Dipping Into Water Stocks
The dry conditions in many of the key farming regions highlight the importance of water security for our listed agricultural plays. When it comes to water rights, some are in a better position than others.
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News
Has Select Harvests Gone Nuts?
Just as we start to believe we have seen everything, all of a sudden a company takes us by surprise. Take the recent decisions by Select Harvests, for example.
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Select Harvests Rejects UAE Takeover Bid
Just as Accord is attempting to ‘hug’ Mantra with a fat ‘non-binding, indicative offer, so an attempt to try and inveigle Select Harvests the same way has failed for a Middle Eastern investor.
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Almonds Very Tasty For Select Harvests
Another mid cap with a solid interim out yesterday was Select Harvests (SHV) which boosted underlying profit 17% to $21.5 million for the six months to December.
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Harvest Time: Select Harvests Has Wide Support
Everyone likes almonds, but surprisingly few countries produce them in commercial volumes. This skewing of production is either a positive for local producers or maybe the opposite if they have to compete with the most producers with the greatest market clout which work together under the aegis of Blue Diamond, the century old Californian almond co-op and marketing exchange.
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Analyst Views
SHV – Morgans rates as Hold
FY18 results materially missed forecasts because of a lower almond price. A record US almond crop and the trade tensions have caused the price to fall recently. Select Harvest's FY19 crop estimates are up 7.8% on FY18.
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SHV – Morgans rates the stock as Hold
Morgans believes the company should achieve at least the top end of its pool price estimate of $8.10-8.50/kg, reflecting positive industry fundamentals and a falling Australian dollar. Morgans upgrades forecasts, given the company’s strong operating leverage to rising almond prices.
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SHV – Morgans rates the stock as Reduce
The company has issued materially lower guidance for FY17 net profit because of a lower Australian dollar almond price and cost pressures. Morgans consequently downgrades FY17 net profit forecasts by -40.3% and makes material revisions to FY18 and FY19 as well.
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SHV – UBS rates the stock as Neutral
The company has made some small adjustments to its expectations for FY17. Almond production guidance is 15,500-16,000 tonnes, marginally lower than UBS forecasts, and recent pricing is $7.50-8.00/kg.
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SHV – UBS rates the stock as Neutral
FY16 results were "reasonably good" UBS observes. The food division has hit its 2018 target of $10m EBIT two years early.
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