GFF recent share plunge

[snapiti]

share price was range bound between 65 & 70 cents for long time now dropped to 50 cents, on no new info, could this just be a institution re-allocating some funds

[upside_umop]

I have been wondering this myself, Snapiti. This was a pick for the NZX comp for me, and I think it would have pushed me to the bottom of the heap!

Surely things can't be this bad? I haven't done the exact numbers, but the dilution wasn't that much...and the forecasts don't look too bad. Maybe they're a bit optimistic...?

This is a stock I am going to look into and watch management forecasts closely.

[macduffy]

This is a stock I am going to look into and watch management forecasts closely.

Take care here as previous management forecasts havn't been too accurate.

Too many problems with this stock for me, caught in the grip of supermarket buying power/house brands and high raw materials costs.

[winner69]

Good comments on other thread
http://www.sharetrader.co.nz/showthread.php?5852-GFF-Goodman-Fielder&p=357957&highlight=gff#post357957

and today NZ price catching up to Oz from where the shareprice is driven from

[janner]

I work for a company that supplies the Supermarket industry..

THEY ARE RUTHLESS.. ..

GFF is one that I have been following down for over a year now.. Have not bought ..

GFF in my opinion have so many problems built up over the years that it will take quite some time to turn this TITANIC around..

A New CEO from Campbell Soup.. An able man.. Who has seen the problems and figured out the new direction..

My finger is poised over the buy button..

Not yet though !!..

[janner]

Maybe I should have said .. The finger is HOVERING.. Not Poised..

[biker]

My finger hit the buy button today. ( on the ASX)

[janner]

A Brave Man..

The world needs more of them.. :-))

[troyvdh]

....i have no problem trying to catch the odd "falling knife"...but whats the go here.....depend where you look....NTA 0...or $1.30.....EPS...0 ....Div 10 %....yes I know the rules...when there is a recession...buy food power gambling...and yes GFF ...is in our blood....like hokey pokey ice cream.....so ....whats the "upside potential" based on.........

...will this be a repeat of Mr Hart and that spice company who he managed to turn around and make squillions of dollars....

I apologise in advance if the above has already been debated....cheers...

I apologise....the range of EPS...NTA ...DIV...vary greater than I previously thought...."be carefull out there".....cheers...

[percy]

As well as competition from supermarkets home brands I wonder how much Coupeland Bakeries affect them.We buy our bread,cake and pies from Coupelands.Coupeland's stores are always very busy and their Xmas cake was very tastie.

[snapiti]

I have many many scar's from catching falling knives, please to say most of them are old scar's. choose to follow chart trends now which in the case of GFF the charts say stay away. The trend is your friend. I don't take much notice of director or management forecasts either to much smoke and mirrors for my liking.

[upside_umop]

There is an underlying business in this - remember these guys sell to the "home brands."

I haven't read into their reports a whole lot, but I think they understand where the issues have been. The way I see it is in the long run, they must make money. If companies don't get a rate of return covering their cost of capital, they will pull out or not invest further (or they shouldn't!). GFF has been hit with high raw material costs at a time of a squeeze in the wallets, which of course will impact their high end products and force a subsitution to lower priced goods. It's only a matter of time before they get an adequate return on capital invested or else expect to see some more big write downs on their asset base.

Don't worry - I'm not going to buy purely based off management forecasts, I was meaning more that I am interested in seeing how they develop in light of the current share price performance. Does someone know what we don't?

[janner]

My finger hit the buy button today. ( on the ASX)

Good call Biker..

20% rise already.. And my finger is still dithering over the Buy button..

Greed got in the way as usual :-)

[janner]

Well thought out post U.U

Bugger is all that i can say now :-)0

There is still hope in this one yet..

[upside_umop]

Up 12% today on news that a 'foreign raider' is trying to snap up a 10% stake at 60 cents AUD.

http://www.theage.com.au/business/foreign-raider-after-a-slice-of-goodman-fielder-20120227-1tytj.html

Now up 50% off it's lows.

[upside_umop]

Ok. Make that 30%. Biggest one day rise on the NZX for a while...
Now up 74% of it's lows.

[troyvdh]

..to all those who caught the "falling Knife" and bought........well done...very well done....

[snapiti]

what a load of over excitement in the share price 65 cents to 90 cents in 2 days just because someone has taken a 10% stake in the company. thanks to however bought my shares for 88 cents today I believe I will be buying them back in a couple of months for 70 cents

[macduffy]

Some comment on the recent acquisition of a 10% interest in GFF by Viterra.

"M&A weekly
By Tom Elliott

PORTFOLIO POINT: Glencore's reported move on Canadian grains giant Viterra has prompted speculation that local agriculture stock Graincorp could be next.


Graincorp (GNC). Glencore’s reported move on grains mover and shaker Viterra could mean local sitting duck Graincorp is a step closer to being swallowed up.

Following reports of a £3.5 billion ($A5.2 billion) approach to Viterra by the commodities trader, Graincorp shares surged to an early high of $8.74 today, from their usual $7.90-$8 level. It’s on my top-10 takeover list and the reason its shares are up is because Viterra is one of the companies most likely to make an offer for Graincorp.

Interestingly, the Viterra approach is being made not by a larger industry player but by a commodities trader in the process of merging with miner Xstrata. And yet Glencore still wants to buy one of the biggest grain companies in the world, so the ripple effects of this move will impact on the Australian sector.

Firstly, it shows that interest can come from a number of different areas. There’s not much difference in buying and exporting grain to any other raw material – you buy the product, guarantee the price and agree to ship it to the end user – and Graincorp owns the infrastructure, so takeover interest could come from areas we hadn’t expected.

The second factor is that food companies around the world are consolidating and Australia is one of the largest producers of certain parts of the ‘food chain’, as it were. Graincorp is one of the last and largest agricultural businesses left in Australia, so if you want to play the soft commodities takeover angle, this is an excellent way to do it.


Goodman Fielder (GFF). Another interesting soft commodities play is Wilmar’s sudden move onto the Goodman register.

Wilmar now owns 10.1% of Goodman and, from what I hear, is very interested in the company. It will need Foreign Investment Review Board approval to go past 14.9%, but for now Wilmar is at the ‘phony war’ phase, where it’s uncertain as to what will happen next.

If Wilmar is going to buy the company, it’ll probably pay about a third less than it would have had to pay three years ago, simply because Goodman is being slammed by rising raw material prices and falling market share for its products. It’s also uncertain whether a bid will come in the short term.

We’re also hearing a lot of talk from Opposition politicians about restricting foreign ownership of agriculture-related companies. But you have to remember that takeovers aren’t approved on the floor of parliament, so I don’t think any future offer from Wilmar will be such a big issue politically. Goodman is also not a well-known Australian company in the public’s eyes, so I don’t foresee much trouble on that front.

There is a process for deciding these things. If it was a state-owned company, the situation would be different, but Wilmar is a well-known Singaporean company that already does business in Australia.

In the long run, I don’t think a Goodman or Graincorp takeover will push the government into becoming more protectionist. We’ve seen this sentiment in the past, yet foreign takeovers always seem to continue apace."

A separate article in the AFR recently concluded that Viterra, as a commodity business rather than a food processor, is unlikely to be interested in GFF as a whole, but rather might have its sights set on GFF's oils and NZ milling businesses which have been put up for sale by GFF.
I guess time will tell!

[pietrade]

But this news doesn't auger well for markets in general http://www.realecontv.com/videos/europe/default-what-default.html