Produce Share Discussion Threads

[mctmct] 22/9/2014 10:01

Battlebus

Lack of liquidity is also a risk, if you decide you want to sell. It means that you can't assume that the Bid gives you any realistic view of the value of your holding, and the more shares you have, the bigger the relative risk.

mct

[battlebus2] 19/9/2014 10:13

Yes very tightly held, if you want size they want a premium. A good signal imv.

[shanklin] 19/9/2014 10:09

Can't get an online quote with HL to buy 1k currently. 750 available at 292.

[battlebus2] 19/9/2014 09:59

Thankfully a no vote in Scotland last night, a win win though i believe.

[battlebus2] 17/9/2014 14:24

Been buying a few thanks to chizgreen for mentioning.
£3.50 seems a reasonable target, results on the 26th I think.

[mctmct] 21/8/2014 15:32

"up to a point, Lord Copper" (quoting Boot, in Scoop).

Obviously, not all price sensitive information is disclosed immediately, otherwise there would never be a price movement on the basis of the contents of an IMS or half or full year results, (because they couldn't contain any information that moved the price other that things that had only happened the previous night!)

The company has some discretion about delaying the release of inside information. See hxxp://www.out-law.com/page-8300.

[shanklin] 21/8/2014 14:36

LOL, if it was price sensitive, they would be obliged to announce it immediately.

[mctmct] 21/8/2014 14:29

Price sensitive information in the close period - so I can't see how they could answer.

[chizgreen68] 21/8/2014 13:05

No evidence other than that the price has not been marked down, I saw that some other producers have been marked down by MMs. Might be worth a call to PIL if you are very concerned.

[mctmct] 21/8/2014 13:04

Thanks, Chiz. What's the evidence that there's no impact? I'm nervous that something may be said in the Final Results that will sound like a profit warning.

[chizgreen68] 21/8/2014 12:56

I asked myself that question, it appears no impact on share price from the sanctions

[mctmct] 21/8/2014 12:19

Does PIL have any significant exports to Russia?

[chizgreen68] 18/8/2014 09:20

Yup, I like it quiet and happy to hold on the same basis you are.

[shanklin] 18/8/2014 08:27

Very quiet here. Bought a few on Friday as it looks quite cheap.

All IMHO, DYOR.

[chizgreen68] 24/7/2014 12:19

Found this on a screen over the weekend and now bought in. Seems like a bit of a bargain???

[mach100] 06/6/2014 22:23

Hmm I am in too Lanza. I think the sell though small, weighed a little on the share today. The acquisition is good and I expect it will add about 25% to the bottom line. It is also immediately earnings enhancing. Hopefully this should push through 300p and I like its dominant player position, cemented by the acquisition.

[lanzarote666] 05/6/2014 19:04

Happy to pick up some of the shares sold by the non-exec Director yesterday. He sold 4,000 of his 111,000 holding so probably paying for the summer holiday!

I like the new acquisition, p/e of 6, dividend payer and there is sunshine and showers in the forecast. Would somebody please remind me to sell when it pours with rain for weeks on end!

Cheap as chips



:-)

[mach100] 16/5/2014 19:44

Quite a good update apart from the news about people losing their jobs in Tern Hill. I am always miffed when they exclude PI's from the placing. I think this will head to £3 as the acquisition is immediately earnings enhancing and should add 25% to profit. A Spud-I-like company!

[mach100] 01/3/2014 12:55

Hope we have news soon on the bid situation. I also hope the bad weather hasn't led to a second bad harvest.

[cyfran101] 09/1/2014 20:44

IC Sector Review:

Whatever side of the gatepost you're on, this debate is part of the much wider and critical issue of food security, and what is undeniable is that production must become more efficient if we are to meet rising demand for food from a rapidly multiplying global population. This is where investors stand to make appetising profits.

Demand for cereal is set to rise by almost 50 per cent by 2050 to feed the extra three billion people on the planet. And as people in emerging markets become richer they are demanding more protein, usually in the form of meat, too. At the same time, food supply is becoming increasingly constrained because of limited land availability, lower water supplies, adverse climate conditions and an increasing use of arable fields for bio fuel and animal feed rather than crops for food.

In fact, raising animals for food already uses a third of the earth's arable land mass, according to the United Nations, and producing meat is both inefficient and expensive. It takes three kilogrammes of grain to produce just one kilogramme of meat. So, with the proportion of cereal used as feed estimated to reach 45 to 50 per cent by 2050, not only must crop yields rise and costs fall, but alternatives to traditional feeds must be found.

Fortunately, there's certainly scope for innovation here after three decades of chronic under-investment in agricultural research and development. Yields have stagnated for cereals, partly as a result of declining investment, while a lack of spending on food technology has wiped out productivity growth in the UK, too. Take dairy farming, where the top one-third of UK farmers are twice as efficient as the rest. Similarly, the cost of growing wheat for the top 20 per cent of wheat farmers is £100 a tonne, while for the bottom 20 per cent, it is £160 a tonne. Wheat yields, too, have the potential to increase by 30 per cent by some estimates. The companies that facilitate this, from the processors to the seed, feed and fertiliser manufacturers, will be well positioned to benefit.

Phil Carroll, analyst at Shore Capital, calls this sweet spot the "value gap". While prices in the main commodities have retreated from their highs to a new price plateau, Mr Carroll says he's not interested in the commodities themselves, but the companies that add value to help meet demand, which is where the real opportunity lies.

In the small UK-listed agri-food sector, Aim-listed Wynnstay Group(WYN) stands out. It has a 14 per cent share of the UK seed market and is steadily increasing revenue and profit, while expanding geographically and making acquisitions. It develops feed products and healthcare supplements for livestock, but is also involved in all the areas of crop production, supplying seed, fertilisers and crop protection products. Boss Ken Greetham predicts a massive market for agricultural products over the next 30 years. "We have limited land and water and can't do much about that, but we can do a lot with technology and that has been lacking in our industry," he says. Companies in the sector are finally redirecting investment towards research and development, he adds, while the outlook for UK agriculture and exports is at its strongest since the 1940s.

NWF(NWF) is another domestic player. It now feeds one in seven dairy cows in Britain, investing in animal nutrition research projects to improve farmers' profitability. Meanwhile, Carr's Milling Industries (CRM) operates a diverse business model, manufacturing speciality feed and fertilisers as well as specialist machinery and fuel. For extra diversification, it processes and sells cereals to bakers, food manufacturers and retailers.

Then there are a suite of global giants which dominate the business of feed ingredients and crop nutrients and protection such as Mosaic Company (NYSE: MOS), Nutreco(AM: NUO) and Agrium (TSX: AGU). US-based Archer Daniels(NYSE: ADM) is developing alternatives to traditional cereal-based feeds that can transform crop residue into a nutritious feed source, squeezing more value out of every acre. This is particularly important in bad crop years and expands capacity without requiring additional land.

Indeed, crop protection, fertiliser, seed engineering and nutrition is now big business, but sustainability is becoming an equally important factor as farmers are increasingly demanding less environmentally harmful crop treatments. Chemical giant BASF(GER: BAS) recently paid $1bn (£651m) for Becker Underwood, which develops yield-improving biological products that stimulate plant growth with fewer chemicals. Bayer 's (GER: BAYN) CropScience business shelled out nearly $500m to acquire AgraQuest, which also offers the so-called 'green products'.

Smaller companies such as UK-listed Plant Health Care (PHC) are also active in this space. In addition to organic fertiliser, it makes proteins that stimulate a plant's immune response, thereby increasing yields. The business strategy is to license this technology to bigger players. In 2008, it signed a deal with Monsanto (NYSE:MON) and a recent tie-up with Arysta LifeScience will see Plant Health's main product, Harpin, sold with branded fungicides in the US in 2014.

Elsewhere, pork specialist Cranswick(CRW) is experiencing high demand for meat, both at home and abroad, helped by the lower cost of pork relative to other meats. Recent European Union rules forcing continental pig farmers to up their welfare standards has also levelled the playing field and given Cranswick a boost. In addition, it has just bought East Anglian Pigs, an outdoor pig farm, suggesting Cranswick sees significant scope for growth here. Indeed, the UK is only 50 per cent self-sufficient in pig meat, while UK and European herds are in decline.

IC VIEW:

In Britain, food self-sufficiency has declined over the past decade to 59 per cent and the weather has caused havoc for farmers - last year's washout means Britain is likely to be a net importer of wheat for the first time in a decade. Yet cash-strapped Brits still demand cheap food and prefer to buy British. And, with global consumption rising, high food prices and finite resources, innovative technology to drive efficiency and boost yields will be vital to prevent demand from outstripping supply, playing into the hands of companies that help farmers maximise productivity and process their goods. This is something bigger players are picking up on and vying to gain exposure to - Glencore's recent acquisition of Canadian grain handler Viterra is a case in point. True, many of these companies will suffer short-term bumps along the way, inevitable given the nature of agriculture, but the evidence suggests that, for those of you willing to take a long-term view, investment in this sector will pay off.

FAVOURITES:

Carr's Milling is one of our long-standing buy tips (875p, 3 May 2012). It has recently seen extra demand for specialist animal feed due to poor grazing conditions and, trading on 10 times forward earnings, is below the peer average of 13. We also like Swiss giant Syngenta (VTX: SYNN), a leader in crop protection and seed supplying. Its shares have risen 11 per cent on our buy tip (335CHF, 16 Aug 2012). Rising grain prices have helped and a forward PE ratio of 16 means it's cheaper than peers Monsanto and Bayer, too. Produce Investments (PIL) recently reported a half-year loss of £1.2m, but this was largely down to last year's unseasonably wet weather. The underlying business model is sound and the shares could be worth snapping up at an all-time low of 135p, rated on a cheap five times forward earnings. It's worth keeping an eye on Canada's Agrium, too. The vertically integrated company mines its own nutrients and offers growers across the Americas crop production services through its retail unit. Buying the bulk of Viterra's agri-products business from Glencore beefs up its retail presence in Canada and Australia.

OUTSIDERS:

Plant Health Care has some innovative ideas and is cash-rich, which should help fund further development of its promising third-generation plant treatment products. But it's still early days and the company is not yet profitable - last year it reported a loss of £4.2m and revenue has been falling since 2008.
BROKER VIEW:

Agriculture as an investment

Year on year, harvests will vary, the rain will come and go, making the supply side of large elements of agriculture unpredictable and volatile. However, prices are a function of supply and demand and the latter has followed a new upward trajectory in recent years. While many in the West seek to reduce their calorie intake, there are many new tummies in the East seeking nutrition and not just rice-based diets. Such demand is driving up long-term agricultural prices and with it the cost of land, inputs and outputs.

Investors have identified this equation with inflows to global agriculture and with most farm-related stocks enjoying a re-rating. On the agri-input side, Plant Healthcare is bringing improved productivity to crop yields in the Americas through its 'Harpin' innovation, while Wynnstay is adding value through seeds, feeds and fertilisers to British farmers. Produce Investments, a leader in the UK potato market, recently extended its geography for production to the south-west of England plus entry in the fresh flower market, with the prospect of more to come. The Real Good Food Co. has developed a strategically important low-cost supply of cane sugar from Omnicane in Mauritius.

Further up the food chain, Cranswick started life as a Yorkshire farming enterprise and is now a fast-growing market-leading value-added food processor, now exporting to Australia, China and the US. Analysis from Sion Roberts, director of the European Farming and Food Partnerships, shows how 'value added' in agri-food has entered a new higher-value phase. Tim Smith, Tesco's technical director, has outlined its plans for a simpler supply chain, with fewer intermediaries and ultimately more product and value added for the UK farmers and growers. From the strong domestic scene to medium-term global context, the small but well-formed and growing UK-listed agri-food sector remains an attractive investment opportunity.

Clive Black and Phil Carroll, analysts at Shore Capital

[cyfran101] 09/1/2014 20:42

I felt this share deserved an arena for debate and shared information. I was surprised there wasn't one for an agricultural share.

[cyfran101] 09/1/2014 20:15

hxxps://www.produceinvestments.co.uk/


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