SHV - Select Harvests

[brilliantmichael]

"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:

 

[Rainmaker2000]

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....

 

[brilliantmichael]

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!

 

[Rainmaker2000]

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

 

[Brengun]

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.

 

[Brengun]

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

 

[greenfs]

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.

 

[Rainmaker2000]

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

 

[Brengun]

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.

 

[brilliantmichael]

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:

 

[Brengun]

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

 

[brilliantmichael]

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

 

[Rainmaker2000]

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

 

[Brengun]

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?

 

[Rainmaker2000]

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....

 

[Brengun]

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.

 

[Rainmaker2000]

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

 

[Rainmaker2000]

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

 

[Rainmaker2000]

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.

 

[drum]

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.