TGR - Tassal Group

[Klogg]

Can someone with more experience explain to me how free cash flow works with TGR, I usually use "Payment for Property Plant & Equipment" as a proxy for Capex, but with TGR this amount is only slightly less than Operating Cashflow, meaning that I end up with very little free cash flow in comparison to EPS.

Normally I would see that as a big red warning, but I think in this case its actually not capex but the lease costs - regardless it has a very big impact on FCF!

I have some other more complex formulas I use for FCF and they also generate very low numbers.

I suspect there is something about a commodity producer in agriculture that I am missing here?

You need to figure out what how much of this is maintenance capex, and how much is capex building beyond current capacity.

Keep in mind they have a 3 year fish cycle and 5 year capex cycle (from memory). So as a very rough approximation, the capex 5 years ago is the maintenance cost of today.
There are better ways to go about calculating it, and I know a few years ago they gave a figure for this. But it's a start. Other factors to keep in mind:
- the seafood acquisition does muddy the waters
- they raised capital to expand whilst conditions remain favourable (more capex required)

 

[galumay]

You need to figure out what how much of this is maintenance capex, and how much is capex building beyond current capacity.

Thanks Klogg, yes, I think thats a bit beyond my simple ability! I am beginning to think I dont understand this business well enough to be a part owner!

 

[Wysiwyg]

I think the comm. has finished here so my obs.. TGR caught my interest with the extended narrow range. My most recent research revealed the world wide salmon sea lice infestation. I don't know if it has reached the Tassie stocks with the advantage of distant cleaner water. Price supported around the $3.80 line.

 

[VSntchr]

Pretty astonishing volume of over 4.2m traded today and price down over 10% on the back of JP Morgan cutting their price target from $5.00 to $3.43.
Yes precisely $3.43

 

[Calvin27]

Anyone holding this stock? Bought at mid 3s, currently approaching mid 4s. The last few months have seen a bit o factivity, but I'm not sure what is triggering this.

 

[peter2]

Not holding, but there was an attractive BO setup. The trigger was a close above 4.30.
Price is close to yearly highs. Another attractive aspect.

 

[$20shoes]

TGR gets a bit choppy, but has been holding its ground over last 2 months.
Might be a trade in this one if it can hold over 4.50. Initial target $4.80 but it might be expected to test blue sky highs above 5.10 in a favourable environment.

NB: 4.44 was a significant top in Dec 2007.

DAILY:

WEEKLY:

 

[$20shoes]

Results pleased the market. Was almost gunning for blue sky prices but the breadth of the move would have attracted some profit takers. Time to tighten the stop.

 

[$20shoes]

I was stopped out of TGR trade, but it's looking interesting again IMO

 

[Trav.]

I was stopped out of TGR trade, but it's looking interesting again IMO

View attachment 93794

agreed, maybe it will take another run at $5.10 for a BO then no resistance after that, will be interesting to see how it pans out in the next few weeks.

 

[$20shoes]

My portfolio heat is getting maxed out so there's some trades I'll have to pass on. TGR this week is one.
If my portfolio allowed I'd be interested in TGR this week/next week though, with a BO possible above $5.00. There's been a couple of low volume tests and volume has returned last couple of days to push it up to its $5 resistance level.

It feels like it wants to keep going and there's some reasonable stops available depending on one's trading style.

Could be an interesting one...

 

[galumay]

long term invester here, so i have no view on the TA, but I have held TGR for a few years now and now seeing the gap between price and value close, its definitely getting to the higher end of my range of valuation now. Its not a holding I have ever been totally comfortable with, essentially its a cyclical commodity trader with high capital costs and lots of nasty risks like regulation, climate change, disease etc.

One I think a big margin of safety is required.

 

[rnr]

@$20shoes well called as TGR made a new ath 3 days ago.
Is there enough fuel left in the tank to move the price higher than $5.16?

 

[galumay]

TGR released AR today and also went into a TH pending a CR for expansion of the prawn farming part of the business. First glance the results look great with significant higher margin growth coming from the prawns. Happily retail investors get a chance at the CR, although given the company's performance in the past year, I suspect we will be heavily scaled back!

 

[charlsie]

hello everyone this is my 1st post after introducing myself.I first started buying these shares in 2005 @ $1.18. I work for a company that supplies coolstore panel for them. My thinking at the time was that if they are expanding their warehousing they must be expanding the business. I started to increase my holdings on the dips and was happy with the way they were going until the latest drop. deciding to stick with them as I've always felt they were a long time hold and my buy price is averaging $3.68. im just wondering others thoughts on where it might go from here? I also put my hand up for the SPP. its fantastic to read through the history here too.

 

[galumay]

I decided not to take the SPP up because you can buy them on market for less than the offer price, I continue to hold and I think there is considerable upside with the prawns and expanded fish sectors going forward. There are always 2 significant risks that mean I am only happy to have a relatively small position, one is disease which can have a devastating effect, and the other is just the cyclical nature of a whats really a pure commodity play like TRG. Its certainly the best managed of the aqua-ag businesses and I think with an average price of $3.68 you should sleep pretty well!

 

[barney]

The 2019 results appeared very good, but the SP was sold off conspicuously just before the Trading Halt announcing the cap raise at $4.40

They may need to invest in a tube of spac filler … the dingy appears to have a leak or two

 

[charlsie]

Galumay, correct me if im wrong. Offer (a) is $4.31 minus the 9c dividend = $4.22
Offer (b) is volume weighted 5 day average less a 2% discount rounded down to the nearest cent. A rough calculation based on todays $4.27 close (if it stays around this price till Monday, gives an indicative price of $4.19 per share. I took the offer in the hope and belief that once the dust settles, the price should start heading up. Thoughts?
On a side note, I exited Pilbara (PLS) @ .48c only to see it drop further, then they had a halt and have gone through the same motions. I see they too have a SPP. even if I hadn't sold, I don't think id subscribe to it.

 

[galumay]

I said you could buy for less than the offer price because up to 10/9 you got the 9c dividend as well. Perhaps I should have said, although they are trading slightly above the offer price, you get the 9c dividend if you buy now.

If the price holds up then it starts to look a bit more attractive, but my test with SPP is always whether I would have added to my holding on market at the offered price, in the absence of a SPP - and in this case I would not have.

As I said earlier, with your average buy, you will likely do fine.

 

[charlsie]

im having a crack at the tipping comp and im hoping that in a month that this might move forward a little.