Agribusiness

[MRC & Co]

Hi guys/girls,

I could not find a thread on the topic, so here goes:

Many are starting to realise the long-term potential of agribusiness, probably the area I am most bullish on over the next 10+ years and as such, am planning on moving some of my small portfolio dedicated to investments, to this sector.

As are most, I am also bullish energy, but think new policy (emissions trading) and alternate energies will somewhat negate the increasing demand globally. However, as economies develop, along with values and ideology, I believe farmers will become increasingly scarce. With growing food demand both in the form of personal consumption and for the use of biofuels, I think this area is one which will prosper.

However, which ETFs or stocks (either on the ASX or in the US) are currently strong and in such an area?

My knowledge in this area is very limited.

Thanks for any information, I know there are a few others around here thinking along similar lines.

Cheers

 

[michael_selway]

Hi guys/girls,

I could not find a thread on the topic, so here goes:

Many are starting to realise the long-term potential of agribusiness, probably the area I am most bullish on over the next 10+ years and as such, am planning on moving some of my small portfolio dedicated to investments, to this sector.

As are most, I am also bullish energy, but think new policy (emissions trading) and alternate energies will somewhat negate the increasing demand globally. However, as economies develop, along with values and ideology, I believe farmers will become increasingly scarce. With growing food demand both in the form of personal consumption and for the use of biofuels, I think this area is one which will prosper.

However, which ETFs or stocks (either on the ASX or in the US) are currently strong and in such an area?

My knowledge in this area is very limited.

Thanks for any information, I know there are a few others around here thinking along similar lines.

Cheers

Hm these are the stocks I can recall, mainly phosphate (fertiliser)

CII, IPL, RWD, MAK, NUF, ADY, STB, GCR, POZ, MNM

http://www.asx.com.au/asxpdf/20080623/pdf/319s2kmj529630.pdf

There has been a few good articles around on the industry above is one of them

thx

MS

 

[MRC & Co]

Thanks Michael, yeh, I seem to be only coming accross fertalizer type companies on the ASX. Don't think we have much of a public agribusiness market.

I know it is a decent industry in the US, but am having trouble coming accross companies.

 

[So_Cynical]

I doubt that phosphate miners would qualify as agribusiness.

AWB - AWB Ltd is Australia's leading agribusiness and one of the world's largest
wheat marketing and management companies.

FCL - Futuris Corporation is a leading Australian diversified industrial. Each of our
major businesses is a leader in its sector.

The Company generates the major share of its income from the Australian rural and primary
production sector through rural services, beef production and forestry.

ABB - ABB Grain is a leading Australian agribusiness with a multi-faceted operation
and international focus. While the company’s history is steeped in grain accumulation and
marketing, the present reflects a much more diversified operation, stretching across the
entire supply chain.

 

[MRC & Co]

Legend, I will give these quiet a bit more fundamental analysis!

Cheers

 

[michael_selway]

I doubt that phosphate miners would qualify as agribusiness.

AWB - AWB Ltd is Australia's leading agribusiness and one of the world's largest
wheat marketing and management companies.

FCL - Futuris Corporation is a leading Australian diversified industrial. Each of our
major businesses is a leader in its sector.

The Company generates the major share of its income from the Australian rural and primary
production sector through rural services, beef production and forestry.

ABB - ABB Grain is a leading Australian agribusiness with a multi-faceted operation
and international focus. While the company’s history is steeped in grain accumulation and
marketing, the present reflects a much more diversified operation, stretching across the
entire supply chain.

Oh you mean those stocks . The thing about these ones is that they are often hit by drought so can be a risk there etc

AWB, ABB, GNC, FCL, AAC, SHV, GFF, CSR, NAM

Some other popular ones i can recall

thx

MS

 

[So_Cynical]

Yes there's good potential for the phosphate miners....and there's
potential in the company's that convert the phosphate into super
phosphate...apparently they need alot of sulfur to do that.

 

[Muschu]

Do companies such as IPL export fertiliser and, if so, doesn't that lower their risk exposure to drought?
Don't know, just asking.

 

[michael_selway]

Do companies such as IPL export fertiliser and, if so, doesn't that lower their risk exposure to drought?
Don't know, just asking.

IPL generally isnt affected by drought but AWB will be for example

Btw below quote soem interesting info

An article in today's Sunday Telegraph on the 'top 10 speccie stock tips under $1.00' was very interesting indeed. Phosphate and potash had a big mention & by extention so did MAK & RWD.

While he recommended 2 other stocks, the writer makes a good plug for fertiliser stocks, and uses the RWD & MAK projects as benchmarks for other specs.

Great stuff ... Some pertinant bits:

"Speccies, as they're known in the industry, are usually little-known companies that have the potential to grow into something huge, with generous dividends and table-thumping profit growth .... Here, in no particular order, are some of the best speculative stocks under $1, as suggested by the analysts.

2 SOUTH BOULDER MINES (STB) 25.5c

The directors of South Boulder Mines saw the writing on the wall earlier than most.

They forgot about gold and nickel and went hunting for phosphate and potash, securing the Lake Disappointment East Potash project -- conveniently located next to Reward Minerals' JORC-compliant, 27-million-onne potash resource.

A classic case of "near-ology", or a potential windfall?

Wise-owl analysts believe the latter and say the market's insatiable appetite for fertiliser stocks will drag South Boulder into the stratosphere if it delivers a resource.

"It has a similar story to Reward Minerals, which has gone absolutely ballistic in the past few months," Wise-owl equities analyst Imran Valibhoy says.

"It's still in the early stages, but we feel these guys really do have the potential to become quite a big player in the market."

10 PHOSPHATE AUSTRALIA (POZ) 57c

Timing is everything. This tiny company made its ASX debut last week to much fanfare, thanks to the market's love of anything that even looks like phosphate.

It has large land holdings throughout the rich Georgina Basin, bordering the property of Minemaker's JORC-compliant phosphate resource.

"It's early days, but we love anything to do with potash and phosphate at the moment," the Melbourne analyst says."

http://fertilizerworks.com/fertreport/pdf/2008/TheMarket-070308.pdf

thx

MS

 

[julius]

AAC is in a bad way. Steer clear...

 

[MRC & Co]

Thanks fellas.

I have looked through all of the list.

As I thought GCL looked best out of Michaels coal list, back at $7 just months ago, I think NUF looks the best out of this list.

IPL looks good too, but is similar to POT over in the US and I trade these two so will catch some of their trends anyways hopefully.

Too bad I didn't invest in GCL, instead, I traded it twice and both times hit a 10% whipsaw the very next day!!!!! My worse performing stock of the financial year!

 

[michael_selway]

Thanks fellas.

I have looked through all of the list.

As I thought GCL looked best out of Michaels coal list, back at $7 just months ago, I think NUF looks the best out of this list.

IPL looks good too, but is similar to POT over in the US and I trade these two so will catch some of their trends anyways hopefully.

Too bad I didn't invest in GCL, instead, I traded it twice and both times hit a 10% whipsaw the very next day!!!!! My worse performing stock of the financial year!

Hm yeah GCL still not bad actually

I like MCC at current prices the best out of the coalies

GCL - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 22.8 31.7 156.2 279.4
DPS 14.0 16.4 77.0 75.2

MCC - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 27.6 21.1 192.5 331.7
DPS 18.0 16.0 92.0 165.0

thx

MS

 

[bvbfan]

PrimeAg (PAG) I think has interests in farmland in Australia, could be worth some research

 

[MRC & Co]

Hm yeah GCL still not bad actually

I like MCC at current prices the best out of the coalies

GCL - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 22.8 31.7 156.2 279.4
DPS 14.0 16.4 77.0 75.2

MCC - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 27.6 21.1 192.5 331.7
DPS 18.0 16.0 92.0 165.0

thx

MS

Yes, MCC was my second favourite coalie.

The thing is, though it's EPS is forecast to be higher, it has to return on over 4 x the equity.

Thx for the tip BVB, does sound very interesting, but again, a lot of capital raised at the IPO, not sure forecasts more than a few years out........would need a lot more than it's current forecasts to return a decent yield on equity.

 

[michael_selway]

Yes, MCC was my second favourite coalie.

The thing is, though it's EPS is forecast to be higher, it has to return on over 4 x the equity.

Thx for the tip BVB, does sound very interesting, but again, a lot of capital raised at the IPO, not sure forecasts more than a few years out........would need a lot more than it's current forecasts to return a decent yield on equity.

PAG, never heard of that one, but looks interesting

PAG - Earnings and Dividends Forecast (cents per share)
2007 2008 2009 2010
EPS 0.0 0.9 11.2 11.9
DPS 0.0 0.0 4.0 3.3

Business Description
PrimeAg Australia Limited (PAG) own and operate Australian agricultural land and water entitlements with a view to producing income and long-term capital growth through the production of soft commodities. PrimeAg plans also to produce some livestock products.

thx

MS

 

[Bluebeard]

In terms of an agribusiness play- what are peoples favorites? Im currently looking at ELD, and Graincorp ... but I dont know alot about this industry. Is anyone in here following the agricultural type stocks- and what are your views- it would be greatly appreciated.