Namoi Cotton Co-Operative Limited (NAM) is one of Australia's largest cotton organisations with an extensive network of ginning, marketing and logistics operations. NAM operates fourteen cotton gins throughout NSW and QLD and has three warehouse complexes. Approximately 90% of the cotton purchased by NAM is sold to overseas markets, primarily to Asian spinning mills.
P/E 5.34 div 8.9%
As you know the oil price keep on going up as well as the price for oil company like WPL, STO. The cotton is one of major materials for fabric and Clothes industry.The other is chemical fiber. they can be alternative for each other.
chemical fiber is made from Oil. as the oil price doubled in this year,the Chemical faber price also increased. The spinning mill will use more cotton to replace Chemical fiber. which will push the cotton price to new high in medium future. 1 to 3 years.
NAM is buying back its shares on market, which shows the good quality of this company. It also could be a potential acquisition target for QCH.