


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## TheRage (11 February 2007)

No bad announcement from the company. As Judd said above the government has abolished up front deduction that all MIS companies were receiving. From what I can understand is that this will impact cashflow but probably not growth.


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## GOYCO (11 February 2007)

Business as usual IMO.will just have to find other ways to finance future plantings etc. Pretty safe for the next 3 years I'd reckon


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## michael_selway (11 February 2007)

GOYCO said:
			
		

> Business as usual IMO.will just have to find other ways to finance future plantings etc. Pretty safe for the next 3 years I'd reckon




What stocks are affected by this new MIS ruling?

SHV, GTP, TIM?

what about FEA?

thx

MS


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## surfingman (22 February 2007)

Anyone watching this stock has had a approx 17% down turn since i have been watching, any ideas on the extent the new taxation laws will effect the companies share price?

I'm considering buying in but have not decided at what level, looks like the company has excellent long term growth.


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## GOYCO (25 February 2007)

Surfingman

As always DYOR. But the usual indicators. P/E ratio. EPS growth. Dividend yield. etc make a fairly compelling case to buy IMO. As far as MIS goes it's highly likely that there will be a transitional arrangement. Also the ATO will have to prove their decision in a court case challenge. Hard to argue that something that has been legal for 30 years is suddenly illegal. Either way it's going to be interesting.

Just my opinion

cheers


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## Brengun (18 September 2007)

For those of you interested SHV has had a low so far today of $8.19. You'd have to be quick though as the company has just announced a buy back of 2.5 million shares at market.


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## brilliantmichael (18 September 2007)

Brengun said:


> For those of you interested SHV has had a low so far today of $8.19. You'd have to be quick though as the company has just announced a buy back of 2.5 million shares at market.




Is that _another_ 2.5 million? Looks like a nice strategy with the stock price falling the way it is. Always liked SHV since it's ratios are excellent, it's cash flow rich, and it looks like there's transparent management. Just wish they gave us a clearer picture of the risks though. 

Looks like the uncertainty over MIS laws, the drought, and the bumper California crop (which will dampen almond prices) are weighing on sentiment, plus the overall market sentiment is dragging on smaller 'unknown' issues - continuing the trend towards "safety" [even at the expense of moving into _overpriced safety IMO_. This one isn't at all risky though IMO (barring weather, climate etc.) due to the quality record, and _long term_ outlook.

PS: Who do you think is dumping?


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## michael_selway (18 September 2007)

brilliantmichael said:


> Is that _another_ 2.5 million? Looks like a nice strategy with the stock price falling the way it is. Always liked SHV since it's ratios are excellent, it's cash flow rich, and it looks like there's transparent management. Just wish they gave us a clearer picture of the risks though.
> 
> Looks like the uncertainty over MIS laws, the drought, and the bumper California crop (which will dampen almond prices) are weighing on sentiment, plus the overall market sentiment is dragging on smaller 'unknown' issues - continuing the trend towards "safety" [even at the expense of moving into _overpriced safety IMO_. This one isn't at all risky though IMO (barring weather, climate etc.) due to the quality record, and _long term_ outlook.
> 
> PS: Who do you think is dumping?




It looks liek not much growth forecast for teh next few years

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 70.8 75.4 70.1 72.1 
DPS 57.0 57.0 57.0 55.0 *

thx

MS


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## brilliantmichael (20 September 2007)

Hi, how low do you think this one will go? This one's a beauty if any of the past record is to go by. Despite drought, MIS tax changes etc, they're still ready to go from 3800 acres to 10000, and have managed to maintain profit flat for the year... Certainly don't know what to do with their excess cash (hence buybacks).

Depth is very shallow. Lots of little sellers, not many buyers at all (except the buy-backs).

Counter-intuitively people are still selling their little parcels in snibbets even as they're being bought back by the company. Is there an institutional sell-off? Maybe not to their taste for "risk profile".

Waiting for a good buy-in time (a hypothetical exercise assuredly), looking at at least a couple of thousand purchases (too little buy-in depth atm). Any thoughts?

-----

PS: IMO "Risk" is unquantifiable, since you cannot use historical inferences to calculate a quantifiable probability into the future (except for predictable, regular things like car accidents or house robberies. Secondly, "future cash flows", a.k.a. "forecasts" are also unreliable, since they involve many factors (macroeonomy, market conditions etc) that are also unquantifiable. Instead, all that can be "predicted" is the resistance and strength of the business to threats (in this case, the climate, water availability, the almond market outlook [which isn't really a threat!], etc etc.) which is admittedly mostly guesswork - But the 'strength' of the business is more or less determinable. A Graham quote: '_You don't have to know the weight of somebody to know he's fat!_' My 2cents


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## Rainmaker2000 (20 September 2007)

Must confess I've been a buyer of select harvests and think today's prices will be a bit of a steal in next few years from a fundamental valuation perspective anyway.......in the shorter term, there are a few volatile factors which should not be underestimated.......1) MIS ruling 2) Supermarkets move to private label.....there's been a whole lot of talk about Select not being affected too much by MIS, which I think is nonsense, they are the key drivers of the current industry framework..Having said that, I think they will thrive post MIS cause its a growth industry and Select has a formidable position..I don't think the stock will rally until it is plainly obvious to the market that Select can do without the current MIS arrangements.....on their intellectual property and branding side, they are suffering with the supermarkets private labelling and competition intensifying, I think this is a limited threat as the supermarkets themselves need someone to do their private labelling....this is something Greens Food had to deal with.......I like the whole sector actually, especially TIM which owns over 10% of Select


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## surfingman (20 September 2007)

Aren't there a large amount of the acreage for Almond orchards on the Murray River Basin?

My biggest concern is the irrigation restrictions and the drought for select harvests future crops, is this also a concern for you rainmaker?


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## niknah (20 September 2007)

Alot of those acres that are going to harvest in the next few years are ones they manage with MIS and only make a commission from.

Agree with the private labels, I've tried their supermarket cereal but prefer the cheaper home brand ones.

I thought it was the bottom when the chairman brought $1mill earlier for $10 but it just drops more.


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## Rainmaker2000 (21 September 2007)

I've been a little concerned about drought with this sector but I've been very surprised with how little the impact has been.... I think its because these 'corporate farmers' as opposed to farmer Joe have a lot of bargaining power and are best practice operators so they usually base their operations on an underground water source or licences......even if drought conditions are permanent, companies like Select will do better than competitors and farmer Joe.....and the whole industry will just pass the 'new' prices onto consumers 

Nickah, are you trying to find the bottom....my understanding is that they have forecast about flat earnings so if its going down as it is, it either indicates the insiders know of a future downgrade or its just cyclical trading....either way, all you can do is put your own value on the thing and I think its worth a lot more than 8$


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## brilliantmichael (21 September 2007)

It looks like a big seller is trying to get rid of their stock - it's just that there ain't a lot of buyers (hardly any depth at all). 

Question:

Is the share price plummetting just because there's a big seller? It wouldn't seem probable that the downward trend would continue so consistently if it were panic/trader selling. In any case SHV is hardly a volatile stock.

Any inside info?


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## niknah (21 September 2007)

Rainmaker2000 said:


> Nickah, are you trying to find the bottom....my understanding is that they have forecast about flat earnings so if its going down as it is, it either indicates the insiders know of a future downgrade or its just cyclical trading....either way, all you can do is put your own value on the thing and I think its worth a lot more than 8$




That's what I thought when I brought them last year for $13.6  




brilliantmichael said:


> Is the share price plummetting just because there's a big seller? It wouldn't seem probable that the downward trend would continue so consistently if it were panic/trader selling. In any case SHV is hardly a volatile stock.
> 
> Any inside info?




That's a good question, they only have about 4 share holders that are large enough to need to announce their changes in holdings, and only 2 of them look like they're funds.

CEOs, Chairman, directors buying is a good inside indicator.


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## Rainmaker2000 (21 September 2007)

I would not worry too much about $13.60..I bought Repco for $2.20 (it bottomed at 60 cents hehe)...Commander round $1.20 and the list could go on ..SHV is probably worth something in that range and unlike the two above, shv actually has a pretty sound business.....even though I do work on the belief that daily market prices are real......To be honest, I think SHV is declining just in light  trade..the market hates uncertainty...and SHV throws off a lot of free cash for dividends and buyback


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## brilliantmichael (21 September 2007)

Rainmaker2000 said:


> I would not worry too much about $13.60..I bought Repco for $2.20 (it bottomed at 60 cents hehe)...Commander round $1.20 and the list could go on ..SHV is probably worth something in that range and unlike the two above, shv actually has a pretty sound business.....even though I do work on the belief that daily market prices are real......To be honest, I think SHV is declining just in light  trade..the market hates uncertainty...and SHV throws off a lot of free cash for dividends and buyback




Wow Rainmaker you really put things in perspective! I hope you have better luck with your other/long term holdings : and I hope your mentioning of Repco and Commander aren't any indication of what the fate of SHV will be!

I'm sure that there will be plenty of other eyes on SHV waiting to snap it up... At the moment it's just being a bit of a wall flower. I doubt it can maintain its previous exponential growth rate - but it is still, from what can be gathered from the financials at least, a very safe long term bet. In every way imaginable it is financially sound (and on the face of it cheap!) by the looks of it. It's just its business model is being called into question atm. Uncertainty is the key. But most great opportunities arise out of uncertainty!

In terms of picking a bottom, your guess is as good as mine, and my guess is as good as person X's - and person X's person Y's and so on (unless an institution is openly selling and indicating how many they've got left to sell ala Commander CDR [btw SHV is an infinitely superior business in accounting terms to CDR!]). Fear/boredom/disgust will weed out the traders... But SHV will make it back someday imo (even at $13 thereabouts for those who bought then!).

Obviously my being so articulate about this one stock highlights something pretty obvious by now! Disclosure: _I now own this stock!_


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## Rainmaker2000 (22 September 2007)

I like to share the freakshows of stocks cause you learn so much more from them.......For example, the buy of Repco and CDR were pretty sound decisions at the time, although not that prudent.. funny as it sounds......Repco is a great retailer which with the gearing was made just too susceptible to short term market conditions...CDR was probably a worse call but not unjustifiable......ironically, I ended up making a few trinkets as I got it on the way up too on Repco and voted against the takeover at 1.75 and CDR, if it remains solvent..hehe it is certainly worth a lot more than 40cents.....hehe....The last two years in the market have been absolutely unbelievable so I don't mind at all chatting about 'slight errors of judgement'..heh


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## Brengun (25 September 2007)

Still appears to be dropping. Is it my imagination or is the fall slowing? There still seems to be more sellers than buyers. Maybe they just want out so they can ride resource stocks up atm.


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## brilliantmichael (25 September 2007)

Brengun said:


> Still appears to be dropping. Is it my imagination or is the fall slowing? There still seems to be more sellers than buyers. Maybe they just want out so they can ride resource stocks up atm.




Big drop today (56 cents).

I suspect it's an institutional/large shareholder sell-off. Possible reasons for bailing out:
- Flat forecasts/drought fears/risk-repricing.
- Portfolio reshuffle to resources, financials etc (as you mentioned)

Plus, the traders who are kicking themselves for not selling sooner/have shorted SHV and are making sure it goes down.

But before you start kicking _your_self, just remember:
- If your strategy was to trade this, well yeah you probably better go kick yourself.
- If your strategy was value-based, and based on the empirical evidence that this issue was decent financially (which is an understatement), and that you bought in at a time of uncertainty, then share price falling shouldn't cause you to really give a damn. You obviously saw value in SHV, so those are based on _your_ terms and not the market's. Remember for fundamental investors, all that matters is at what price to buy in (without the risk of missing the boat).

In all credit to technical players, and a lesson I've learned from this experience is, *the technician's cardinal rule: follow the trend. One lesson I've learned here is not to try to pick the bottom - when the trend flattens you'll have plenty of time to buy in.* At the moment it's all freefall from here (possibly on par recent apocalypses like CDR and RHG).

I started buying in at around $8.62 - could go down to $0.001 for all I know... (Just wish I coulda bought that 15% or so of extra shares if I had just waited 2 weeks!)

When the trend levels out, and it will, should be an interesting opportunity for the cashed-up.

Hope that makes other people feel a little better.

To each his own!


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## brilliantmichael (26 September 2007)

Looks like another brutal day today - opening indicative price around $7 or thereabouts. 

Definitely not a buyer atm

Been in freefall for 4 weeks now, not a flat day.....


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## Rainmaker2000 (26 September 2007)

I would not beat yourself up, I picked a small entry parcel up round high single digits..The recent falls have been quite peculiar, but not too concerning....just further discount to its real value..I'm going to do some more intensive analysis of its financial ratios and some more thorough analysis of its long term performance and drivers of profitablility......I may load up heavily on this baby but only after a few days of research....I'm a big fan of distressed share prices and not so distressed businesses....I wouldn't care about 'picking bottom', it can happen when you least expect it....picking bottom or not does not guarantee an outstanding investment but then it can't hurt either..hehe.....experience tells me that with situations of a declining share price and no business news.....it's often better to wait for the next major news...sure you may lose a little upside on that day but the market rarely prices in annoucements till days and weeks afterwards..eg. once the brokers digest and tell the instos and clients to buy/sell


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## robert toms (26 September 2007)

I have no solid information on this one (or Timbercorp) but heard that these types of companies are buying water on the market ,for up to $2000 a megalitre to ensure the survival of their young plantings.If this is true ,the perception is that it will impact their bottom line.Have Select Harvests informed the market as to how they are performing ?They may have taken all of this into account.


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## Rainmaker2000 (26 September 2007)

I would not doubt they are paying a bit for water.....this drought may be just enough to knock out all the farmer Joes and open the market up to monopoly pricing when conditions return to normal........their market guidance was pretty upbeat in the context but who knows whether they will grow earnings in the next few uncertain years....all I know is they are on a P/E of their last few years earnings of about 10.....and much of that is free cash flow for dividends and buyback...that seems pretty dahn cheap........come to think of it, what incentive does the company have to 'talk itself' up right now......directors are buying in, the companies buying its own stock back from  the 'nervous nellies' like a drunken sailor....why exactly would they want the stock going up?..hehehe ..(as I reach for the option issues)


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## brilliantmichael (26 September 2007)

Rainmaker2000 said:


> I would not doubt they are paying a bit for water.....this drought may be just enough to knock out all the farmer Joes and open the market up to monopoly pricing when conditions return to normal........their market guidance was pretty upbeat in the context but who knows whether they will grow earnings in the next few uncertain years....all I know is they are on a P/E of their last few years earnings of about 10.....and much of that is free cash flow for dividends and buyback...that seems pretty dahn cheap........come to think of it, what incentive does the company have to 'talk itself' up right now......directors are buying in, the companies buying its own stock back from  the 'nervous nellies' like a drunken sailor....why exactly would they want the stock going up?..hehehe ..(as I reach for the option issues)




Hmmm never saw it from that angle.. You know Rain my man you just might be right! 

Your contrarian exhuberance reassures me!


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## brilliantmichael (27 September 2007)

I posted this on a General Chat thread and am just reproducing it here. 

"I do not claim to know much about the agricultural industry, or how the drought is affecting the separate microeconomies in the Murray-Darling. What I can say about SHV (and which anybody can just tell by reading their website) is that they are one of the strongest (financially at least) players in the agricultural sector. But here's the catch: SHV isn't really a farm or produce owner - it's a produce harvester and processor. Timbercorp outsources some of their operations and plantations management to Select Harvests, which is responsible for managing things like logistics and water supply. Plus it has diversified into other 'non-farming' activities like food processing (dried fruit, nuts etc) and food marketing (which is a little out of their depth imo). Of course they're still ultimately based on the survival of the agricultural industry. But they're certainly one of the strongest in my opinion.

More recent factors regarding SHV:
- Director purchases/options exercises recently have been encouraging.
- Share buyback program has been going on for about a year now and has taken more than 1 million shares off the market, leaving the outstanding shares at less than 38 million from last count.
- Share price plummetting > helps buybacks even more.
- Strong dividend record.
- Flat forecasts (short-medium term, due to drought. Longer term more positive)
- Drought won't last forever. And when it breaks, will you be there to catch the wave?

There's my speculative  (Or sales pitch depending on your perspective  )"


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## Rainmaker2000 (27 September 2007)

Just on your post brilliantmichael, its true that shv does just 'commercialise' the assets of others to extent, particularly TIM.......that's probably why I've preferred TIM exposure to date which I'm a little behind on but that was when shv was twise the price!!!  The fact remains that TIM needs SHV and vice versa....and just from memory TIM owns over 10% of SHV so it looks like they will keep working together......Recent price developments are a little surpising as when the MIS rulings first came out, the 'experts' and brokers said SHV would be unaffected because 'almonds will be grown with MIS or not'.......I thought that was a flippant attitude at the time but now it seems like the opposite has happened...TIM has not slid while SHV has lost half its value.......no matter what anyone says, both these companies will be printing substantial amounts of money next year and years to come


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## Brengun (12 October 2007)

Based on a shareprice of $7.11 they are paying dividends of around 8% plus 100% fully franked. My interest rate is 7.69% so I must be in front there somewhere.


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## Rainmaker2000 (12 October 2007)

I just picked up some more of these puppies and will look to get more as news is released.........a profit 'update' for example.....I'm guessing we would get early warning of SHV by tracking TIMs pretty regular sales updates


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## Brengun (12 October 2007)

Rainmaker2000 said:


> I just picked up some more of these puppies and will look to get more as news is released.........a profit 'update' for example.....I'm guessing we would get early warning of SHV by tracking TIMs pretty regular sales updates



LOL, you probably bought the ones I was just thinking of grabbing. Next thing, whoops they are gone already.


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## Rainmaker2000 (12 October 2007)

Sweet, how about, you Brengun and I and maybe we can get BrilliantMichael in our consortium get together to launch a takeover....we'll all keep chipping away individual accumulating below 5% stakes and then we'll ask nicely for some seats on the board......just for info.......I currently hold 0.0001 percent of the company


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## brilliantmichael (12 October 2007)

Rainmaker2000 said:


> Sweet, how about, you Brengun and I and maybe we can get BrilliantMichael in our consortium get together to launch a takeover....we'll all keep chipping away individual accumulating below 5% stakes and then we'll ask nicely for some seats on the board......just for info.......I currently hold 0.0001 percent of the company




Hahaha I wish! If they knew my age... 

At this rate I'm only _"half way" _towards working my way towards being one of the 329 people with 5,001 - 10,000 shares!


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## Rainmaker2000 (13 October 2007)

Who knows, if you keep participating in the DRP and they keep buying their own stock, it's a mathmatical fact that one day 'whatever the light touches' Simba, it will all be yours..........hopefully the polar ice caps don't melt over first........


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## Brengun (13 October 2007)

Rainmaker2000 said:


> Sweet, how about, you Brengun and I and maybe we can get BrilliantMichael in our consortium get together to launch a takeover....we'll all keep chipping away individual accumulating below 5% stakes and then we'll ask nicely for some seats on the board......just for info.......I currently hold 0.0001 percent of the company



Based on your calculations I hold 0.001 percent of the company. Might take a looong time to get to 5% of the company between us.


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## brilliantmichael (15 October 2007)

_"Dear Diary"

Picked up more of her for $6.90. Will she go up, or will she go down? Who knows... If she goes up, good for me. If she goes down, then hope she stays down long enough 'till me next dough/divies arrive. Either way is good. Just don't break my heart babe!

b.m._' :beat:


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## Rainmaker2000 (15 October 2007)

hehe, mate, I have no bloody idea what is tracking the stock price on TIM or SHV, I just know I'm exposed to it...heheh.....I hear all these people jumping for the lifeboats because we have a drought or something.......I have trouble understanding that could be the reason......after all, its freakin farming for crying out loud, yes, when you grow stuff you rely on the weather.......I have another stock ABB which is particularly close to my heart whose stock price rides the rainfall.....for those who know what they are doing, they know that ABB is more like Toll holdings than a rain gauge but still the stock price fluctuates like that....as for this baby, I've set aside a bit of capital and will be looking very closely when the next major news is released........just for info, I notice my favourite investment mag, the Intelligent Investor, has a buy on TIM and SHV so if we are missing something, so are a lot of people....


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## brilliantmichael (16 October 2007)

This might sound silly but does anyone out there know anything about agriculture? I've read almonds are grown in temperate regions such as Spain, Greece, and California. If so how do you think the almond-crop outlook looks like 'down' in Victoria (...yes I'm a Sydneysider )? Do you think they're getting enough water down there? Or is it anybody's guess?

Turkey of all places is also a major grower, and from memory Turkey borders the deserts of the Caucuses. Do almonds still thrive in dry climes?

-----

PS: I hope Selects takes over the Macadamia outfits in Nambucca Valley. Macadamia's rock!


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## Rainmaker2000 (16 October 2007)

Can't really answer your question but suggest you wikipidia it.....seriously, from what I read of SHV's latest report........there is only pretty much one supplier in the World.......that's California which, from memory grows over 80% of the world's almonds....this adds to SHV's business appeal I think cause its obviously a deep export market which much scope for growth with Australia already proving that it can grow these nutritious nuggets of gold efficiently and SHV leading the Aus way....I suspect you can grow anything with the wonders of irrigation


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## Brengun (17 October 2007)

I think they get their wet season in winter in SA. This year wasn't too great, hence lots getting out. There is always next year.


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## Brengun (18 October 2007)

"And they're off!" Up 2.85% today and its only lunch time. Nice so see some green instead of red for a change.


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## greenfs (18 October 2007)

I am looking at  SHV and if anyone gets a moment I would be interested in any opinions.  It has been double its existing price in the last 12 months – before Xmas 06.  

Basic Facts:

About 5 years ago it was around $1.  It is a company resembling RFM but much larger and set up a listed structure.  Its base product is almonds which it grows on behalf of investors and some for its own a/c.  Its aim is to be the biggest almond producer in Aust, if it is not already.  

Cap: $270m 

Share Price: $7.00

Was $11 to $12 – 3 or 4 months ago and over $13 before Xmas 06

Profit after Tax for 06/07 was $28m – up about 6%

February Tax changes did not have a substantial effect on share price

EPS – 70c per share 

DPS – 57c per share FF 

PER – 10 times 

Yield – 8% 

Couple of Directors have bought in at higher prices in the last 6 months

Has bought-back about $15m of shares during the last year?  This should have increased the share’s attractiveness.  Does some work with Timbercorp and may do a majority of its work and plantation in the Mildura area and Darling Murray basin and therefore it may have ongoing water problems, although it seems to be OK this year as long as it can get 80% of its water allocation.  This is probably the main reason for the recent spike downwards of the share price.  

As an initial thought, this share may potentially be an a potential addition based upon the assumption of holding for medium to longer-term gains. I will be doing some more investigation as soon as I can and will update when I have done so.


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## Rainmaker2000 (18 October 2007)

Greenfs....we have pretty much said all our bit about SHV in the first few pages....I'm a proud holder of both TIM and SHV and note that both of them increased 5% today...maybe the market has found out about our consortium which is sitting on our 0.000001 percent stake and 'considering our options'....something fishy is going on in this whole sector and I doubt its publically available info.....you should track the very active thread on GTP which is TIM's competitor as well


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## Brengun (18 October 2007)

LOL I don't think our consortium held much sway in the market.
Up 7.7% now. It has a way to go yet for me. I did get some at $6.90 but my average is $8.57. The first lot I bought in July for $11.06 and chased them down from there.


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## brilliantmichael (18 October 2007)

Dang! We better slip in under the radar so we can slowly build up our 
0.00...01 position _quietly_. Shhhh... Don't want anybody else hearing about it, or our Consortium...

Then once we've gotten our 0.05%, then WHAMO! We'll '_make them an offer they can't refuse_':batman:


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## Brengun (19 October 2007)

Nope, they are definitely on to us. Up another 8.73% today to close at $8.22 unless the snap in a few minutes after closing alters it. 
PS: loved the cool bat BM


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## brilliantmichael (19 October 2007)

Brengun and Rainmaker, not much hope about us building our takeover stakes now  
5% stake,... will you ever come back?


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## Rainmaker2000 (19 October 2007)

I don't know if you guys know any economics but SHV's performance in the last week casts grave, grave doubts on the theory of efficient market pricing..........I cannot believe that those saps at the ASX have not issued a 'please explain' speeding ticket on the way up or down of this price......anyway, its time you guys came clean, who broke the consortium and lodged the offer with the board...seriously, the buys from Wednesday are looking pretty good now....usually stocks go quicker downwards and slowly upwards......here its the opposite....may I suggest that whatever the insider information or issue was, its gone and there is no reason why the price can't break back through $10 unless something really funny is going on


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## Brengun (26 October 2007)

Is there any chance the fires in California have gotten to their almond crops or is it only confined to bushland and houses? Could there be a world almond shortage since Aust is in drought also?


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## Rainmaker2000 (26 October 2007)

hehe, sounds like wishful thinking but I pretty good question...,..I bet Arnie would probably give some corporate welfare to the affected companies anyway so they can flood our market with subsidiced almonds next year.........................a few interesting words in today's AGM release.......apparently, they are have pretty severe water problems but their water rights are the highest you can get so they say...........Of most relevant was the admission that the company will be taking $4 million out pre tax for additional water........that admission might have been nice earlier to explain the falling share price but since that's only about 10% of profit, you would think the dramatic fall has priced in more bad news than that.......they are probably looking at a flat profit next year although not sure if they have admitted such....


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## Brengun (26 October 2007)

Was kind of hoping that since bees don't like smoke, they might go on strike in California and not pollinate the trees. Apparently any honey is so bitter it cannot be used. I was also reading their workers over there are not happy and everyone is working hard for little pay. How long can they stand for it? 

So SHV reckons water is expensive and returns may be down, yet they are buying back their own shares? Their growth pre 2007 has been exceptional for the last 10yrs. 

I am digging in like a tick. Good times will return. I love almonds.


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## Rainmaker2000 (26 October 2007)

Love the analogy or similie should I say.......they are not exactly a capital intensive company so they can afford to buy back even in a bad year...it is a little funny though since their dividend yield is so high as well..........The whole sector is a little perplexing...TIM is sliding downwards without any news.....I probably would prefer if SHV made their business model a little more capital intensive by buying up more company land but I guess this may be their focus once the cheap capital from MIS is gone the way of the dinosaur....yes, a very poor similie, analogy or whatever


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## Rainmaker2000 (27 October 2007)

Hi guys....sorry to fill up the post box...just did a little more analysis....the $4 million before tax, as in 10% of total profit is ONLY for the company owned acres........that is, SHV manages about 35 000 acres (40k next year) and the $4 million dollars is only water for 3300 acres which are companies owned and that's still skimping on water apparently...the 'investors' are responsible for the rest......I can now understand why that question marks the viability of the entire sector at least for this year........that's $1212 dollars an acre extra for water which no investor and financial advisor would 'foresee' when they made the 'investment'........just this year would kill the aenimic 4% return which these guys pray for when they avoid tax.....that is a very interesting development and explains why TIM has been dropping and SHV although I don't see it as such a negative for SHV as there are positive elements of this


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## Rainmaker2000 (2 November 2007)

The Select story gets better and better I think....I've been building my position more of late after the drought announcement and I've been scouring past annual reports and putting the story together...I'm not sure if the drought can get worse for Select since they are only expecting about 15% of their water allocation......I'm pretty bulish on Select at these prices and think its worth about double it current price range.....Today, they've announced an additional on market buyback of almost 10% of the company on market so they obviously think its worth more too.......Apparently, Select is now the world's second largest almond grower and if you believe their rhetoric about Australia having a competitve advantage in Almonds, this could be a significant growth story pitched at a value investers price.


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## drum (5 November 2007)

let it rain!

I bought into SHV the first time around at about $5 and sold at $10ish.  I am thrilled to have re-entered at $7.25.  Damn cheap if you ask me, their future looks bright.


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## Rainmaker2000 (8 November 2007)

For those actively tracking SHV, their business partner TIM releases its yearly report on the 15 November.  I'm hoping for my sake it puts a bullet under TIM's price but it will also provide more guidance on how the drought is hitting the sector, how this years projects are going and how they plan to work with SHV post MIS


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## Rainmaker2000 (17 November 2007)

Interesting week for SHV although its hard to know if TIM result was driving it.....I think its a congratuations to those who bought around $7 cause it looked like you may have picked bottom.....but what do I know, it's just sure good to have over a $1 of paper profits in the hand when you have a high exposure with much more on the offering....

TIM's result was an interesting study, although it was very uncertain on Almond acres and SHV.  Basically, TIM is going into zero investment mode cause they are way, way overgeared after trying to develop as many projects before the end of MIS next year.......TIM is not out of ideas, infact the opposite, they see all blue sky and ventures for investment products in agriculture.....There was very little guidance as to how they will work with SHV and to the contrary, TIM is changing their business model to be closer to SHV in the supply chain

So it does not appear anything is planned after SHV's current 4000 acres development and anything, except for the status quo is possible in the future......for example, TIM is already undertaking a project with their Olive partner, Boundary Bend to grow stuff in Argentina


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## michael_selway (17 November 2007)

Rainmaker2000 said:


> Interesting week for SHV although its hard to know if TIM result was driving it.....I think its a congratuations to those who bought around $7 cause it looked like you may have picked bottom.....but what do I know, it's just sure good to have over a $1 of paper profits in the hand when you have a high exposure with much more on the offering....
> 
> TIM's result was an interesting study, although it was very uncertain on Almond acres and SHV.  Basically, TIM is going into zero investment mode cause they are way, way overgeared after trying to develop as many projects before the end of MIS next year.......TIM is not out of ideas, infact the opposite, they see all blue sky and ventures for investment products in agriculture.....There was very little guidance as to how they will work with SHV and to the contrary, TIM is changing their business model to be closer to SHV in the supply chain
> 
> So it does not appear anything is planned after SHV's current 4000 acres development and anything, except for the status quo is possible in the future......for example, TIM is already undertaking a project with their Olive partner, Boundary Bend to grow stuff in Argentina




It has ok number stills

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 70.8 68.1 62.0 68.4 
DPS 57.0 54.5 50.5 56.0 *



> Business Description
> Select Harvests Ltd (SHV) is involved in the growing, processing, packaging and distribution of almonds, and the manufacturer of chemically-based pesticide products. SHV also provides management services in horticultural, processing and marketing fields. SHV is the largest supplier of packaged nuts in Australian supermarkets.


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## niknah (17 November 2007)

Agriculture exports to China may take off soon like base metals...

http://www.cctv.com/program/bizchina/20071114/101126.shtml



> Food prices were the biggest driver of the accelerating inflation, jumping 17.6 percent from the same period last year.
> 
> Among food items, pork witnessed the biggest increase, shooting up 54.9 percent, while vegetable prices rose 29.9 percent, 17.9 percentage points higher than the previous month. Nonfood items rose 1.1 percent.




Another article about a supermarket stampede...

http://chinaworker.cc/en/content/news/294/


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## Rainmaker2000 (18 November 2007)

Michael, are they Aspect Huntley numbers.  I just find them hard to believe.  I wonder what they base the numbers on.....

Those numbers suggest SHV's earnings will decline for a few years, which is dissimilar to the company's 'growth story'.  Unless they know about future droughts, the decline is difficult to explain.

a) They are currently buying back cheap shares boosting EPS....10% of equity this year after buying back more last year
b) New plantings may decline significantly, but most of their cash comes from management of acres, which increased amazingly last year and will increase this year 
c)  Significantly more almonds means more manufacturing and processing profits
d) It's possible that their future plantings will be as profitable or more profitable post MIS......the company was actually pioneered on company owned land and managing land for private equity

Anyway, I guess its people's perceptions of the future and these types of forecasts which have allowed us to buy this baby for a song


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## brilliantmichael (19 November 2007)

When the government changes, the drought will break and the heavens will burst forth! (according to history) 

(Disclaimer: Sorry this is in no way shape or form supposed to be political)


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## Rainmaker2000 (7 February 2008)

Interesting half yearly from Select

Profit dropped a little more than expected from about 13 to 9 million.  In retrospect, they did pretty well to keep it at 9 mill......management fees were up hugely as expected but they were hammered by:

Temporary water -$2 million
Select orchards hit by drought -$4 million
Food division -$3 million
No new orchards this year cause of MIS $?

A flat result on the above fronts would have led to a massive result

It looks like all those above issues will evaporate pretty quickly:

Hopefully it rains and Select has purchase..hehehe...140% water for next year...not sure how that works...up from the 0ish allocation this year

Food division restructured to bring $3 million a year savings.........2009 WA Orchards.....

The broader growth drivers look on track....so will have to console oneself with the 22 cent dividend and hope for good management execution ahead


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## brilliantmichael (16 March 2008)

Yep still here! Still makes a good case overall imho. Have been accumulating during market downturn. Pros and cons:

Pros:
- Still good economics. Operational cashflow fluctuates due to natural circumstances, but still far outweighs capital requirements (which are proportionately small). May fluctuate from year to year, but POSITIVE nonetheless.
- World growth will continue underpin almond demand.
- Orchards still maturing.
- One-off expenses complete (resturucturing of retail division, water licenses, and purchase of new processing plant).
- Above normal return on equity.

Cons:
- Continuing risks to orchard health due to climate.
- Risk to rising aussie dollar (cyclical)/inflation from production costs competing with mining sector.
- Exposure to other producers (commodity producer).
- Management focused on retail division to "diversify" away from primary production. Please no empire building guys. You already do a great job growing and producing the stuff. Please remember percentage return on equity remains the ultimate measure of success.


Only for the long term minded.


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## Rainmaker2000 (17 March 2008)

Share price does not appear to be going up in short term, but then it has not really been hit by correction as banks have lost about 40% for example....

This is a stock I'm very keen on in the portfolio and I'm looking to free up some more funds if it falls further....I'm more than happy to reinvest dividends also

I really think the rewards far outweigh the risks.....for example, if this year is as bad as it gets, they are still making a good lot of cash while the rest of the industry declines.....I'm happy with their vertical integration with their consumer food business, obviously it should be done as efficiently as possible........eg. one factory not several...

My one concern is if management does not execute what has been promised....mainly the $3 million a year in savings from closing the factory seems a very high number.....just that and no temporary water will add $5 million a year


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## michael_selway (29 April 2008)

Rainmaker2000 said:


> Share price does not appear to be going up in short term, but then it has not really been hit by correction as banks have lost about 40% for example....
> 
> This is a stock I'm very keen on in the portfolio and I'm looking to free up some more funds if it falls further....I'm more than happy to reinvest dividends also
> 
> ...




Hi yep it doesnt look too bad this one, 

*Earnings and Dividends Forecast (cents per share) 
2007 2008 2009 2010 
EPS 70.8 55.2 62.3 70.4 
DPS 57.0 50.0 52.0 57.0 *

Does anyone still own this one?

thx

MS


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## niknah (29 April 2008)

michael_selway said:


> Hi yep it doesnt look too bad this one,
> 
> *Earnings and Dividends Forecast (cents per share)
> 2007 2008 2009 2010
> ...




Yeah, I still own this loser.  
The retail side is no good, I've tried their brands in the supermarket and they're not much better or worse than the in-store white label brands.  They may have only one brand that's doing well, but retail is only a small part of the company.

However food prices are going up around the world, it should be able to do well with the food inflation if it goes up.  There's also alot of trees that will mature in the next few years.


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## Brengun (9 October 2008)

A falling dollar has got to be good news for almond exports atm.
A drop in interest rates on borrowing should be good news also.
More expansion into WA is a plus and they were clever and got their finance before the subprime scare tightened lending markets.

I still hold every single one of my SHV shares. At least they do pay a dividend, unlike other pikers who have declared no divs this year. Fully franked is nice too.


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## knightofsx33 (31 March 2010)

*SHV select harvest*

Hi guys

I have being keeping an eye on this company for over a year now, it is one of my favourite companies because of its great growth prospects, its strong past earnings and also its capable management team. It has all the qualities a great company has and it is also trading right now at a relatively cheap price. Right now it is trading cheap because of some issues involving Timbercorp which went down early last year. Select harvest has being managing Timbercorp's almond division so they were owed management fees. The thing I am confused about right now is that Select Harvest has very strong earnings and also great future prospects, so why is it trading this cheap? Even with the issue of Timbercorp this stock is just too cheap. Just some thoughts.


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## So_Cynical (31 March 2010)

*Re: SHV select harvest*



knightofsx33 said:


> The thing I am confused about right now is that Select Harvest has very strong earnings and also great future prospects, so why is it trading this cheap? Even with the issue of Timbercorp this stock is just too cheap. Just some thoughts.




The MIS industry is dead in the water, sales have pretty much stopped across the board, most of the MIS industry has either fallen over, or had there share prices smashed due to sales being at a stand still....at least that's what ive seen across the industry...are Select still selling plots at pre GFC levels?


Great Southern - Gone
Timbercorp - Gone
Willmott - SP has gone from 1.85 down to 37 cents, divis cut in half. 
Forest Enterprises SP has gone from 75 cents to 4, divis gone, hasn't traded since Feb.
Ark Fund/Rewards group...hasn't traded since Feb, divis gone, doing a recapitalisation.
Gunns - SP has gone from 4.25 to 45 cents, divis cut, MIS sales almost non existent.

Yes Select is trading at a discount, and that's pretty much because the entire industry isn't trading anymore.


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## knightofsx33 (1 April 2010)

yes but look at the future prospects and also its strong earnings despite the GFC, and yes it is making great sales and it didn't need and recapitalization or anything like it. It is just having issues with the Timbercorp's bad debt which only amounts to around 8 mil. It is a great company to have in my opinion. Just some thoughts.


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## rcm617 (1 April 2010)

One of the unknowns with SHV is what management fees it is getting from the new owners of the TIM orchards, I doubt if it would be the same as before. That is where most of their profits came from in the past. The high $A is also providing an impediment to australian agriculture.


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## knightofsx33 (1 April 2010)

yes but now they have transitioned into their own almond production and it has being effective so far, they are also managing ex Timbercop's land for Olam which may not pay as well but should pay a reasonable price. So there is no real issue with the company just market sentiment. Just some thoughts


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## Rainmaker2000 (26 April 2010)

I'm still a very keen holder of these puppies....as you can see from my 'holding history' and my posts......I'm sitting underwater overall but have picked up many tasty morsals around 3 dollars....

I value the stock currently round $7 and suspect it will earn about 55 cents this year.

The water cycle has turned...100% allocations this year....and almond prices too to an extent......but with no help from Aussie $

The new arrangements with Olam should not be adverse if almond fundamentals keep improving........

The bus is a 'natural grower' as the existing trees continue to mature......for example 25% increase in crop harvest this year............the cap ex already made to deal with increased volumes

Couple the 'natural growth' with.........quite an aggressive program of increased leverage.......eg.WA development and increased lease hold........

Select's leverage to a sustained almonds upturn will see quite incredible returns off this base........I think we have already seen the resilience of the bus.....as water supplies and almond prices halved in last four years


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## venger (26 April 2010)

@rainmaker2k,

hope its ok to sort of follow up on your post-

appreciate to see the basis for your valuation that SHV is worth $7?
with a slight margin of safety on current earnings to stay stable (say 10%), with a 50cents earnings, that puts the your valuation at 14 multiples..
which is in the league of the great co's like woolies.. in fact, that's more expensive than QBE.. which can be expected to grow based on its acquisition strategy.

how is SHV going to grow its earnings?.. the headwinds to its long term growth seem to include:
- cyclical exposed to weather, currency risks
- agriculture is capital intensive
- in the commodity business.. price taker, no inflation protection

so, would seem to be a slow grower.. say 3%-5% .. ie, may be multiples of 8-12, which puts it at $4-$6?

would be interested in your reasoning..

cheers,


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## Joe Blow (27 April 2010)

Rainmaker2000 said:


> I value the stock currently round $7




Rainmaker, could you please post the analysis you used to arrive at a figure of approximately $7 per share for SHV.

Many thanks!


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## Rainmaker2000 (27 April 2010)

Wow, threads have become more scientific than my last post....

I see a market average PE pretty appropriate for SHV....current average is round PE 17.......SHV is worth closer to 15 to be conservative

I actually see the greater variation in the cycle, as Venger points out......if 05 conditions existed for SHV today, earnings would be closer to 80-90 cents.....but almond prices are not that high, nor dollar low....nor water(though it is back).....upside risks to $10 or downside to $5 given the cycle......but if earnings were to hit 90 cents, the share price will be closer to $18......but that's all speculation of course

Venger, it's good to follow up posts.......you look like an intelligent investor subscriber to me

Great companies don't trade at PE 14s generally...PE 14 is even well below current market PE...they trade at PE 30s.......Woolies and QBE can't be faulted greatly but they seem pretty mature businesses to me.......

Both QBE and Woolies have negative net tangible assets from memory, whereas SHV has $1.80 from memory.....that tells you something about relative PE

Notice they use the term acquisition a lot.....as in....they've run out of ideas to substantially grow organically.......

Words like 'cyclical', 'capital intensive' get mentioned a lot by Intelligent investor.......

Yes, it's agriculture......I love agriculture cycles...there is a reason to the rythem compared to other cyclicals like mining......

Outside the Intelligent investor, one learns cycles exist in every business to an extent......like the retail business, even insurance....An investors choice is more what cycles they like and can understand.....

Also, 'capital intensive' is made out like its a bad thing in its own right.......it's actually not..........the key to understand though, is how effectively capital is allocated.......and how cap ex compares to deprec/amort on the income statement

As for growth.......well, it does not come much simpler......the trees are in the ground growing.......and the harvest is sheduled to, from memory, more than double in next four years

As Australia's dominant vertically integrated almond company, twise as many almonds kind of guarantees profit growth albeit, they are not resting on their laurals..........this year the harvest will only grow 25% but then water is back up

'Slow grower' is a term I've seen Peter Lynch use......that might describe a a Woolworths or QBE.......but not a company that will harvest 25% more product this year than last.......just like it was more than 30% more almonds last year than year before........But not without risks of course


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## venger (28 April 2010)

Hi rainmaker2k,

apologies, after reading thru your previous post, I'm still not quite sure how you've ended up with $7?

so you reckon that SHV is worth a multiple of 15? but then, with your 55cents earnings, i still not sure how we get to $7 per share? 

>> ...upside risks to $10 or downside to $5 given the cycle

So how did we get to $10 for upside and $5 for downside? Today's price is $4.50. Surely if a storm wipes out half of this years crops, we could be looking at half of forecasted earnings.. wouldn't the downside price be a lot lower? i.e, closer to $2-$3?

>> Yes, it's agriculture......I love agriculture cycles...there is a reason to the rythem compared to other cyclicals like mining......

fair enough that you love the cycles - so what is the reason to the rhythm? and how does that contribute to your valuation of SHV?

>> Both QBE and Woolies have negative net tangible assets from memory, whereas SHV has $1.80 from memory.....that tells you something about relative PE

Ouch, not quite.. QBE has a book value of $10. And Woolies have at least $5 of book value, according to my online broker.
Not quite sure what it should tell me about relative PE 
What does it tell you about relative PE? appreciate to hear your thoughts.

>> that might describe a a Woolworths or QBE.......but not a company that will harvest 25% more product this year than last.......just like it was more than 30% more almonds last year than year before........But not without risks of course

this is puzzling - QBE has averaged a return on equity of 18%+. Woolies? an even more impressive RoE of over 25% for the past decade! They are not simply good businesses... they are great businesses.
SHV has quite a good average return on equity too (about 20%)... but does 30% more almonds mean 30% more earnings? could more almonds on the market mean depressed prices?


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## Rainmaker2000 (28 April 2010)

Dude....I have no idea how the thread reached this tone but its definitely fun...

You should read more intelligent investor newsletters cause you are not doing very well 'freeballing it'

Not sure if you've noticed.......but MR Market's pricing changes on the basis of sentiment and earnings.....and so do I take a subjective view of both those things....no discount cashflow models here....thankfully I have a good sense of value from my history

On "NET TANGIBLE ASSETS".....I don't read the intell investor or follow WOW or QBE so I gave you my last "from memory"

Maybe since you follow them, You should have an accurate clue about their NTA....Is that a good idea or not? What do you think?  In februarie's 'half year reports'........WOW NTA was $1.99 and QBE was $5.16.....Maybe you should give your online broker a call or do some real analysis instead.....

Maybe you should brush up on a statistic that indicates 'growth' cause you lucked out by citing Return on Equity......are you suggesting higher return on equity means higher growth? Is higher ROE good or bad for growth?  Gee, your answer will make my future investing very easy

Your analysis of SHV growth (on the basis of ROE) and almond price dynamics is a little comical......how can Australia or SHV (a single digit of global almond supply) depress prices???

I certainly look forward to selling stock to you at the top of the next boom


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## venger (28 April 2010)

Hi again rainmaker2k,

its a bit sad.. please don't take it personally..

it is still an honest question as to how you do your valuations.. espcially to get to $7 per share for SHV.
Afterall, we are all here to learn from each other.
You seem to have a technique of arriving at quite a precise number of $7... if not discount cash flow, what technique do you use to arrive at $7 per share?

If its a 'subjective' or 'gut feel' number, it think its ok to just say that. Just trying to have it on print for myself and others - can't be too careful these days - there's a lot of stock ramping going on other forums.. especially when some of these holders are underwater and trying to dump their holdings at the expense of others. 

Sorry about the QBE and WOW figures - if you re-read my posts, they were book values - not NTAs. Obviously book value would be expected to be bigger number than NTA , as your numbers have confirmed.
I just wanted to point out (via the bookvalue) that their respective NTAs are unlikely to be NEGATIVE, as your numbers have confirmed - thanks for checking for us.

Sorry again, regarding RoE - I certainly wasn't saying that RoE is the sole performance ratio or even THE measure of 'growth'.  But it does give a quick snapshot of what kind of return an investor is getting for his/her money.
Given the growing population that we now have, we can certainly expect the markets to grow for QBE and woolies - more population means more insurance and groceries required. Challenge for these busineses is to maintain/or even get more market share. And in QBEs case, they have their growing 'foreign' ventures to manage. And woolies is taking on hardware retail. 

With regards to almond growth - again, they were honest questions - what percentage of almond market does SHV have? Presumably, SHV competitors are also cutting costs, increasing supply, etc. Are almond consumers captive to the suppliers? Is SHV a price taker or maker in their industry?
So does an extra 30% crop for SHV mean 30% more earnings, and even higher RoE?
Is there an almond shortage in the world?
How are almond prices set? Is there an almond index to benchmark prices?

You sound like an almond expert - would love to learn more about it.

regards,


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## Rainmaker2000 (30 April 2010)

Dude.......check out the Flight Centre thread in about March last year.......from memory, there was some irritating guy questioning fundamental V charting and why would anyone buy FLT.......it went on for ages.....gees, it can be irritating when people close their minds instead of opening them.....

Oh yeah, I think I admitted to buying stock at that time.......Can you believe I made half a million dollars from one stock......I still have to pinch myself....its surreal......I never actually thought that could happen like that

Mate, I'm just some dude posting a website.....I still work......I still love stocks... You can do your own analysis, but from what you've said, I think you should sell SHV if you own it


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## venger (30 April 2010)

Hi R2K,

It is always nice to hear about forum users making half a mil on a stock (sold after tax?) - provides inspiration for us all... 

that's why it'd great to share our ideas.. and your ideas on SHV is more pertinent, since you've got a vast knowledge on almonds.. we would be nuts if we didn't get in on your next "half a mil" idea!

So do you see SHV as a long term 30% business growth story or is it a speculative story that you feel will hit $7 shortly before dropping down back to its underlying long business value?
If you idea is based on the former, then would think you'd target a much higher NPV.
So assuming it is the latter - a speculation - what would drive it up to $7? 
Do you expect harvest to double this year? Or is the SHV chart showing the way?

cheers,


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## Rainmaker2000 (30 April 2010)

Alas, that was before tax.....even with the 50% CGT, it was too much tax...yet to be paid too

Unfortunately, SHV is not a 500k idea.......I don't speculate generally and when I do.....its in 'special situations' rather than normal market conditions....SHV could go down to $2 and I'd be very happy, assuming fundamentals stayed the same


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## RandR (7 May 2011)

I have just bought a parcel of SHV, I like the company, gives a nice exposure to agri in my portfolio, with an attractive dividend and very nice balance sheet .... + ... i eat a lot of muesli 

Interested to hear if there are other holders out there ? Thoughts on the direction of the company ? Are you in favour of them continuing there policy of acquisitions of new company orchards ... etc.


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## niknah (8 May 2011)

Doesn't look like they're taking on much debt so that's good.  They're one of the few companies to survive the cancelling of the MIS scheme.

I don't think their museli business is doing well, a few years ago they had more than just the Lucky brand but none of the other brands are worth a mention now.  But the Lucky brand is improving.

I saw this almond product recall the other day...
http://www.woolworths.com.au/wps/wc...about+us/woolworths-news/almondsproductrecall


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## RandR (9 May 2011)

My stop loss was triggered early this morning and I exited my short stay in SHV after it was announced Olam will not be renewing there management contract beyond the 2012 crop. Of their managed orchard business Olam is a quite considerable chunk.

As a result the SP plunged to finish -18% at close.

I am going to continue to monitor the company and SP in the future, my losses on this trade were minimal, so I am keen to re-enter if they look to continue there strategy of acquiring company owned orchards. If they look to be following through with developing/purchasing greater percentages of there own orchards I will happily re-enter .... at the right price of course.


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## maffu (23 July 2011)

Rainmaker2000 said:


> Alas, that was before tax.....even with the 50% CGT, it was too much tax...yet to be paid too
> 
> Unfortunately, SHV is not a 500k idea.......I don't speculate generally and when I do.....its in 'special situations' rather than normal market conditions....*SHV could go down to $2 and I'd be very happy, assuming fundamentals stayed the same*





SHV is now under $2, reaching a low of $1.80 a few weeks back.
I am very interested in buying the stock, although need to do some more research regarding the future prospects. The current numbers look fantastic, so if I find the future looks good, I will hop in.

P/E of 3.65 - consistent profits over the last 10 years
P/B 0.73 -Market Cap lower than the Net Tangible Assets
Dividend Yield - 12%

The only poor thing I see is the often negative operating cash flows, which could be problematic, and the loss of that large contract in May.


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## robusta (23 July 2011)

maffu said:


> SHV is now under $2, reaching a low of $1.80 a few weeks back.
> I am very interested in buying the stock, although need to do some more research regarding the future prospects. The current numbers look fantastic, so if I find the future looks good, I will hop in.
> 
> P/E of 3.65 - consistent profits over the last 10 years
> ...





Negative cash flows are the worry for me to. Often these types of businesses post profits but they are based on depreciation, amortisation and increasing debt / contributed equity.

If I could be confident SHV would have positive cash flow on these numbers I would jump in boots n all - trouble is I am not confident and neither is the market by the look of it.


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## RandR (23 July 2011)

robusta said:


> Negative cash flows are the worry for me to. Often these types of businesses post profits but they are based on depreciation, amortisation and increasing debt / contributed equity.




The above description perfectly fits Olam, SHV im not so sure.

SHV 2010 annual report shows Positive Operating Cash Flows for the Years 09 and 10.

I am interested in your interpretation of SHV cash flow robusta. To me cash flow looks positive and good, (certainly from operating activities) but you might be better at reading and analyzing the statements and associated notes then me.

The big problem moving forward for me is the increasing level of debt, and a more then likely lowering of ROE over the next 2 years before the WA greenfield project starts to produce. Important for SHV moving forward imo is the management of the WA project. Its going to be a fair drain on there cashflow until it starts to produce.

Another big key for me is the careful nature of any more orchard acquisitions, management need to play this very well to get the best use out of the equity and debt facilities raised recently.

I recently did buy back into the stock.


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## rcm617 (23 July 2011)

I dont know where the PE of 3.65 comes from, but last year (FY10) profit was $17.3 million on a market cap of $106m, so a PE of just over 6. For this year they have forecast a decrease of 15 to 20%, so a PE of about 7.5. 
The real problem will come in once they lose the contract for the managed orchards from which they are making a profit of about $12m per year. Subtract that from the forecast profit of $14m for this year and it doesnt leave a lot.
In the meantime company harvest will increase, however while the dollar is at these levels, not much will fall through to the profit line. The only salvation I can see is our dollar dropping, any decrease will flow straight through to profit.


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## maffu (25 July 2011)

rcm617 said:


> *I dont know where the PE of 3.65 comes from*, but last year (FY10) profit was $17.3 million on a market cap of $106m, so a PE of just over 6. For this year they have forecast a decrease of 15 to 20%, so a PE of about 7.5.
> The real problem will come in once they lose the contract for the managed orchards from which they are making a profit of about $12m per year. Subtract that from the forecast profit of $14m for this year and it doesnt leave a lot.
> In the meantime company harvest will increase, however while the dollar is at these levels, not much will fall through to the profit line. The only salvation I can see is our dollar dropping, any decrease will flow straight through to profit.




A good question. I was the one who said they had a P/E of 3.65, and I got that straight from Commsec.
I just looked at how they calculate P/E Ratio and its as follows:

_Price/Earnings (P/E) Ratio

The current price divided by the average of the last actual earnings per share figure and the projected EPS figure for the next year. The two figures are weighted based on the elapsed time between each period.

We use both forecast and historical EPS to give a more balanced P/E ratio than using either one alone._


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## maffu (25 July 2011)

RandR said:


> The above description perfectly fits Olam, SHV im not so sure.
> 
> SHV 2010 annual report shows Positive Operating Cash Flows for the Years 09 and 10.
> 
> ...




When I flagged negative operating cash flows as a worry, I had only read the most recent interim financial report, in which the operating cash flow was negative 3.4mil, however this appears cyclical as in the last 10 years, 6 half yearly reports have had a negative cash flow, while all 10 full year results have had positive cash flows.

I am going to put this on a watch list, and as soon as the full year financial figures are released I will be doing a full valuation of this stock, its ratios have me intrigued, but I will be patient.


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## RandR (26 July 2011)

maffu said:


> When I flagged negative operating cash flows as a worry, I had only read the most recent interim financial report, in which the operating cash flow was negative 3.4mil, however this appears cyclical as in the last 10 years, 6 half yearly reports have had a negative cash flow, while all 10 full year results have had positive cash flows.




Im pretty sure the almond harvest is undertaken in feb-apr sort of timeframe (end of summer, beginning of autumn) Which would probably explain the cyclical cash flow.


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## maffu (25 July 2013)

maffu said:


> SHV is now under $2, reaching a low of $1.80 a few weeks back.
> I am very interested in buying the stock, although need to do some more research regarding the future prospects. The current numbers look fantastic, so if I find the future looks good, I will hop in.
> 
> P/E of 3.65 - consistent profits over the last 10 years
> ...




I never ended up purchasing the shares, but they are now at almost $3.80 despite making a loss for the 2012 financial year the share price has skyrocketed.

RandR did you get back on board?


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## Country Lad (6 August 2013)

maffu said:


> .............but they are now at almost $3.80 despite making a loss for the 2012 financial year the share price has skyrocketed.




SHV has upgraded its forecast for both harvest volumes (up about 100% over last year) and expected sale price (up 21%).  On top of this, for every 1 ¢ fall in the $A adds around $0.5m to EBITDA on an annualised basis.

Apparently the upcoming Californian harvest looks like another annual production drop meaning even tighter global inventories.

A break again today but could be resistance a bit over $4.

Cheers
Country Lad


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## Country Lad (24 August 2013)

Country Lad said:


> A break again today but could be resistance a bit over $4.




Or maybe not.  This setup is usually very positive and market sentiment looked pretty good yesterday.

Cheers
Country Lad


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## piggybank (26 August 2013)

Country Lad said:


> Or maybe not.  This setup is usually very positive and market sentiment looked pretty good yesterday.
> 
> Cheers
> Country Lad
> ...




And today to...


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## Country Lad (28 August 2013)

ex 9 cps dividend today, so it is holding up well on a down day.

Cheers
Country Lad


----------



## Gringotts Bank (16 September 2013)

..................


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## Country Lad (16 September 2013)

Yes, another breakout today by the looks of it.

Cheers
Country Lad


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## Country Lad (23 September 2013)

Country Lad said:


> Yes, another breakout today by the looks of it.




And again and on a down day.

Cheers
Country Lad


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## pixel (29 October 2013)

http://www.asx.com.au/asxpdf/20131029/pdf/42kdqzvdfmwdhc.pdf
Results even better than estimated a mere 2 months ago. No wonder we've got a 5-bagger in 12 months.


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## piggybank (27 December 2013)

Daily P&F update:-


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## piggybank (30 December 2013)

ASX All Ords 2013 best performers December 30, 2013

The best stock performers across the ASX All Ordinaries index have been dominated by a health food company, telco, dairy producer, vet clinic and wealth manager [at close of trade Friday 27 December 2013]. 

Claiming the top spot is almond orchard operator and nut distributor Select Harvests Limited (ASX:SHV) which has surged more than 270 per cent this year and added another 2 per cent on Friday to end the week at $5.09. The company’s stock has this year been boosted by higher almond prices, a stronger crop and lower Australian dollar - even attracting takeover speculation amid a series of Mergers and Aquisitions [M&A] in the agribusiness sector.

Scoring the silver medal is mobile telecommunications provider Hutchison Telecommunications Limited (ASX:HTA) jumping more than 220 per cent followed by takeover target Warrnambool Cheese and Butter Factory Co. (ASX:WCB) soaring 157 per cent in 2013.

Veterinary services provider Greencross Limited (ASX:GXL) has had a stellar run on the back of acquisitions and wealth manager BT Investment Management Limited (ASX:BTT) has been boosted by equity gains, with both stocks climbing more than 140 per cent over the year. 

More notable stock performers rising above 100 per cent in 2013 include Mayne Pharma Group Limited (ASX:MYX), Bega Cheese Limited (ASX:BGA), Tassal Group Limited (ASX:TGR) iProperty Group Limited (ASX:IPP) and Slater & Gordon Limited (ASX:SGH). 

Select Harvests reported a net profit of $2.87 million in the 2013 financial year.


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## piggybank (22 January 2014)

Interesting story from the ABC rural about Australian ALMONDS. This will have a P&F chart at the bottom of SHV

The link - http://www.abc.net.au/news/2013-12-06/foreign-investment-horticulture/5139990

The next link is about SHV's Asia Investor Briefing Presentation that took place on Thursday 20th January.

The link - http://stocknessmonster.com/news-item?S=SHV&E=ASX&N=401092

Australian almonds attracting and appealing to foreign investors.

*Tim Orr was always destined to grow almonds*

It's an industry that's practically in his blood after growing up in northern California, home to 80 per cent of the world's almonds. But he never imaged it would be Australia where he would ultimately enter the family trade. Mr Orr shifted to Australia 20 years ago for a previous career. It was seven years ago that he finally answered his calling and, along with three other investors, purchased a 1,600-hectare wheat property at Cullulleraine in far north-west Victoria. They have since converted the property into an orchard with almost 500 hectares of almond trees. While his family might find it amusing he had to shift to the other side of the globe to grow almonds, they understand the threat Australia poses. "They don't like the competition" Mr Orr says.

​
PHOTO: Tim Orr, an almond grower at Cullulleraine, in north-west Victoria, says foreign investment in Australian almond processing has boosted competition - Brett Worthington

Three of the four owners of Lake Cullulleraine Almonds were born outside Australia. But they are far from alone in their investment in Australian horticulture. The demise of Timbercorp during the heart of the global financial crisis provided the perfect timing for the Singaporean-based food giant Olam to enter Australia's almond industry. Olam purchased all of Timbercorp's almost 12,000 hectares of almond groves and the company's water entitlements. At the time, Olam's purchase equated to about 45 per cent of Australia's planted acreage.

Fast-forward to today and the industry has overcome years of drought to replace Spain as the world's second largest almond producer. Mr Orr expects the sector will continue to grow with further investment in almond processing. "The one thing that's lacking in Australia is the processing capability" he said. "Most of the processors this year were still hulling into August and some of them even into September and early October". "There's people looking all the time in it. I've had quite a few people contact me just with the issues of doing business with almonds here. The almond market could certainly use another huller or two the size of what Olam has put up and the competition would be good" said Tim Orr, Lake Cullulleraine Almonds - 

Olam opened the southern hemisphere's largest almond processing plant at Carwarp, south of Mildura, in March. The $60 million plant has the capacity to be the second largest processor in the world, processing 40,000 metric tonne of almond kernels within 25 weeks. The company's Australian executive general manager Damien Houlahan says building the processing plant wouldn't be possible without foreign investment.

"As a lot of the orchards were coming into full maturity and therefore producing a lot more nuts...there was a deficit capacity in almond hulling and shelling and processing in the (Sunraysia) region" he said. "So for us, it was a very logical step to be the ones that made that investment in the additional capacity that was required". The $128 million Timbercorp asset sale angered some of the company's investors, who claim the company's 40,000 megalitres of water rights was worth more than $100 million alone. Olam announced in November it had struck a $200 cash deal with international investor Adveq to sell 12,000 hectares of orchards. Olam will lease back the orchards for 18 years, while still retaining ownership of the processing plant and water rights. The company expects to earn $45 million in post-tax capital gain once the deal is finalised.

Mr Orr says "there weren't many Australian companies interested" in purchasing Timbercorp's assets - a sentiment Mr Houlahan agrees with. "Quite simply, the capital bucket is just not enough domestically, so foreign capital allows the investments to be made" he said. It allows the continuing investment being made. "It allows, in my opinion, greater innovation, greater research and development and obviously an overall significant commitment to the industry in which the investments are made and the subsequent substantial employment opportunities".

Mr Orr expects foreign investors will lead the charge at building new processing plants. He sells his almonds to Select Harvest, a publicly-listed almond grower and processor that owns about 4000 hectares of almond orchards south of Mildura. Mr Orr says he welcomes any investment in almond processing. "It created a bit of competition" he said of Olam's processing plant. "Olam certainly will eventually be buying almonds from producers and looking for more processing to go through their plant". Growers in Griffith, in southern New South Wales, truck their almonds almost 500 kilometres to Sunraysia for processing.

Mr Orr says more international enterprises are looking to invest in Australian almonds. "There's people looking all the time in it. I've had quite a few people contact me just with the issues of doing business with almonds here" he said. "The almond market could certainly use another huller or two the size of what Olam has put up and the competition would be good". The growth of almond processing in Sunraysia has prompted UK company Balfour Beatty Investments to look to invest in the region. The company wants to build a multi-million-dollar 35-megawatt power plant at Carwarp, near Olam. The biomass power plant will use almond hulls and husks, grape mark and cereal straw to generate electricity. Former horticulturalist turned Mildura Rural City councillor John Arnold says it's crucial the region encourages foreign investment in projects like electricity generation and almond processing. But he says there needs to be strict guidelines overseeing the investment. Cr Arnold, who opposed US food giant Archer Daniels Midland's attempted GrainCorp takeover, says he supports Olam's investment in Sunraysia.

But he says foreign investors must demonstrate how they will enhance the region's economy and employment before gaining approval. "Investment like (Olam) is very important, particularly to a regional economy," Cr Arnold said. "Not only does it provide the impetus for large-scale production of the products that are produced, but also it increases local employment opportunities". "It's really looking at what are the opportunities, what are the advantages, how will that be advantageous to Australia and advantageous to our communities, because we want people to vibrant and productive. "We want to see opportunity continue on".

*Australia's largest solar electricity plant using satellite dishes covered in mirrors at Carwarp, south of Mildura in north-west Victoria*

​
PHOTO: Australia's largest solar electricity plant using satellite dishes covered in mirrors at Carwarp, south of Mildura in north-west Victoria - Brett Worthington

Sunraysia has also attracted the attention of international investors wanting to harness the region's solar electricity capabilities. Australian-owned Solar System opened a 1.5-megawatt power at Carwarp earlier this year. That plant includes 40 solar dishes that generate enough electricity to power 500 homes. The company is conducting a 12-month trial that it hopes will encourage Commonwealth and state governments to invest in, and expand, the project to install 2,000 solar dishes capable of powering 40,000 homes. "Solar power is very important to a region like Sunraysia, which has got a greater length of sunshine periods than even the Gold Coast" Cr Arnold said. "We need to harness those things and make them happen, but often there's not that finance available from within the Australian economy to do it".

*Blooming orchards attracting foreign attention*

​
PHOTO:​ A Select Harvests almond orchard in north-west Victoria in full bloom - Brett Worthington

For Tim Orr, he's just happy the almond industry is picking up from the dark days of the drought. He's optimistic about the industry's future and hopes more international enterprises will invest in Australia - something he says will increase competition and, ultimately, better prices for growers. "It's gone from extreme drought to last year, (which) I believe was probably a very good year for everyone in the almond business" he said. "It's a well suited region, water is available, the climate is compatible with it (and) it's not California - there's no doubt about that".


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## burglar (22 January 2014)

piggybank said:


> ...
> 
> View attachment 56445




Hi piggybank,

That's a lovely chart if you own some shares.

Being the first blossoms of the year, I love almond groves!
Did you note that almond blossoms were 2-3 weeks early last season?
Probably due to Global Warning!!





Disclosure: I do not hold!


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## piggybank (22 January 2014)

Hi piggybank,

That's a lovely chart if you own some shares. Unfortunately not but I think C/L does/or did?

Being the first blossoms of the year, I love almond groves!! Did you note that almond blossoms were 2-3 weeks early last season? 

Unfortunately not - its pretty difficult seeing the orchards living in the BIG SMOKE 

Probably due to Global Warning!! - Thats what Tony A said the other night but then he does love his ALMONDS.

Have a good weekend - I know Novak Djokovic won't...

PB


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## piggybank (8 February 2014)

Agricultural produce (soft commodity) prices are set by trade in international markets and fluctuate with demand and supply, much like gold and oil. The major influence on soft commodity supply in the near term is the weather. A key weather focus at present is California, home of the world's largest almond production region. The Almond Board of California estimates indicate that California will contribute 83 per cent of world supply this financial year. The California Department of Water Resources has recently reported that last year was that state's driest year on record. More pressing for 2014 is the department's estimate that California's winter snowpack is holding only 20 per cent of its average water content (a guide to river flows). At the same time, the US Department of Agriculture estimates that almost two-thirds of California is in extreme drought.

Australia has recently become the second-largest almond production region in world. According to the Californians, we will contribute 5.9 per cent of world supply this financial year, with third-placed Spain to supply 2.9 per cent. In contrast to California, Murray-Darling Basin Authority data indicates much of Australia's almond-growing region has good water-storage levels. This contemporaneous foreign drought and local flush are among the key factors that produced the agribusiness comeback kid of 2013. Select Harvests, an Australian- listed almond processor and producer, endured a tumultuous three years through to mid-2012. Select suffered a perfect storm of low global almond prices, domestic drought causing below average almond crops, loss of its major client and an unsuccessful project to establish a new almond region in Western Australia. Its share price closed as low as $1.12 in September 2012.

Select's shares recently touched as much as $6 and closed on Tuesday at $5.75. Investors have applauded a refreshed management team's decision to cease its WA expansion; almond prices have climbed sharply as the drought in the US has constrained production there; and mature Australian orchards purchased by Select in recent years have produced excellent crops. Analysts' consensus forecast for fiscal 2014 net profit after tax is $34 million. This is a big turnaround from fiscal 2012 when the company reported an after-tax loss of $4.5 million (affected by asset impairment charges). It is trading at around 10 times consensus forecast fiscal 2014 earnings per share of 58? at the current price. Select remains exposed to the ebbs and flows of California's weather. Another dry year will put substantial pressure on Californian almond yields, global supply and global prices. Whether Select's share price has run its course is a matter of conjecture among analysts. Regardless, Select Harvests has enjoyed a spectacular run and serves as a timely reminder that, while keeping an eye on the sky, Australia's listed agribusiness sector is much more than GrainCorp and Warrnambool Cheese & Butter.

This article can be found by clicking on this link:- http://newsstore.fairfax.com.au/apps/previewDocument.ac?sy=smh&ss=SMH&docID=AGE140205JD1EF62GR8Q&backTo%3Dhttp%3A%2F%2Fmarkets.business
day.com.au%2Fapps%2Fqt%2Fquote.ac%3Ftype%3Ddelayedquote%26code%3DSHV

​


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## piggybank (28 February 2014)

Well the report came out today and it looked alright to me but then I am only a chartist It would be nice to hear what the resident Fundamentalists had to say.

*Half Year Ending 31 December 2013 Results Presentation​**1H14Net Profit after Tax (“NPAT”) of $18.4m, compared to Reported 1H13Net Loss after Tax (“NLAT”) of ($19.5m)
*1H14NPAT of $18.4m, compared to Underlying 1H13NPAT of $8.4m(after excluding the after-tax impact of the     write-down of the WA Almond Orchard Project from the 1H13result) -*up 118%*
*1H14 Earnings before Interest & Tax (“EBIT”) of $27.0m, compared to Underlying 1H13 EBIT of $14.4m * -up 84%*
*1H14Profit before Tax (“PBT”) of $24.8m, compared to 1H13Underlying PBTof $12.0m -*up 106%*
*Strong operating cashflowof $23.5m, compared to 1H13 cash flow of $11.6m -*up 103%*
*Gearing (Net Debt to Equity) 45.3%, up from 43.8% (Note -includes $16.3m acquisition)
*1H14Earnings per Share (“EPS”) 32.0 cents per share (“cps”), compared to Underlying 1H13EPS of 14.8 cps -*up 116%*
*Interim Dividend declared of 11 cps (Record Date: 7 March 2014, Payment Date: 24 April 2014) -*up 267%*
*SHV is starting to deliver on its potential based on 2014 crop & price estimate

The rest of the report can be read by clicking on this link:- http://stocknessmonster.com/news-item?S=SHV&E=ASX&N=402911

*Bloomberg News - Almond Drought Boosts India Sweets to Aussie Farms​*In India, where almonds are used to make sweets and garnish curries, prices have jumped 39 percent in the past year on the National Commodity & Derivatives Exchange and are 83 percent higher than five years ago. The worst California drought on record is forcing Jeff Schmiederer to spend $1.1 million on two new wells for his 1,200-acre almond orchard. Trees got so little water in 2013 that this year’s harvest may drop 25 percent, and the damage may be even worse in 2015. “You’re making next year’s crop this year” Schmiederer, 49, said by telephone from Mendota, in the arid central valley that supplies 81 percent of the world’s almonds. With state water allotments cut to zero, Schmiederer’s wells may only help get irrigation to about 75 percent of normal. “I’m right on the edge of my water needs. Next year could be a disaster”. 

Prospects for fewer California almonds are forcing buyers to pay at least $3.10 a pound, 10 percent above the record average in 2006. Prices already were surging since 2009 as demand outside the U.S. almost doubled in a decade to 1.3 billion pounds (590,000 metric tons). The nut, which ancient Romans tossed at newlyweds as a fertility charm, is a snack food used in everything from Hershey Co. (HSY:US)’s Almond Joy candy bar and WhiteWave Foods Co.’s Silk almond milk to Indian chocolates, French pastries and German marzipan.

More of the article can be read by clicking on this link:- http://www.businessweek.com/news/20...osts-india-sweets-to-aussie-farms-commodities

​


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## charlieq (13 May 2014)

wondering what's going on now. chart is not looking as good as it was last week


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## luutzu (13 May 2014)

charlieq said:


> wondering what's going on now. chart is not looking as good as it was last week




Bought this a long while back. It got really good within a couple months, then a bit better... then just went downhill for a long while, then a long long while I can't bear to look at it. 

Last I look it seems reasonable at $7... they harvested all crops from other states and 60% of NSW before today's report so things can't be that bad. 
I still hold the stock so yea...


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## piggybank (13 May 2014)

Obviously yesterdays update of the SHV Global Market Local Harvest wasn't well received by the market.


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## charlieq (14 May 2014)

They said they couldn't complete harvest if it rained but that's not happening. World supply seems to be short. Price should increase. dollar seems better for them than anytime in the last few years. oh well I'm just going to hold on to all my food stocks


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## Logique (6 March 2016)

Shocked to see the price action on this one.. $4.25 now.

With, in 2016,  agriculture stocks all the rage, and nut stocks in particular, how does Select Harvests get to be so unloved?


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## shouldaindex (6 March 2016)

Occums Razor.


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## skc (6 March 2016)

shouldaindex said:


> Occums Razor.




Please elaborate?


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## peter2 (28 April 2016)

If you're still "nutty" over this almond producer. 

The chart looks much more promising now and if price forms a higher low(HL) here, the break-out above 5.50 would be a worthy setup. 

Who knew how volatile almond prices could be?


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## craft (28 April 2016)

peter2 said:


> Who knew how volatile almond prices could be?
> 
> View attachment 66456




SHV is not only leveraged to the almond prices but also water. They don’t own enough water rights to meet their needs without buying spot and Almond Trees are permanent plantings that you can’t let die and still have a business no matter how silly the water price goes in the short run.  Volatility assured.

My way out there predication is that one very dry year WBA will buy these guys for a song.


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## pixel (10 July 2016)

Transferred from Breakout Thread: cropcos suggested 







> SHV has formed a rounded base, shot higher on increased volume and is taking a breather. the shallow retracement of the recent high offers a low risk entry. watch for a break of $7.56



The chart provided in support suggests a Cup'n'Handle pattern which, if playing out "by the book", should indeed offer a target close to $10.




Were this pattern to form after an uptrend, as it did in 2014, the odds for a breakout would be significantly higher, as would be the target range. However, I have also seen it succeed after a pullback like above.


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## Triathlete (10 July 2016)

pixel said:


> Transferred from Breakout Thread: cropcos suggested
> The chart provided in support suggests a Cup'n'Handle pattern which, if playing out "by the book", *should indeed offer a target close to $10.*




If we do get this breakout as has been suggested the first area of resistance I would look at is $8.685 this is the 50% retracement from the low in April 2016 back up to the high in August 2015. 

The stock has a Dow entry now on the weekly chart and  with all the daily, weekly and monthly swings pointing  up so stock looking good for a run and we still have 19% left in the move based on Fridays close to this first resistance level, I guess a case of what your risk/reward is. 

If it does get here and closes above this 50% level @$ 8.685 then I would say the stock is strong and a further  run towards $10 is certainly a possibility and if it finds too much resistance here it may come all the way back.


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## History Repeats (10 July 2016)

Purely looking at momentum, rank 7th overall within small cap index. And one of the two stocks on the top 10 momentum that is not from mining or mineral sector/industry from the index.


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## pixel (12 July 2016)

History Repeats said:


> Purely looking at momentum, rank 7th overall within small cap index. And one of the two stocks on the top 10 momentum that is not from mining or mineral sector/industry from the index.




... and one of the stocks that are new in my portfolio. 
Here's hoping the break doesn't turn out to be a false one


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## peter2 (28 November 2017)

SHV is another on my reversal watch-list. It's not ready yet.

The company has had a horror two years and the share price has been in a strong down trend over that time. 

IMO the share price is nearing an important area. The company has recently raised capital at 4.20/s. This extra capital has been used to buy more almond acreage and secure water availability. Major projects that have been delayed and over budget are finally nearly completion. 

I would expect the 4.20 level to provide some support, but there is a much more important level at 3.70. You can see this level marked on the weekly chart. If price goes below this then this company is dead (to me). 

It's not ready yet. I'd like to see some demand soon that will stop the down trend. Then I'd expect a sideways basing pattern to form as the last of the frustrated longer term holders sell to the more optimistic longer term investors.


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## peter2 (18 January 2018)

Soon after the last post SHV received some demand which formed an outside reversal bar on the weekly chart. Price then went sideways for six weeks before further demand bid the price up. This is a good chart for a Wyckoff student (weekly chart shows the SC, AR, Spring, SOS).


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## barney (8 July 2018)

Courtesy of @tech/a    Posted 22 June 2018


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## barney (8 July 2018)

SHV chart update from tech/a …. Posted 4th July 2018


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## JTLP (10 July 2018)

barney said:


> SHV chart update from tech/a …. Posted 4th July 2018
> 
> 
> 
> ...




Barney - would you mind giving a little context around these charts and what they mean?


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## Mr Bear (10 July 2018)

History Repeats said:


> Purely looking at momentum, rank 7th overall within small cap index. And one of the two stocks on the top 10 momentum that is not from mining or mineral sector/industry from the index.




Hi HR,

What momentum metric are you using to quote these rankings?


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## barney (10 July 2018)

JTLP said:


> Barney - would you mind giving a little context around these charts and what they mean?




Hi @JTLP ……. This chart and some others were borrowed from @tech/a 's threads   Tech gives his commentary on how he sees the charts progressing .... See links below  Cheers.

https://www.aussiestockforums.com/t...lysts-an-application-to-trading-stocks.34044/

https://www.aussiestockforums.com/t...mple-charts-analysis.34060/page-2#post-988332


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## peter2 (11 July 2018)

Some price movements drive me nutty, but this sustained selling and 24% price fall in SHV is so far unexplained. 





I've been hit by a few lately (SHV, JIN, APE, CGC). It's an interesting market atm.


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## tech/a (12 July 2018)

Pete
Do price movements need to be explained.
Isn’t supply flooding the share explanation enough?

Do you just hang on all the while protesting 
THIS SHOULDNT HAPPEN?

Why when standing in a taxi rank if I look up and point 
Everyone else looks up and some point!


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## debtfree (12 July 2018)

@tech/a I don't think @peter2 is hanging on to this stock at all.

Looking at his weekly chart I noticed 3 little blue circles (Dec/Jan/Feb) which I would say to be his buying areas. My rough guess is an average price of about 4.80
Then he also has a red circle on the opening of the 2nd red bar (2nd July) which I would take it he sold @ 6.90. So I'm presuming trade is over and he's not hanging on.

I think he just stating how can it fall by 24% and no explanation has been made at all.

Thanks once again @tech/a for your charts, love seeing what you see and your views.

Cheers ... Debtfree


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## tech/a (12 July 2018)

Wasn't meant as a personal slight in anyway towards Peter and I agree I doubt he has the stock and he is being somewhat humorous.

My comments were meant as general rhetoric.

Usual rush without being sensitive !


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## tech/a (12 July 2018)

The last week has shown an increase in volume as the stock falls The last 4 Hrly bars has seen range decrease and some consolidation occur. (Low volume up day today) Ill post that chart when I get a chance. A great ABC example on this move on that chart as well!

This is signalling an exhaustion of this current down move.

From here I expect limited down side without a catalyst.


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## kid hustlr (30 November 2018)

One I've had some success in with previous trades - SHV appears to be trying to bottom with some positive price action over the past several days.

Can be a little skittish. It has range traded between 4 & 7.50 for the best part of 3 years


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## peter2 (21 January 2019)

The chart below is part of a research project and should not be considered a recommendation to buy this stock. If you want to read more about the project log in to read the P2 Weekly Portfolio thread. 

Setup: Pre-empting BO-NH in new trend    Grade B due to low daily traded volume
Buy limit: 6.45, iSL 5.7, initial target 7.49


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## aus_trader (3 June 2019)

SHV has been in an up-trend recently and with the recent spike (9.8% up) has made a new Higher-High on the chart mainly due to the report out on Friday 31st May (Breakout type scenario from a traders point of view). The share price increase may also be partly due to investors/traders buying the stock before the ex-dividend date (Thursday June 13, 2019), which is coming up.


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## HelloU (6 August 2019)

r rff arrangements all ok????


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## aus_trader (7 August 2019)

HelloU said:


> r rff arrangements all ok????



RFF drop was all due to "an article" according to company announcement which came with Trading Halt, so I think business is OK.

Any idea what was so damaging in an article that could wipe nearly half of RFF ?


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## HelloU (7 August 2019)

HelloU said:


> r rff arrangements all ok????




yesty i posted in the rff thread - before rff went into the halt - that bonitas had released a view that they were not fans of rff. (the bonitas report was released at 10:33am and was very plainly written) .... that was the preface to the post i made in this shv thread.

The post I made in the shv thread is about shv.


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## aus_trader (7 August 2019)

What a reaction to a simple report !!

La Isla *Bonita*


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## Dona Ferentes (17 March 2020)

Select Harvests says the market conditions remain strong and that its 202 harvest is progressing well. The company noted the Australian Almond Board's January export shipment report which showed month on month shipments rose 40 per cent and 26 per cent year-to-date.



> "World demand from major almond importers and domestic customers remains strong. Our Chinese customers have commenced production post the extended Lunar New Year closure as a result of the Coronavirus." "Select Harvests’ 2020 crop is over 65 per cent committed for sale at prices within the previously provided range of $8.00 to $8.50 a kilo. As previously advised, cashflows have been delayed and we anticipate export shipments of the 2020 crop will commence within the next month."





> The company said its 2020 harvest was progressing well with 40 per cent of orchards harvested with completion expected by the end of April.
> 
> "While it is too early to provide an accurate forecast Select Harvests' management is currently optimistic about crop size and quality."





SHV chart over the last 12 months (up 11% this morning)


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## Dona Ferentes (18 March 2020)

The water situation should mean irrigators can get a share.

Recent rainfall in the Murray-Darling has eased pressure on the system and made water avaiable
https://www.mdba.gov.au/  with a PDF  /Local/Temp/River-Murray-Operations-Weekly-Report-11-March-2020.pdf

Murray system still has 28% capacity in its storage. The Darling isn't yet fully flowing, though first flush has hit Menindee.
https://www.mdba.gov.au/media/mr/rain-brings-new-life-after-shocking-summer


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## The Triangle (20 March 2020)

Absolutely irrational market.  No debt, great crop report, food.  Great pickup below $7, even better in the $5s, but doubt we'll see that again.  In the span of a week and today's 10% jump this has now become my largest holding. 

I believe with all this corona virus paranoia that having investments in firms with limited debt will be very good.


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## Dona Ferentes (23 March 2020)

The Triangle said:


> ...  No debt, great crop report, food.
> 
> .... investments in firms with limited debt will be very good.



another soothing announcement today (but still fell to $7)

- 50% of harvest completed and at primary processing plant
- yield and quality similar to last year
- an essential service and will continue to operate
- exempt from lockdowns and border restrictions


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## The Triangle (25 May 2020)

Quick turnaround.   I sold first thing today.   Walked away with a small profit - 

Reasonable company - but just a poor report in every aspect.  Unwrapping the cash flows and lease liabilities for the period was too annoying to do this weekend.  

   Considering they would have only just started seeing corona impacts i doubt this year is going to be great.   Also China not happy with us or australia.  Cant be good for exports.   

SHV need to use their low debt status.  

Might get back in if this gets back to low 6s.


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## The Triangle (10 July 2020)

Now that this hit the low 6s high 5s thought I would look at it again.  Recent crop report is out saying that average price per kilo is between 7.25 and 7.75 for 80%.  I'll work on 100% going for less than 7.50.  It was 8.20 last year.  That is a 70 cent swing or roughly $16 million less revenue.   (Considering the same size crop)  They also warned out some issues with almond hull demand and quality due to rain.

_"The forecast larger US crop and the challenges relating to market access has resulted in aggressive selling by some marketers resulting in a significant softening in pricing and as a consequence the market has seen contract defaults"_ - I don''t like that one bit.

Costs were already up.  Corona virus not showing any signs of slowing down - so not sure what is going to be the driver of prices to go up or costs to go down.   Could very easily see this in a medium-term slump down to the mid 4s.  Also, given its a agricultural company we're bound to see a bad crop year soon.


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## Dona Ferentes (1 October 2020)

Select Harvest is poised to announce an _acquisition of $150 million worth of almond farms, according to market sources._

_It is understood that the company will launch a $120m equity raising at $5.20 per share to fund the acquisition_


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## peter2 (1 October 2020)

You are quick with this news (your post 6:05pm). ASX announcements released at 7:12pm.  

SHV has been on my reversal watch list for quite some time and has failed to reverse so far.  I was getting ready to place the buy stop order, but will wait to see what happens to price during the cap raising.


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## rnr (1 October 2020)

peter2 said:


> You are quick with this news (your post 6:05pm). ASX announcements released at 7:12pm.
> 
> SHV has been on my reversal watch list for quite some time and has failed to reverse so far.  I was getting ready to place the buy stop order, but will wait to see what happens to price during the cap raising.
> 
> View attachment 112510




A very interesting observation you have picked up on there @peter2!


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## The Triangle (4 October 2020)

Big dilution at the 'bottom' of the recent share price history.   The crop update was once again non-specific and I'm glad I have not re-entered SHV.   I do not expect a very good looking 1/2 year result and feel this acquisition and raising will partially mask a a big profit hit and issues with global oversupply.  California almond crop sizes in the past few years seem to be bigger than the forecasts.  Obviously a lot of people were planting back when the prices were high.  Would prefer for SHV to de-risk and diversify to other nuts, or other almond products.


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## Dona Ferentes (13 July 2021)

tight supply and increasing demand .... a wonderful combination.  SHV up $1.00 or some 15%



> MD Paul Thompson said: “_Record almond shipments and the worsening Californian drought have led to a recent price appreciation. Demand for almonds, both in their natural form and as a value-added food ingredient, in products such as plant based milks and yoghurts, continues to grow. Thanks in part to the December 2020 acquisition of Piangil Almond orchard, Select Harvests is set to achieve a record almond crop of 28,250MT in 2021. With good progress being made on the 2022 crop, Select Harvests remains focused on the factors within its control, including almond volume, quality, value adding and operating costs_.”


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## Dona Ferentes (28 July 2021)

Select Harvests says it expects its almond crop volume to be higher in 2021 than it was in 2020, with prices also on the rise. It expected the crop from the acquisition of the Piangil Almond Orchard, to be approximately 28,250 million tonnes, above its 2020 crop volume of 23,250 million tonnes.

Market pricing has also significantly increased. The current market prices have increased by 50¢ a kilo to between $6.75 and $7.25 a kilo and demand remains strong at these levels. SHV said 65 per cent of its 2021 crop was committed at prices in the range of $6.15 and $6.45 a kilo.


> “_The strengthening of current market conditions is pleasing with the demand for inshell almonds, almond kernels and value-added almond products remaining strong_,” said managing director Paul Thompson.





> “_We are looking forward to a strong performance in 2022 including the benefits of our Piangil Almond Orchard acquisition, the improving profile of our orchards and the recent strengthening of the almond price."_




_and a high for the 12 months.... now $7.64_


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## Dona Ferentes (29 June 2022)

Dona Ferentes said:


> _and a high for the 12 months.... now $7.64_



but a wall of worry .... now getting down to $5 level. Hasn't been there since early 2018

_Select Harvests warned its 2023 crop pollination is at risk if the emergence of varroa mite dangerous to European honeybees cannot be successfully eradicated. It was detected in the Port of Newcastle last week, putting all NSW hives on “standstill” orders. _

_Select Harvests said 29 per cent of its orchards, which are in NSW, are affected by the standstill order and a further 11 per cent rely on NSW hives. All up, 44 per cent of orchards (including Select's hives in Queensland) are at risk of disruption which it is trying to address with strategic hive planning._


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## peter2 (29 June 2022)

Sold off early in the day on the news of the possibility of poor pollination. Plenty of demand in the afternoon. 





	

		
			
		

		
	
..

Classic transfer from the weak holders to the strong. Plenty of time before the close to decide the outcome.


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## finicky (15 December 2022)

Cool reception of the production update today - closed down 3% and now almost at the level of the major lows of recent years. Below the 2020 CV19 low.
So much that can go wrong with an exporting agricultural company so doubt I would get in at any price.
Two guys from WiIsons opine that SHV is a neglected 'cyclical' that should pay a reward if patient. They say SHV's assets are worth more than it's price and they were referring to a $5.50 share price (closed today @ $4.09). Don't get that, as Commsec's book and tangible stats do not confirm - maybe they've done their own appraisal of current property values. It's almost like they are talking about another company. They mention California will be working through its prior production glut and that drought darkens Cal producers' future.
From elswhere, it was mentioned that SHV should benefit from free trade agreement with India (a big almond consumer)








						Why we are bullish on these cyclical stocks
					

Heightened volatility continues to grip markets, but WAM Capital still sees opportunities in several corners of the market.




					www.livewiremarkets.com
				




Not Held

Chart is All Data Quarterly intervals for perspective. To me it looks a risk of breaking the support of recent major lows.


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## divs4ever (15 December 2022)

finicky said:


> Cool reception of the production update today - closed down 3% and now almost at the level of the major lows of recent years. Below the 2020 CV19 low.
> So much that can go wrong with an exporting agricultural company so doubt I would get in at any price.
> Two guys from WiIsons opine that SHV is a neglected 'cyclical' that should pay a reward if patient. They say SHV's assets are worth more than it's price and they were referring to a $5.50 share price (closed today @ $4.09). Don't get that, as Commsec's book and tangible stats do not confirm - maybe they've done their own appraisal of current property values. It's almost like they are talking about another company. They mention California will be working through its prior production glut and that drought darkens Cal producers' future.
> From elswhere, it was mentioned that SHV should benefit from free trade agreement with India (a big almond consumer)
> ...




 i bought back in , in November ( this year ) cum. div. ( i also hold RFF , my preferred exposure )

 am looking for sub $4 to add more 

 yes a LOT can go wrong  , but a lot can go right  especially when most of the rivals are in California, USA and you MIGHT get some FX tailwinds ,
  counter-intuitive moves to announcements ( from memory ) used to be a trade-mark of this share ( maybe it's a leaky ship  and maybe not ) i look to see if the price moves towards the target  , that seems to work for me 

 bought as low as $$1.27 ( June 2012 )  and sold as high as $12.80 ( July 2015 )

 IMO more a stock for an opportunistic investor than a trader , but still in the ASX top 300  so will attract some ETF and trader action


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## JohnDe (19 December 2022)

Opportunity knocking?

Another one of my Alerts going off at the ridiculously low price I set up months ago.


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## divs4ever (19 December 2022)

i have an order in  , but not all that close  ( still a few cents away )

good luck  if you play here  ( it CAN make big moves  over a few years span )


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## divs4ever (19 December 2022)

given the roller-coaster moves in SHV  in the past it is very likely  i will rescue the investment cash when substantially in profit , say up around 200%  , which will probably a long wait given current economic conditions


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## The Triangle (19 December 2022)

divs4ever said:


> i have an order in  , but not all that close  ( still a few cents away )
> 
> good luck  if you play here  ( it CAN make big moves  over a few years span )



Haven't seen it this cheap in a long time.   Had this spreadsheet open from yesterday's pearl research and plugged in the SHV numbers for past 4 years (in 1,000s).   Not liking what I see...   3 years of flatline revenue (Revenue was ~250 million in FY12...   So they really haven't achieved a thing in a decade) and 4 years of cost growth, total expenditures higher than income, so they are using debt to finance/subsidize capital, and probably some of the leases.  On top of that they obviously cannot pay the dividend from operating cashflow, so they're borrowing to pay a dividend...    Now this is all fine if you *trust *the company to deliver on its strategy, grow, etc. etc.  Or if you're investing in the cycle.  But I said a few years ago I thought they needed to take onboard debt to increase profitability/revenue.  Well...  Looks like they've taken on debt to achieve SFA in my opinion.  

On a related note I bought a bag of almonds a week ago and it was 65% off, can't remember the brand.  Never seen almonds this cheap before.  Think I'll stay out of SHV for a while myself, but I'll keep an eye on it.


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## divs4ever (19 December 2022)

share price down , yes 

 but P/E is high ( 79.45 )   D/E  is high  ( 72.6% ) for my liking , Div. yields low ( 0.5% ) and given the debt levels one would expect div. payout ratios to stay low while the debt is paid down .

BUT unlike several 'tech ' and BNPL stocks does make a profit  ( some years  ) so am calling this a 'safe-haven/growth stock ' thinking US rivals will struggle with increasing costs  ( compared the SHV )


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## divs4ever (20 December 2022)

the order filled  (@ $3.95 ) for better or worse 

 i hope this is not an omen  that this Xmas will be nuts !


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