TGR - Tassal Group

[tge oracle]

I guess TGR has been affected, somewhat, by the negative sentiment torwards the aquaculture industry most notebly, AAQ,WKL,MPA and now CSS.
Unlike those companies TGR has a well established product and market. The appreciating AUD is not helping either.
I taken advantage of the continued weakness in TGR to accumulate with the remaining funds I had from the sale of CSS. I was holding some in reserve just in case CSS could turn it's business around, sadly, this is unlikely to happen.
TGR has become compelling value in my opinion and will remain my one and only exposure to the listed aquaculture space.
Despite weakness over the past year or so , I am of the view that this trend will reverse over the course of this year and beyond as TGR expands it's domestic and international markets.

Note - I am a holder of TGR ( Long Term ).
All my opinion only, DYOR. My opinions are not based of any particular facts just my own investment research and principles of value investing.

 

[Bean0]

The TGR letter to ASX today that the CEO has sold down about 25% of his holding may have some bearing on things. Lets hope no info, surrounding that sale, leaked out early - but one never does know??. It would appear logical to me that an individual may need to balance their asset portfolio from time to time. More likely that the CSS issues have depressed the sector generally.

 

[Rainmaker2000]

This is an ongoing issue Mr Ryan appears to have......being a victim of his own success

From memory, the company gifted him 400 000 shares a few years ago......and the poor bugger has to keep satisfying the ATO around this time each year......I have a good education in tax law but I don't understand why this time each year

Anyway, as a large shareholder, I would be worried if Mr Ryan sold is stock at good times.......eg. when stock was 3 or 4$.......but his timing on the price has been just diabolical......and its not like he tries to pump share price......so I conclude.......its just an honest sell

Investors need to keep in mind that a director buying pretty much always is a good sign........but selling is unclear as directors are by necessity net sellers of stocks on the stockmarket since they usually pre acquire them before listing

 

[jojoventure]

TGR, a conservatively leveraged, low PE company with a 5 yr growth plan still in place, which seems to be on track.

Why is the stock price so low? is the market irrational, or is there something else behind this.

Is the company too traditional for the market of 2010 and yrs to come ?
Will it rebound or will market players never be able notice this company?
Is there any bad sentiment or anything residual from when the company went in receivership in 2002?

Just some of the questions that I have been asking myself lately.

Oh also, will Mark Ryan, The CEO stay on for years to come or will he give in eventually?

 

[Bean0]

It appears to me that agricultural stocks (& TGR tends to get lumped in to this category for some strange reason) seem to be on the nose at the moment. NUF is another classic example that appears to be way undersold - I know the glyphosate over supply is a problem but, with all the old high cost stock gone and everyone now buying inputs at a lower cost, the margin will be back on track - sure volume will be down but that only requires a matching reducion of scale overheads. ELD & AAC also have had their problems, and in deed would be much more problematic than well run companies like TGR & NUF.

The fact that TGR don't see export as a core market is often a worry, however many intensive farming sectors in Australia operate on the same assumptions. They find it difficult to generate stable long term relationships and sales in OS markets - different social cultures and 'norms', currency fluctuations, quarantine issues, geographic barriers, etc - issues that don't pose such a problem in the domestic market.

Disclosure: I hold TGR & NUF

 

[oldblue]

Added to which, problems with Clean Seas Tuna doesn't help perceptions of fish farming as a stable, profitable business. Nothing to do with TGR, but there it is!

 

[pistol72]

some food for thought! a couple of weeks ago tassal had a write up in the local rag saying that they were going to produce canned salmon,produced from pt lincoln(SA)with a few pics and other general info re hatching facility ect(from memory).
why canned fish?maybe excess stock? supply outstriping demand?quality of fish in decline?(as in deformed and not good enough for portions or smoked).
genuine opportunity for growth?better margins?.will be interesing to see if the product gets to market,how its promoted.might give tassal some exposure.be lnice to get some other opinions.
fwiw,the employee carpark has been full during the day when ive passed and they are still running a small nightshift about a 1/4 to 1/3 of the daytime shift.the extension(decent size) looks to be getting used now, perhaps another smoker and more coolroom space.
as for the share price,it hasnt looked good for a while, the break below1.7 was extremely bearish,decending triange on the weekly had been penetrated then retested the ol support and as of yesterday had its lowest close in a couple of years.projected target of 1.1(medium term).P

 

[jojoventure]

some food for thought! a couple of weeks ago tassal had a write up in the local rag saying that they were going to produce canned salmon,produced from pt lincoln(SA)with a few pics and other general info re hatching facility ect(from memory).
why canned fish?maybe excess stock? supply outstriping demand?quality of fish in decline?(as in deformed and not good enough for portions or smoked).
genuine opportunity for growth?better margins?

I am not sure if you are talking about the same kind of canned fish, but canned salmon is already available from Tassal on a quite large scale. And its actually of the best quality, I have compared it to johns west and Paramount, and its actually much tastier and it has no bones or skin. It is made in tasmania, and it goes for about $ 0.50 more than the competitors.

I was also checking out the fish market yesterday, and looking at its competitors. Huon fisheries also had smoked salmon on sale, and from the box seemed like a very similar product to Tassal (they were next to each other) I am not sure about the provenance of the fresh Salmons(No tags) but the fresh ocean trouts on sale (similar to salmon) was from Petuna, its other direct competitor.

With the Aquisition of Premium gold, TGR market for smoked salmon is pretty dominant.
I am just wondering if they will start a Marketing campaign on national TV and newspapers, that would certainly also enhance their dominant position. Maybe later.

Oh I also hold TGR, for the LT

 

[pistol72]

cheers JJ
i must be a bit behind the times.i have not seen the canned fish in our local supermarkets or any promotion in the media.quite suprising really.
glad you liked the product,did they have many varieties?as for there competitors,i would suggest trying both products and petunas(smoked).down here the huon product is nearly twice the price on the shelf as tassals.
P .i dont hold

 

[Tysonboss1]

Just wondering why the sp is heading south?
I am a small holder and new investor is Tassal out of fashion, too capital intensive or viewed to have limited growth potentual?

I have started buying TGR. Based on my analysis I have valued it at $1.52. and am accumulating at under this level.

At $1.52 it has a decent chance of offering an above average return for the next few years based on divdend and growth from reinvested earnings not paid out as dividends.

There is a posibility that it could trade as high as $1.90, people buying in at this level have a good chance of only seeing an average return over time, and should expect periods where the share price remains lower than their entry level (+plus expected return) for some time.

Any who purchases this stock for more that $2.00 based on current earnings and growth rates will achieve a below average return over time. at this price return will be mediocre / poor at best. and you should see the price linger under your entry level( + expected return) for long periods of time.

 

[tge oracle]

It looks like someone ( PEP ) has finally acknowledged the intrinsic value of TGR. Although the offer may appeal to some investors , in my view , it is opportunistic and long term investors would be far better served by TGR refusing the offer. There is substantial upside for all food producing companies, particularly aquaculture, over the coming years/decades and long term TGR investors will be well rewarded for their patience, I do concede however, short term investors and those requiring funds may find the offer appealing.

 

[Tysonboss1]

There is a posibility that it could trade as high as $1.90, people buying in at this level have a good chance of only seeing an average return over time, and should expect periods where the share price remains lower than their entry level (+plus expected return) for some time.

It looks like someone ( PEP ) has finally acknowledged the intrinsic value of TGR. Although the offer may appeal to some investors , in my view , it is opportunistic and long term investors would be far better served by TGR refusing the offer. There is substantial upside for all food producing companies, particularly aquaculture, over the coming years/decades and long term TGR investors will be well rewarded for their patience, I do concede however, short term investors and those requiring funds may find the offer appealing.

It was pretty interesting announcement,

Based on my analysis I identified the price of $1.90 as being the most that could be paid if the investors was to have a fair chance of receiving a sound return on investment. And this figure is also the upper limit the pacific capital have placed on their bid.

I think $1.90 would be a fair price for the company as it stands today. but I wouldn't sell, because as you mentioned it is a great little company and I would much prefer holding tassal stock as a sound investment than holding a fist full of dollars.

 

[oldblue]

WBA's holding of 20.5% in TGR is the key to the success or failure of PEP's bid.
No statement from WBA yet but at the recent AGM approval was given to directors to sell these shares. I wonder if they have been talking to PEP - yet?

 

[UMike]

WBA's holding of 20.5% in TGR is the key to the success or failure of PEP's bid.
No statement from WBA yet but at the recent AGM approval was given to directors to sell these shares. I wonder if they have been talking to PEP - yet?

Ahh well

And here it is then

Sale of Tassal Group Limited shares
Webster Limited today announced it has entered into a share sale agreement under which it has
agreed to sell its 19.8% holding in Tassal Group Limited to Pacific Andes Resources Development
Limited. The sale price is $1.79 per share. Completion of the sale of shares representing 14.9% of the
holding will take place on 7 January 2011, with the balance of the sale to complete following receipt
of all necessary approvals required under the Foreign Acquisitions and Takeovers Act.
Sale of shares in Tassal Group Limited was approved by shareholders at the October 2010 Annual
General Meeting of Webster Ltd.

 

[Gnomes of Aussie]

Did anyone of you guy know why Webster refuse to sell their Tassal to Pacific Equity Partner in $1.80 to $1.90 per share but agreed to PARD in $1.79?

 

[Tysonboss1]

Did anyone of you guy know why Webster refuse to sell their Tassal to Pacific Equity Partner in $1.80 to $1.90 per share but agreed to PARD in $1.79?

Perhaps they were happy to take a slightly lower price in return for dumping the entire holding in one transaction, also it was $1.79 was a decent premium to it's trading value before the offer.

 

[oldblue]

WBA have been trying to sell their stake for a while now. Shareholder approval was given to directors to do this at, I think, the last AGM.

My impression is that they had a sale to PARD firmed up before the PEP deal came along and may now be committed to it.

 

[tge oracle]

Following on from my earlier post, I fully endorse the decision by TGR Management to pursue with their own strategic plan to 2015 rather than sell out to opportunistic entities at well below intrinsic value .

This decision will ensure maximum value is achieved for long term investors.

Investors wishing to crystallize their capital may be disappointed though

 

[Tysonboss1]

Following on from my earlier post, I fully endorse the decision by TGR Management to pursue with their own strategic plan to 2015 rather than sell out to opportunistic entities at well below intrinsic value .

This decision will ensure maximum value is achieved for long term investors.

Investors wishing to crystallize their capital may be disappointed though

Agreed, But I don't like that they cancelled the dividend because of all this strategic review B/S. No that it's over they should have to pay a special divvy to make up for it.

 

[UMike]

Agreed, But I don't like that they cancelled the dividend because of all this strategic review B/S. No that it's over they should have to pay a special divvy to make up for it.

fully agree to this. This is a long term dividend investment for me and I can see no sense for it to change that. esp if there is not an adverse reason for it.