• Australian (ASX) Stock Market Forum

Hello and welcome to Aussie Stock Forums!

To gain full access you must register. Registration is free and takes only a few seconds to complete.

Already a member? Log in here.

SHV - Select Harvests

Discussion in 'Stocks Q-Z' started by Ken, Oct 27, 2006.

  1. Ken

    Ken

    Posts:
    1,195
    Likes Received:
    0
    Joined:
    Aug 22, 2005
    SHV are looking at double digit growth with a 63 cent dividends...

    the stock looks like a must buy.

    Is the sector out of favour at the moment.

    they detail in almonds and orchards.
     
  2. watsonc

    watsonc

    Posts:
    155
    Likes Received:
    0
    Joined:
    May 9, 2006
    Re: SHV

    Wouldn't drought be a problem for these guys? Or don't they have water shortages? and thus can cash in on rising prices!
     
  3. TheRage

    TheRage

    Posts:
    219
    Likes Received:
    0
    Joined:
    Oct 18, 2006
    Anyone know why this stock is down 14% at the moment. No announcements, and daily volume was 500,000 compared with average of 19,986 :eek: . Seems like some panic selling happening.

    I have been watching this stock for some time and fundamentally this is one solid little gem. ROE consistently around 20 and Net profit margin average around 15%. Shares Outstanding have remained fairly consistent with little growth over a 10 year period giving value to shareholders. At $11.30 dividend yield is approaching 5.5% on last years earnings so if earnings are greater the yield will be even better providing dividend payout ratio is kept the same. I don't normally invest in stocks which can be affected by the weather but given the companies strong management and ability to generate cash and not to mention very little debt I have been tempted. Interim report is not due for another 2 weeks so I am wondering if someone has been leaking some bad news or is this simply a 'put on your shelf stock' that everyone is bored with when there is free money being made elsewhere. Any thoughts?
     
  4. Judd

    Judd

    Posts:
    1,048
    Likes Received:
    0
    Joined:
    Jun 10, 2006
    Caught in the tax ruling disallowing upfront tax deductions for agri managed investment schemes from 1 July?
     
  5. GOYCO

    GOYCO

    Posts:
    46
    Likes Received:
    0
    Joined:
    Nov 19, 2005
    The question is " how much does this affect the company? and what alternatives are in place to continue growth?" The management have been very soiid in the past, can they come up with something else for the future?

    IMO I still think it is a good company, Should still grow at 15% p/a, not bad

    cheers
     
  6. michael_selway

    michael_selway Coal & Phosphate, thats it!

    Posts:
    2,397
    Likes Received:
    0
    Joined:
    Oct 20, 2005
    Was there a bad annoucment?

    Earnings and Dividends Forecast (cents per share)
    2006 2007 2008 2009
    EPS 77.9 79.9 93.5 115.0
    DPS 63.0 64.9 72.0 81.0


    thx

    MS
     
  7. TheRage

    TheRage

    Posts:
    219
    Likes Received:
    0
    Joined:
    Oct 18, 2006
    No bad announcement from the company. As Judd said above the government has abolished up front deduction that all MIS companies were receiving. From what I can understand is that this will impact cashflow but probably not growth.
     
  8. GOYCO

    GOYCO

    Posts:
    46
    Likes Received:
    0
    Joined:
    Nov 19, 2005
    Business as usual IMO.will just have to find other ways to finance future plantings etc. Pretty safe for the next 3 years I'd reckon
     
  9. michael_selway

    michael_selway Coal & Phosphate, thats it!

    Posts:
    2,397
    Likes Received:
    0
    Joined:
    Oct 20, 2005
    What stocks are affected by this new MIS ruling?

    SHV, GTP, TIM?

    what about FEA?

    thx

    MS
     
  10. surfingman

    surfingman

    Posts:
    446
    Likes Received:
    0
    Joined:
    Dec 3, 2006
    Anyone watching this stock has had a approx 17% down turn since i have been watching, any ideas on the extent the new taxation laws will effect the companies share price?

    I'm considering buying in but have not decided at what level, looks like the company has excellent long term growth.
     
  11. GOYCO

    GOYCO

    Posts:
    46
    Likes Received:
    0
    Joined:
    Nov 19, 2005
    Surfingman

    As always DYOR. But the usual indicators. P/E ratio. EPS growth. Dividend yield. etc make a fairly compelling case to buy IMO. As far as MIS goes it's highly likely that there will be a transitional arrangement. Also the ATO will have to prove their decision in a court case challenge. Hard to argue that something that has been legal for 30 years is suddenly illegal. Either way it's going to be interesting.

    Just my opinion

    cheers
     
  12. Brengun

    Brengun

    Posts:
    31
    Likes Received:
    0
    Joined:
    Dec 27, 2006
    For those of you interested SHV has had a low so far today of $8.19. You'd have to be quick though as the company has just announced a buy back of 2.5 million shares at market.
     
  13. brilliantmichael

    brilliantmichael

    Posts:
    84
    Likes Received:
    0
    Joined:
    Aug 16, 2007
    Is that another 2.5 million? Looks like a nice strategy with the stock price falling the way it is. Always liked SHV since it's ratios are excellent, it's cash flow rich, and it looks like there's transparent management. Just wish they gave us a clearer picture of the risks though.

    Looks like the uncertainty over MIS laws, the drought, and the bumper California crop (which will dampen almond prices) are weighing on sentiment, plus the overall market sentiment is dragging on smaller 'unknown' issues - continuing the trend towards "safety" [even at the expense of moving into overpriced safety IMO. This one isn't at all risky though IMO (barring weather, climate etc.) due to the quality record, and long term outlook.

    PS: Who do you think is dumping?
     
  14. michael_selway

    michael_selway Coal & Phosphate, thats it!

    Posts:
    2,397
    Likes Received:
    0
    Joined:
    Oct 20, 2005
    It looks liek not much growth forecast for teh next few years

    Earnings and Dividends Forecast (cents per share)
    2007 2008 2009 2010
    EPS 70.8 75.4 70.1 72.1
    DPS 57.0 57.0 57.0 55.0


    thx

    MS
     
  15. brilliantmichael

    brilliantmichael

    Posts:
    84
    Likes Received:
    0
    Joined:
    Aug 16, 2007
    Hi, how low do you think this one will go? This one's a beauty if any of the past record is to go by. Despite drought, MIS tax changes etc, they're still ready to go from 3800 acres to 10000, and have managed to maintain profit flat for the year... Certainly don't know what to do with their excess cash (hence buybacks).

    Depth is very shallow. Lots of little sellers, not many buyers at all (except the buy-backs).

    Counter-intuitively people are still selling their little parcels in snibbets even as they're being bought back by the company. Is there an institutional sell-off? Maybe not to their taste for "risk profile".

    Waiting for a good buy-in time (a hypothetical exercise assuredly), looking at at least a couple of thousand purchases (too little buy-in depth atm). Any thoughts?

    -----

    PS: IMO "Risk" is unquantifiable, since you cannot use historical inferences to calculate a quantifiable probability into the future (except for predictable, regular things like car accidents or house robberies. Secondly, "future cash flows", a.k.a. "forecasts" are also unreliable, since they involve many factors (macroeonomy, market conditions etc) that are also unquantifiable. Instead, all that can be "predicted" is the resistance and strength of the business to threats (in this case, the climate, water availability, the almond market outlook [which isn't really a threat!], etc etc.) which is admittedly mostly guesswork - But the 'strength' of the business is more or less determinable. A Graham quote: 'You don't have to know the weight of somebody to know he's fat!' My 2cents
     
  16. Rainmaker2000

    Rainmaker2000

    Posts:
    376
    Likes Received:
    0
    Joined:
    Sep 8, 2007
    Must confess I've been a buyer of select harvests and think today's prices will be a bit of a steal in next few years from a fundamental valuation perspective anyway.......in the shorter term, there are a few volatile factors which should not be underestimated.......1) MIS ruling 2) Supermarkets move to private label.....there's been a whole lot of talk about Select not being affected too much by MIS, which I think is nonsense, they are the key drivers of the current industry framework..Having said that, I think they will thrive post MIS cause its a growth industry and Select has a formidable position..I don't think the stock will rally until it is plainly obvious to the market that Select can do without the current MIS arrangements.....on their intellectual property and branding side, they are suffering with the supermarkets private labelling and competition intensifying, I think this is a limited threat as the supermarkets themselves need someone to do their private labelling....this is something Greens Food had to deal with.......I like the whole sector actually, especially TIM which owns over 10% of Select
     
  17. surfingman

    surfingman

    Posts:
    446
    Likes Received:
    0
    Joined:
    Dec 3, 2006
    Aren't there a large amount of the acreage for Almond orchards on the Murray River Basin?

    My biggest concern is the irrigation restrictions and the drought for select harvests future crops, is this also a concern for you rainmaker?
     
  18. niknah

    niknah

    Posts:
    93
    Likes Received:
    0
    Joined:
    Jul 20, 2006
    Alot of those acres that are going to harvest in the next few years are ones they manage with MIS and only make a commission from.

    Agree with the private labels, I've tried their supermarket cereal but prefer the cheaper home brand ones.

    I thought it was the bottom when the chairman brought $1mill earlier for $10 but it just drops more.
     
  19. Rainmaker2000

    Rainmaker2000

    Posts:
    376
    Likes Received:
    0
    Joined:
    Sep 8, 2007
    I've been a little concerned about drought with this sector but I've been very surprised with how little the impact has been.... I think its because these 'corporate farmers' as opposed to farmer Joe have a lot of bargaining power and are best practice operators so they usually base their operations on an underground water source or licences......even if drought conditions are permanent, companies like Select will do better than competitors and farmer Joe.....and the whole industry will just pass the 'new' prices onto consumers

    Nickah, are you trying to find the bottom....my understanding is that they have forecast about flat earnings so if its going down as it is, it either indicates the insiders know of a future downgrade or its just cyclical trading....either way, all you can do is put your own value on the thing and I think its worth a lot more than 8$
     
  20. brilliantmichael

    brilliantmichael

    Posts:
    84
    Likes Received:
    0
    Joined:
    Aug 16, 2007
    It looks like a big seller is trying to get rid of their stock - it's just that there ain't a lot of buyers (hardly any depth at all).

    Question:

    Is the share price plummetting just because there's a big seller? It wouldn't seem probable that the downward trend would continue so consistently if it were panic/trader selling. In any case SHV is hardly a volatile stock.

    Any inside info?
     
Loading...

Share This Page