NUF Nufarm Limited

[gisborne_gold]

How about Nufarm's recent performance?

Up 50% year to date.
Up more than 10% today and a new record high.

[macduffy]

Drought? - What drought? Is this an extreme case of buying straw hats in winter?

[winner69]

Plenty of talk of takeover offers last few weeks ....... $18-$19

Looks like it is all on now

Watch this space

[Scrunch]

And today there has been a trading halt announced. Could be some substance to the takeover rumours

[gisborne_gold]

The Nufarm board is recommending shareholders accept a 30c dividend plus $17.25 per share offer from China National Chemical Corporation. This values Nufarm at $3 billion.

[macduffy]

Long time, no post on the NUF thread.

Company today announced that they expect earnings to be 15% below previous forecast, sending the SP down almost 10%.

http://www.businessspectator.com.au/bs.nsf/Article/Nufarm-says-earnings-to-fall-by-about-15-pd20090616-T2VBD?OpenDocument&src=tnb

Might be a good time to have a closer look at buying a few of these.

;)

[macduffy]

May be worth taking up the SPP - price is calculated on 2.5% discount over 5 days to June 23rd. So the price fall is good in that respect.

But kudos to NUF for putting out a profit downgrade during the SPP offer, not after shares have already been allocated, which a number of companies have done recently.

Well of course Doug Rathbone is selling down part of his big holding in conjunction with the issue, so there is more than the usual imperative to keep the market fully informed.
I think I'll watch and wait for the upturn.

;)

[Dr_Who]

Might be a good time to have a closer look at buying a few of these.

;)

Bought some shares today. Looks too cheap for the med to long term. :)

Cant help myself at these prices.

[soulman]

Good luck Doc. And they say that the SPP issue will be a touch over $10.

I will stick to the rule of not catching this fallin knife.

[Lego_Man]

Good luck Doc. And they say that the SPP issue will be a touch over $10.

I will stick to the rule of not catching this fallin knife.

Ditto.

Apparently Credit Suisse dont believe their earnings guidance and have downgraded them to underperform.

[Dr_Who]

Ditto.

Apparently Credit Suisse dont believe their earnings guidance and have downgraded them to underperform.

Macquarie has a outperform. :)

The agri sector goes in cycles abit like the recent upturn of the commodities sector.

[Lego_Man]

On both our parts - reinforcement bias!

[Dr_Who]

Daily ShareChat: Nufarm

By Jenny Ruth

Wednesday 24th June 2009

The downgrading of expected earnings for Australia-based Nufarm, which has $251 million of perpetual debt securities listed on the NZX, wasn't unexpected, says Aegis Equities Research.

Last week, Nufarm downgraded its profit guidance for the year ending July by about 15% from its previous $A220 million ($NZ276 million) target, citing a sharp decline in glyphosate demand in Australia and the US.

"We have long questioned the company's ability to achieve its stated net profit guidance levels," says Aegis analyst Dane Roberts.

"We expected weaker glyphosate prices and challenges in relocating volumes from South America into other markets to be the key drivers of weakness," Roberts says.

Still he underestimated the shortfall. "Conditions continue to deteriorate as Nufarm moves through the all-important final quarter sales period where a significant portion of annual sales are typically conducted," he says.

He has cut his forecast for Nufarm's net profit from $A209 million to $A190 million, as the company will report it. Roberts treats Nufarm's hybrid securities as debt while Nufarm treats them as equity, paying the about $A20 million annual interest from net profit. Taking this interest cost into account, his forecast net profit is $A169.8 million.

"Despite the downgrade, we view Nufarm as well-positioned to generate solid shareholder returns over the coming years."

BROKER CALL: Aegis Equities Research rate Nufarm as neutral.

http://www.sharechat.co.nz/article/83cb4796/daily-sharechat-nufarm.html

[macduffy]

Monsanto's glum outlook doesn't look good for Nufarm's prospects with profits
from Roundup expected to halve this year.

http://www.google.com/hostednews/ap/article/ALeqM5i_GL8C3Cw8lgmB-LfyJsubT5TNuwD991A3HO0

[Dr_Who]

Monsanto's glum outlook doesn't look good for Nufarm's prospects with profits
from Roundup expected to halve this year.

http://www.google.com/hostednews/ap/article/ALeqM5i_GL8C3Cw8lgmB-LfyJsubT5TNuwD991A3HO0

Yeah I saw that, thanks.

NUF sp at these levels have already factored the downgrade.

Unlike MON, NUF do not manufacture gyphosate. All the cheap gyphosate that is coming out of China actually benefits NUF as they are a purchaser from the supplier and retails the product. Cheaper raw material cost.

Purchasing from farmers are seasonal. The growth in China and India alone will be a big demand on our food source in the near future.

I buy value and NUF reflects this going into the future. Abit like buying resource stocks a few months back when they were battered and bruced.

[macduffy]

Yes, I see value in NUF too and it''s near the top of my watchlist.

It's just that I've taken my hard learnt lessons of the past 40 odd years to heart and no longer buy shares in a downtrend. I'm picking that there'll be plenty of time to buy NUF once it starts to trend up.

;)

[Dr_Who]

Experience do count alot.

In this case I am prepare to buy more if the sp price falls. If the oil price continues to trend up, I think bio fuel will be back in fashion. Bio fuel demand will benefit NUF, MON and IPL. In the meantime, everyone needs to eat.

Good trading McDuffy mate. :)

[macduffy]

Experience do count alot.

In this case I am prepare to buy more if the sp price falls. If the oil price continues to trend up, I think bio fuel will be back in fashion. Bio fuel demand will benefit NUF, MON and IPL. In the meantime, everyone needs to eat.

Good trading McDuffy mate. :)

As I understand it, Monsanto's glyphosate problem is that their products containing this material are coming under competitive pressure with resultant lower profit margins.
I would expect NUF to experience this problem too and it looks like the market is reacting accordingly.

[Dr_Who]

As I understand it, Monsanto's glyphosate problem is that their products containing this material are coming under competitive pressure with resultant lower profit margins.
I would expect NUF to experience this problem too and it looks like the market is reacting accordingly.

The biggest problem, from what I have read is that the Chinese have flooded the market with cheap glyphosate. Monsanto is a producer of gyphosate with manufacturing plant. NUF is not a manufacturer and is a purchaser of the stuff from the manufacturers. So lower gyph is actually beneficial to NUF's bottom line.

Ask your MAQ broker to email you their latest analyst report. ;) I dont always agree and follow analyst report, but I do like and agree with what MAQ is saying in the current NUF report.

[macduffy]

I take your point, doc.

I guess it comes down to whether the flooding of the glyphosate market with cheap product will have an effect down through the system, reducing margins at each point.
Whatever, I still like NUF but I'll wait for an upturn in the SP.

;)

[Dr_Who]

You are dead right about waiting for it to turn, but then I couldnt help myself especially when it has come back from all the way from $14 to $9.40 and 16% below the rights issue price.

Will buy more once it turns. :)

[gambier33]

Nufarm is a classic Australian cyclical stock. High rural commodity prices and/or good farming weather sees a big increase in the use of agricultural chemicals. Nufarm does well. Conversely, low prices and drought give them a whack.

Its a great stock for a balanced buy-and-hold portfolio - just buy it when it's being whacked but rural market conditions are starting to turn for the better! Now's the time. The big drought seems to be ending.

[ratkin]

Paid around 3.20 for fernz (nufarm) in 1999 at the time price was going nowhere and the TA boys would of thrown their hands up in horror. It did go nowhere for the following two years but over time has proved to be a very solid investment.

If your looking for an addition to a longterm portfolio i would say its always been one of the better run companies out there. I wouldnt quibble too much over your entry price , but there is probably no rush to enter

[macduffy]

I suppose I should come clean and admit that I, too, have held NUF in its former life of NZ Farmers Fert and then Fernz. Did pretty well out of them but havn't been involved in recent years.

Firmly on my watchlist these days.

;)

[Dr_Who]

Maybe time to look at loading up some more NUF.

Chinese whispers that they are sniffing around NUF for some cheap farm chemicals. :)

[Dr_Who]

Here comes the Chinese to the rescue.

The AFR has an article on Chinese giant Sinochem looking into NUF. :)

I recall Chemchina had a go at $17.50 back in 2007.

Hope there is a bidding war, if info is correct.

[macduffy]

The AFR has an article on Chinese giant Sinochem looking into NUF. :)

Yes, doc, and the SP moved up yesterday in response.

If NUF is firm today after Wall Street's down day, I might be tempted!

;)

[Dr_Who]

I bought more yesterday.

Said to myself, F@#K it... analysts valuations is in the $11-$14 range (after downgrade), PE 10x, div yield of 4%, so why not buy more and hold on for a ride? Monsanto PE is 16x for 2009!!

[Dr_Who]

Here is something very interesting.

In 2007 the profit forecast for NUF was $148.8m. The sp was trading at around $15 and the T/O offer was $17.50.

Today the forecast profit for 2009 is $187m. The sp is only $9.05 and rumours of a possible T/O target. I would assume if there is a T/O the valuation would be in the $17 upwards based on these numbers.

Your views Mcduffy?

[macduffy]

Well, it's a different world these days and NUF has increased its capital in the meantime.
An offer at $17 would mean a premium of almost 90% on the current SP and that's just not going to happen!

I'm still waiting to see a bit of strength in the SP before I buy, well aware that I may miss the boat. So be it!

:cool:

[Lego_Man]

Bear in mind they have substantially diluted since then as well.

[macduffy]

Bear in mind they have substantially diluted since then as well.

Yes, hence my reference to " increased its capital".

;)

[Lego_Man]

Oh yes, i was referring to Dr Who's question.

I hold too...gotta say a 13 dollar offer would be quite nice.

[Dr_Who]

I ve noticed something else while doing my due diligences.

In 2007, NUF also downgraded their profit guidance 15% and UBS downgraded their recommendation from neutral to sell. All the downgrades was followed by a T/O offer 5 weeks following.

2009, CS recently downgrade NUF to a sell and NUF profit downgraded 15%.

Deja Vue?

The increased capital was to cover debt, so not relevant in the T/O valuation.

[macduffy]

The increased capital was to cover debt, so not relevant in the T/O valuation.
QUOTE.

I can't agree with that.

It depends very much on whether or not the debt was " on the books" at the time of the original offer; what the terms were; why it was incurred; the return on the assets to which it was related, etc.
In general terms, increasing equity reduces earnings per share so it has a bearing on valuations.

[Dr_Who]

Looks like NUF is forming a nice bottom?
:)

[Lego_Man]

Perhaps, although i have been getting somewhat agitated over its sluggish performance of late in a strongly rising market. Needs to take out 10.00...

[Dr_Who]

Be patient grasshopper.

The reward is in the Potential T/O target by the Chinese. Rural sector is cyclical. Buy in gloom and sell in boom.

NUF high debt level is out of the way after capital raising, so risk is reduced significantly.

[Dr_Who]

Nufarm still appears to be on the menu for SinoChem
23/07/2009 9:54:00 AM

NuFARM suitor SinoChem is rumoured to have enlisted RBS to help advise it on its overtures to the fertiliser company.
The Australian Financial Review's Street Talk column first mentioned that Sinochem had been sidling up to Nufarm nearly four weeks ago, but it seems the market has been discounting the prospect of any formal bid being put on the table.

Nufarm is thought to be advised by JPMorgan, which conducted the company's most recent capital raising, when it tapped investors for $300 million at $11.25 a share.

Interestingly, RBS worked with JPMorgan advising on the capital raising but seems to have now turned up sitting across the negotiating table.

Informal discussions between SinoChem and Nufarm are thought to be continuing. If that's correct, things must soon reach the stage where some announcement to the exchange about the talks will need to be made, perhaps in response to a more formal offer.

http://sl.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/nufarm-still-appears-to-be-on-the-menu-for-sinochem/1575813.aspx

[Dr_Who]

Perhaps, although i have been getting somewhat agitated over its sluggish performance of late in a strongly rising market. Needs to take out 10.00...

Hey Lego, where are you when the action in NUF is hotting up?

Wont be long before they announce a T/O. My guess is around $12.

[macduffy]

I reckon you've done well here, doc.

:D

I've probably missed out - a combination of not wanting to move before seeing some trend upwards and not really being able to buy without selling something else.

Oh well, can't win em all but we'll see what tomorrow brings.

[Lego_Man]

Hey Lego, where are you when the action in NUF is hotting up?

Wont be long before they announce a T/O. My guess is around $12.


Quite bullish, look at the price - right up near its highs. Now that the move is confirmed will look at acquiring some more tomorrow.

[Dr_Who]

Sp $9.84 closed up 10.3% on good volume. I am not buying anymore cos I ve already got plenty of shares.

I believe there are good substance in the media articles given it is so detailed. The article even names the investment banks involved in the negotiations. Chinese beening the miners and producers of gyphosate and NUF been the marketing, distribution and sales with a global presence makes it a natural fit. BTW NUF buys 60% of the gyphosate from the Chinese.

McDuffy, read the Macbanks analyst report.

Bring on the T/O offer!
:)

[Dr_Who]

NUF trading halt pending announcement.

[Dr_Who]

NUF confirms T/O talks with SinoChem.

KABOOM!
:)

[Lego_Man]

We have liftoff!

[macduffy]

I've joined the club again at $10.73.

Probably cost me $1+ ps by waiting for confirmation.

:o

[Dr_Who]

If the T/O does happen, I would expect T/O price to be between $12-14.

The probability of a T/O is high given SinoChem have RBS doing the due diligence and negotiation. This time round SinoChem have plenty of cash to go for the entire NUF themselves and do not need on private equity particitpation.

:)

[Penfold]

This is a bit opportunistic by Sinochem... Nufarm has a pretty outstanding long-term outlook. I would hate to see an offer of less than $13.50.

I would be sad too, to see Nufarm leave my portfolio... I was intending to hold them for a long time yet. Will need to look for a new way to get exposure to the ag industry... maybe I can buy a sheep or two and run them in my yard.

[macduffy]

Virtually all takeovers are opportunistic to some degree or other although some companies have been known to overpay as we saw during the resources boom in Australia, eg Zinifex's purchase of the Avebury nickel mine, Lihir's purchase of Ballarat Gold Mines, RIO's purchase of Alcan!

We don't know how much will be offered for NUF at this stage but it's got to be sufficient to attract major shareholder Doug Rathbone.
Personally, I'll be happy to keep NUF in my longterm portfolio if the offer's not good enough.

;)

[Penfold]

I honestly feel that I would be able to sell my holding at $16-18 per share within 3 years.

I hope other holders see that value... I would hate to see us all give it away for a bit of short term gain. And as you mentioned this all hangs on Rathbone... Hard to see him walking away for anything less than a 50% premium.

[Dr_Who]

I am happy to depart my holdings at $14.

Here is my take on NUF potential T/O offer. Rathbone have been slowly selling down his holding from 18% to 11% in the last few years. This indicates to me he is a seller, but at the right price. The Chinese will argue that Rathbones recent sale of his holding to insto at $11.20 is a good indication for a price to negotiate. Of cos to have full control the Chinese will have to pay a premium.

To take it now for $14 or wait 3 years for (maybe) $16? I will take $14 now. My average for NUF is around $9.33, so happy to part ways at $14.

[Penfold]

Fair call... A certain $14 is better... I just don't know the offer will be that high.

At 62, maybe Rathbone is ready to walk away...

[macduffy]

Here's what Stephen Bartholomeusz of Business Spectator has to say about the NUF business.


http://www.businessspectator.com.au/bs.nsf/Article/Chinas-chemical-romance-pd20090724-U95CF?OpenDocument&src=kgb

[Dr_Who]

Interesting article on Bloomberg.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aCpmne7_LazA

[Dr_Who]

We have alot to learn from the Chinese. They have been traders for thousands of years going back to the silk traders. Notice how they flood the market with gyphosate depressing the global prices and then went shopping for cheap chemical companies.

[Dr_Who]

Sinochem on a global acquisition trail and NUF is in their sights.

Shares in U.K. oil and gas explorer Emerald Energy PLC (EEN.LN) rose sharply Wednesday after its board recommended shareholders approve a takeover proposal from China's state-owned Sinochem Corp., which values it at GBP532.1 million.

http://english.capital.gr/news.asp?id=793562

[Dr_Who]

For the diehard Nufarm shareholder who wants to know more about the company.

Here is a podcast for you to listen to.

http://agwired.com/2009/08/17/13868/

“This year we introduced 13 new seed treatment products for all the major crops,” said Rund. “We have greatly expanded our product line for range and pasture weed control. We’re also in the process of introducing a very broad range of herbicides for small grasses.”

[Dr_Who]

I am not selling my shares for less than $14.00!!!!!

Nufarm, Sinochem dialogue continues

DISCUSSIONS between Nufarm and Sinochem appear to be ongoing, following up the preliminary, incomplete approach from Sinochem, according to The Australian Financial Review Street Talk column on Thursday.
That suggests there may well have been some give in relation to Sinochem's initial approach, and possibly some more clarity around what sort of price Nufarm's board and chief Doug Rathbone, a 14 per cent shareholder, might be willing to recommend.

Working backwards, a figure about the $12-a-share mark would be a fairly interesting place to start.

The day before the Street Talk column suggested Sinochem was circling Nufarm, the company's stock closed at $8.92.

Later, the company received a speeding ticket from the Australian Stock Exchange and the stock jumped to $11.12, at the same time the company indicated its net profit after tax may be up to 15 per cent below the previous guidance.

http://sl.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/nufarm-sinochem-dialogue-continues/1601312.aspx

[Dr_Who]

Somethings up on NUF!

Share price up 5%!

T/O announcement soon??
:):)

McDuffy mate, you still there on NUF?

[Dr_Who]

Up 8% !!!!

Surely must be a ASX price enquiry!!!
:)

[macduffy]

Yes, still there, doc and don't see any reason to sell.

Would have to think that progress is being made on an offer from the Chinese but it could also just be speculation. I wouldn't rely on the ASX to ask the question - they seem to be rather inconsistent in that regard.

[Penfold]

Credit Suisse put a fair t/o price at $13 this morning... it seems to have started todays rally.

I am considering selling off half my holding at this price and waiting to see what happens.

If no offer goes ahead they will probably go back to the low 10's. Credit Suisse didn't give a glowing review of their outlook.

[Dr_Who]

The AFR have been dead on target with their reporting on Nufarm T/O to date. The AFR mentioned that Sinochem is getting ready to bid $14 for NUF. I dont doubt the AFR one bit. I think $14 is a fair price for this company.

http://www.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUSSYD47860920090827

Broker estimates on what might be an acceptable bid price range between A$13 and A$14.50 a share, or between A$2.8 billion and A$3.2 billion.

[macduffy]

Latest on the Sinochem "offer" from The Australian.

http://www.theaustralian.news.com.au/business/story/0,28124,26018715-643,00.html

:cool:

[Dr_Who]

It seems to me like Sinochem and Rathbone & Co will soon sit down to negotiate a price that is acceptable. The good news is that Rathbone are prepare to depart his holding at the right price. This should smooth out the process considerably.

Whats also positive is we are starting to see a turn around in the rural crop sector in Aust. Bring on the rain.

I would assume a price between $13-14.

[Dr_Who]

Is Chemchina coming back to have another look at NUF? If so will they compete and outbid Sinochem for NUF?

Things are starting to heat up.

http://www.reuters.com/article/innovationNews/idUSTRE58325T20090904

[macduffy]

Is Chemchina coming back to have another look at NUF? If so will they compete and outbid Sinochem for NUF?

Things are starting to heat up.

http://www.reuters.com/article/innovationNews/idUSTRE58325T20090904

What? Two Chinese entities competing with each other for a foreign company?

That would be a first, wouldn't it, doc?

:rolleyes:

[Dr_Who]

The weakness and profit downgrade of Monsanto will play into the hands of the Chinese and gift wrap NUF with a early Xmas present. The Chinese must be rubbing their hands together and licking their lips. :confused:

May even pick up more shares if the sp comes down further. .... checking my heart monitor.

[Penfold]

Wonder whats behind this afternoons fall? Announcement coming perhaps...

[Dr_Who]

Hmmm.. either it is an opportunity to buy more cheap shares or T/O potential is over and the Chinese have walked off.

I think more likely there is a horrid profit announcement due end of this month.

Who dares wins or lose. I still got my shares, may even add more, but not just yet.

[macduffy]

NUF releases its annual results this morning.

Might we hear something about the Sinochem business?

http://www.smh.com.au/business/sinochem-waits-in-wings-at-nufarm-20090927-g7oo.html


:cool:

[Lego_Man]

Yeah, 13 buck offer.

Thoughts?

[Dr_Who]

WOOT!!!!!

T/O by NUF $13 :):)

$13 + .15 div = $13.15

[macduffy]

Still a very tentative "offer" at this stage but provided the market doesn't tank disastrously in the next couple of months I expect it will go ahead. In that event, the board of NUF have said they will unanimously recommend it and given Doug Rathbone's big holding you'd have to expect it to be successful. Hard to see any competition issues and it's hardly a strategic asset.

The price is a bit on the low side IMO but that's a reflection of current conditions, I guess.

[Dr_Who]

I agree. Looks like DR and Co is a seller of their holdings at $13. They would have agreed on the deal prior to this announcement.

[COLIN]

The buy/sell is still an unusual $1 below the "tentative offer" suggesting that the market has some doubts about wehether it will be finally consumated. I bought a few of these at around $10.80 a few weeks back, given the Chinese interest, and it looks as though I will be holding until - and if - a firm offer comes through, rather than taking market price now.

[macduffy]

The buy/sell is still an unusual $1 below the "tentative offer" suggesting that the market has some doubts about wehether it will be finally consumated. I bought a few of these at around $10.80 a few weeks back, given the Chinese interest, and it looks as though I will be holding until - and if - a firm offer comes through, rather than taking market price now.

Yes, it looks like the potential upside of around 7.5% isn't enough to tempt too many buyers to bid up at this stage, given the completion risk and opportunity cost of tying up funds for two months or more.
I'm holding also at these levels.

[Dr_Who]

Hmmm...sp very weak.

May actually pick up some more shares if the sp continues to come down.

[Lego_Man]

Some would view this as free money on offer right now with the SP trading a buck below takeover offer. Not like the chinks are going to pull out or lower the offer - they will have been made fully aware of the profit situation via the last few weeks of negotiation. FIRB shouldnt be a problem either.

Might think about topping up a little further.

[Dr_Who]

Ok, I just topped up some more shares at $11.85. Still have a good average price, so not afraid to buy more. If it all turns to custard, we all go down burning... LOL.. joking.

I am confident this deal will get through. People forget there is also a 15 cent div in this.

[macduffy]

Comment from Bryan Frith of The Australian.

http://www.theaustralian.news.com.au/business/story/0,28124,26137841-16941,00.html

He sees the matter being far from a foregone conclusion. Given recent history here I think I'd agree. Sinochem might even raise their price!

[Dr_Who]

I dont see any problems with FIRB approval. NUFis of no strategic importance to Aust and Sinochem will not have a monopoly in the sector.

It also gives me confidence that the Chinese have come back the second time within a year to have another go at NUF. This usually means they are serious about buying NUF.

Wouldnt it be fantastic to see another party coming into play? Wonder if Monsanto is interested?

[macduffy]

And another article, this time from the SMH, making the point that the takeover, if it goes ahead, will be China's biggest buy of an Australian company.

http://www.smh.com.au/business/chemistrys-right-as-china-ogles-nufarm-20090928-g96k.html

[macduffy]

And comment here from the Business Spectator.

Raises the possibility of a counter bid from ChemChina. Now that would be a first, having two Chinese firms biding against each other! Most unlikely, I would have thought.

http://www.businessspectator.com.au/bs.nsf/Article/BREAKFAST-DEALS-Marking-territory-pd20090929-WBTAG?OpenDocument&src=mp

[macduffy]

Apparently BA-Merrill think that the takeover, if it goes ahead, won't be effective until March next year. They don't expect a counter-bid.

[macduffy]

Every commentator has a view on the "tentative bid".

Here's AIR's.

http://www.aireview.com.au/index.php?act=view&catid=8&id=10628&setSub=1

[Dr_Who]

Alot of rumours and speculations flying around.

Here is my take on the situation.

1. The reason Sinochem have signed a heads of agreement for exclusive due diligence is that there maybe wind of other interest in NUF.

2. It is not out of the question to have ChemChina making a bid. Unlike the resource sector, there is only one NUF with a global presents listed in Aussie.

3. There should not be any problems with the FIRB. NUF is of no strategic value and most of its business is overseas.

4. DR and Co are sellers and the board have recommended it.

We just have to do the waiting game. Abit like OZL nerve racking at times, but good opportunity to accumulate more shares on price weakness.

[Dr_Who]

Here is a good run down why the Chinese wants NUF. The Chinese are serious about NUF and will not walk away from this deal.

http://www.chinastakes.com/2009/9/china-continues-to-eye-australian-companies;-agricultural-firms-next-targets.html

[macduffy]

Yes, doc, I think the deal will happen eventually and I don't think there will be a counter bid.

But brokers expect the matter to be "longwinded".

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=03BC28D7-1871-E587-E151A5D923ABB92A

[macduffy]

And here's Stephen Bartholomeusz' view on the "bid".

http://www.businessspectator.com.au/bs.nsf/Article/Nufarm-makes-hay-pd20090928-WB6U4?OpenDocument&src=kgb

[Dr_Who]

NUF sp at $11.35 is 14.5% below the T/O price of $13 :eek:

Coul;dnt help myself, bought more shares today. That is how confident I am that the deal will go through.

Now... where are my heart regulator pills?

[macduffy]

Hey, doc, I thought you were keeping a few bucks for the Myer float?

:D

But seriously, I think the risk/return on NUF at this point is a fair risk. I hold a few and wouldn't be too unhappy if this bid came to nought and put NUF back into my longterm portfolio again. A good investment either way, IMO.

[Dr_Who]

No money left for Myers float... LOL

[Dr_Who]

Hey Mcduffy.. wont be long now mate. Once they go unconditional, the sp will trade less 5% of T/O price.

Sinochem Said to Start Selling $500 Million of Bonds

Oct. 28 (Bloomberg) -- Sinochem Group, China’s biggest chemicals trader, started selling $500 million of five-year dollar bonds in the interbank market to fund overseas acquisitions, a sale document shows.

http://www.bloomberg.com/apps/news?pid=20601080&sid=a84G6Sa2FjXc

[macduffy]

Good spot, doc!

Yes, the ducks seem to be lining up but there's still a way to go to the end of the due diligence period ( 18 November) and the end of the "exclusivity" period ( 3 December).

I'm still a bit ambivalent about letting such a good stock as NUF go, but then, there's always something else to spend the money on!

;)

[Dr_Who]

In this nervous and volatile market, I am comfortable sitting on a T/O stock. Fingers crossed... LOL

[Penfold]

Good news coming I wonder? Its been edging up all afternoon....

[Dr_Who]

I assume the result of the due diligence by Sinochem is due out soon. From the positive sp movement, one would also assume Sinchem will say YES. Here is hoping.

JP Morgan has a SELL on NUF... LOL. When a analyst says sell, I tend to buy. It works every time.

[macduffy]

Good news coming I wonder? Its been edging up all afternoon....

Good to see but may have been only the effect of a strong Aussie market today. NUF +2.1% against a general index increase of about 1.8%.

Sinochem due diligence isn't due to complete until 3 December.

[macduffy]

The Bull is featuring NUF as its stock of the week.

http://www.thebull.com.au/articles_detail.php?id=7368

:)

[Dr_Who]

You cant go wrong buying cyclical stocks at the bottom. This is proven in the resource sector and now it will continue in the rural sector. :)

[Dr_Who]

China’s Sinochem Completes Study of Nufarm Finances

Nov. 19 (Bloomberg) -- Nufarm Ltd., target of a A$2.8 billion ($2.6 billion) takeover bid by Sinochem Corp., said the Chinese group has completed a study of the company’s finances and the two parties are working on a final agreement.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aOTiTnJ08OS0

[Penfold]

China’s Sinochem Completes Study of Nufarm Finances

Nov. 19 (Bloomberg) -- Nufarm Ltd., target of a A$2.8 billion ($2.6 billion) takeover bid by Sinochem Corp., said the Chinese group has completed a study of the company’s finances and the two parties are working on a final agreement.

http://www.bloomberg.com/apps/news?pid=20601081&sid=aOTiTnJ08OS0


Whats everyone's take on this? It looks like from a release this afternoon that Sinochem wants more time.

I think our only hope now is another bidder emerges.

[Dr_Who]

I assume the deal is still there, just gonna take abit longer to finalise the agreement. With all deals this size, it takes time and are never on schedule. NUF is a complex and sizable deal with alot of office around the world.

I am hoping there are no complications and the deal goes through, but just Sinochem needs abit more time to complete it, now Dec 23. Wouldnt it be great to have another bidder come in to trump Sinchem, but I think it is unlikely, but then you can never say never. Maybe an opportunity to acquire more shares for the brave?

Sinochem has indicated to Nufarm that it remains very interested in a Nufarm acquisition and Sinochem has not proposed any change to the previously announced price of $13.00 cash per share which was part of the non-binding proposal announced on September 27, 2009.

[macduffy]

Hmmm....

A bit of a spanner in the works, given the time that Sinochem has already had to do its due diligence.

Another three weeks seems an excessive amount of time to sort out a few small matters. Hate to say it but it looks like Sinochem may be wanting to re-negotiate the price.

And I'm holding NUF.

:(

[Dr_Who]

I hate to say it also, but I think you maybe right there McDuffy. Sinochem knows they are the only interested party and wants to take advantage of that.

The worst case shouldnt be below $11.25 (insto placement). The best outcome will be the same price of $13. The reassuring factor is that the Chinese is serious about buying out NUF. This is there second attempt and the due diligence process is not cheap.

I may actually buy more shares if the price goes lower.

[Dr_Who]

T/O or not, the cycle for primary sector chem have bottomed and starting to move back up again. This is evident with the sp of Monsanto. It is positive both ways. If the Chinese dont act now, they may and will have to pay a much higher price down the track. Abit like the resource sector and RIO, they will miss out if on this chance to pick NUF up cheap if they dont move now.

http://www.businessspectator.com.au/bs.nsf/Article/Nufarm-China-Sinochem-takeover-pd20091201-YBAUA?OpenDocument

[macduffy]

This may be your chance, doc!

NUF SP is down 5.4% today.

[Dr_Who]

I did. :)

I bought more shares today at 10.65. Now I am holding too many NUF shares. My broker gave me a lecture this morning. Lucky I had my ear plugs on... LOL. Lucky IRN performed well and gave me some extra cash.

Either I am hallucinating or there seems to be a good buying volume. Any decent volume of shares on the sell side are quickly mopped up by buyers.

[Dr_Who]

Nufarm expects profit growth in 2010

http://www.businessspectator.com.au/bs.nsf/Article/Nufarm-expects-operating-profit-growth-in-2010-pd20091203-YCV2Z?OpenDocument

[Dr_Who]

The Sinochem deal is still alive.

Nufarm: Sinochem taking time to reach conclusion on pricing issue
Takashi Toyokawa and Simon Segal
Published: December 3 2009 22:41 | Last updated: December 3 2009 22:41

Sinochem is currently working expeditiously to reach a conclusion on issues around pricing in its bid for Nufarm [ASX:NUF] although the process is expected to take some time, dealReporter has learned.

The Chinese state-owned enterprise is now reviewing and awaiting further information from Nufarm but is hoping that it can sign a mutually acceptable transaction implementation agreement by or before the limited extended deadline on 23 December 2009.

The exclusivity period expires today [3 December 2009] and discussions between the companies will be conducted on a non-exclusive basis until the limited extended deadline of 23 December 2009. The new deadline imposed by Nufarm is said to be firm and chances of interlopers emerging is thought to be low.

Despite the fact that the ongoing process involving the exchange of information is likely to take some time, it was said that the unexpected delay is not necessarily being viewed upon negatively. Rather, it is seen more as a procedural maneuver given the size and complexity of Nufarm’s global business.

It is known that a number of issues have arisen during the ongoing due diligence review, which has led Sinochem to re-evaluate a number of factors including the indicative offer of AUD 13 per Nufarm share. The challenging environment is one factor that Sinochem may take into consideration as it deals with this issue, it was said.

However, as discussions remain fluid at this stage it remains unclear if any price adjustments will be made in the end, it is understood.

Should there be any deviation to the AUD 13 figure, Sinochem would have to figure out how to renegotiate terms with Nufarm’s board, which reaffirmed today that that it intends to proceed at the previously agreed price.

A source with knowledge of the situation but not involved in the transaction noted that several hundred Sinochem staff are working on the deal in hopes of reaching a conclusion as soon as practical and that it could be possible that an agreement could be reached prior to 23 December 2009. Sinochem has approached this transaction incredibly cautiously from the start but is eager to see the deal through, the source added.

It is also keen to avoid creating negative sentiment for outbound China transactions given Sinochem’s role as a state-owned enterprise, the source explained.

Nufarm entered into a heads of agreement with Sinochem on 28 September 2009.

http://www.ft.com/cms/s/2/2ab52f22-e059-11de-8494-00144feab49a,dwp_uuid=e8477cc4-c820-11db-b0dc-000b5df10621.html

[Dr_Who]

McDuffy,

Looks like the deal with Sinochem will go through, but at a slightly lower price. Sinochem knows they have the upper hand in the bargaining process, so they have squeezed as much as they could out of this deal. At least there are now a good chance of a deal.

[macduffy]

McDuffy,

Looks like the deal with Sinochem will go through, but at a slightly lower price. Sinochem knows they have the upper hand in the bargaining process, so they have squeezed as much as they could out of this deal. At least there are now a good chance of a deal.

Yes, that looks to be the case. The AFR usually get this sort of things right!

I'll withhold judgement until we see just how much lower the price is going to be.

[Dr_Who]

Yes, that looks to be the case. The AFR usually get this sort of things right!

I'll withhold judgement until we see just how much lower the price is going to be.

I, too have a few things to say about NUF and our friend Rathbone. I will reserve it till I see the T/O agreement and price.

Will have abit of cash to go shopping for more stocks with IRN and NUF taken over. Plenty of cheap stocks with this market coming back down. I think it is healthy for the market to consolidate abit.

[Dr_Who]

Either someone is covering their short or the agreed price is not too far from $13.

[soulman]

Either someone is covering their short or the agreed price is not too far from $13.

Tough call on this one.

Strange thing about this market is that AXA drops quite a bit on Wed before the NAB offer. I got in on Tuesday for a lucky trade on AXA so this movement on NUF is no sure bet. Deadline is looming and this can go either way.

[Dr_Who]

$12 :confused:

shareholders are getting screwed. :(

Oh well, you cant win them all.

[drillfix]

To me there is a BIG BLACK CANDLE that says....RUN

[Penfold]

To me there is a BIG BLACK CANDLE that says....RUN

I was never that happy about letting my Nufarm go...

I reckon your right, that anyone trading better drop them in a hurry. The $12 offer ain't going to get the support it needs and Nufarm will be heading back to under $10.

But I will be happy to take up a few more and play the long term waiting game.

The question is how low will they go when this don't go through?

[drillfix]

The question is how low will they go when this don't go through?


No, that is not the question you want to ask yourself.

The question should be, "is there a better stock moving in an UPTREND that offers better value"?

Too many times I have played the sideline man, or caught too many falling daggers to have my capitol devastated.

I make no assumption about knowing this stock, the value or even what it does.

But technically, this is going side ways with 3 dollars this way, 3 dollars that way.

Or Question really is, How hot do you like your potatoes, Scolded or just Mild?

or how about, Beep beep beep, danger Will Robinson

.

ps: but saying that, the TA shows Stochastics on the bottom potentially about to turn up, RSI is below 50 that may turn up, MACD about middle potentially could turn up
So with some volume and some good news this could be a good trade, BUT watch out for some of those Bearish Engulfing Candles hey~!

[Dr_Who]

I was never that happy about letting my Nufarm go...

I reckon your right, that anyone trading better drop them in a hurry. The $12 offer ain't going to get the support it needs and Nufarm will be heading back to under $10.

But I will be happy to take up a few more and play the long term waiting game.

The question is how low will they go when this don't go through?

I have been thinking.

$12 is neither here nor there, esp when I think the sp wont drop below $10. At $10 it will be trading 25% below its peers and the market. I am actually happy to hold onto the stock rather than sell it at $12. I still think $13 is a fair price for NUF. Sinochem is playing hardball with NUF, cos they know they are the only buyers.

The cycle for rural chem have turned. This is evident with its peers sp now moving upwards from its bottom. NUF should look at a merger with of one of its peers through a share swap. I would be happy to accept a T/O bid by the likes of Monsanto of $13 for shares and not cash rather than just $12 cash from Sinochem.

Maybe it is time to tell Sinochem to take a hike and bring together a better deal in terms of a share swap at a higher price.

[COLIN]

I think the Chinese must have employed the same negotiating team as the one they sent to Copenhagen. Talk about hardball !

[Dr_Who]

NUF have told the Chinese to piss off and rightly so.

Sumitomo have now entered the game by buying 20% of NUF @ $14.00 via a tender process. There will also be a cap raising. This is positive news for NUF.

The game is not over yet. The Chinese have lost face to the Japanese. I think Sinochem will come back with another higher offer for NUF. They hate losing to the Japs.

I fully support this great strategic move by NUF and will take up my rights.

Game on!

http://www.heraldsun.com.au/business/nufarm-swaps-chinese-for-japan-bid/story-e6frfh4f-1225814331269

[macduffy]

Yes, doc. Interesting developments!

I'm not keen on a $12 offer either. Would much rather stick with NUF and wait for better trading and/or offers.

;)

[Dr_Who]

I am waiting for the Chinese to make a $14 cash T/O offer.

The Chinese hate losing face, especially to the Japanese.

[Penfold]

This is a great outcome for me... Sumitomo can have 20% of my holding. And then I will be happy to hold the rest long-term.

:)

[Dr_Who]

Interesting that Sumitomo Chemicals are in a number of countries that Nufarm have no presences. New locations and distribution network will benefit NUF greatly.


http://www.sumitomo-chem.co.jp/english/company/kaigaitenkai.html

[Dr_Who]

This article sums up very well Sinochems M&A failure. Worth a read. Dont be surprise to see the Chinese come back to trump the Japs with a possible higher bid for NUF. I would say it will have to be at least a full T/O at $14. It will be hard for the board to turn down a full cash T/O @ $14.

Sinochem's Nufarm bid an object lesson for China Inc

Sinochem is doubtless one of China's biggest and best corporations. But in so desperately mismanaging its plans to establish an Australian footprint through Nufarm, Sinochem has exhibited scant appreciation of the abstruse arts of M&A.

http://www.theaustralian.com.au/business/opinion/sinochems-nufarm-bid-an-object-lesson-for-china-inc/story-e6frg9if-1225815356701

[macduffy]

Yes, a good article.

While Sinochem seem to have made a complete hash of their attempted acquisition I have a small niggling thought that maybe they found something they didn't like and that their apparently clumsy revised offer with unacceptable conditions was a way of withdrawing without formally doing so.

Would that be "saving face"?

:confused:

[Dr_Who]

I dont think thats the case McDuffy.

I think Sinochem was playing hardball thinking they are the only buyer, with a possible credit downgrade and three profit downgrades they have a chance to pick up NUF cheaper. This is evident with other M&A stuff ups by Sinochem lately.

Sinochem recently stuffed up the Kazakh oil deal and the Koreans came in and trumped them. Talk about losing face.

http://www.chinadaily.com.cn/bizchina/2009-12/30/content_9245039.htm

http://in.reuters.com/article/oilRpt/idINTOE5BS00K20091229

I actually think the Chinese wants NUF for its global distribution network with a high probability of them coming back for another bid. They wont let the Japs take this one.

[macduffy]

Final confirmation of the deal by the Sumitomo board is due this Friday.

No sign yet that Sinochem are having second, or rather third, thoughts?

I'll be happy if the Sinochem deal is ratified and that we get to sell 20% of our holdings at $14.

:cool:

[Dr_Who]

One can only hope and stay positive.

It strikes me as very odd that this is the second attempt the Chinese have attempted a T/O on NUF and backed out to have the Japs trump them.

Funny how Credit Swiss downgrades NUF and then a few week later files a substantial holders notice.

[macduffy]

Sumitoto board approves strategic investment in Nufarm.


;)

[Dr_Who]

Sumitoto board approves strategic investment in Nufarm.


;)

Phew! lol

I bought some shares today. Call me crazy!

[macduffy]

I'm a bit puzzled by the continued weakness in NUF, down another 10c today, admittedly in a weak market, to $10.05.

The Sumitomo board has confirmed that it will tender for 20% of all holdings at $14 which when it goes through will leave holdings bought at today's price at about $8.70.
This will be followed by a pro rata cash issue at a yet to be determined price. Perhaps the uncertainty of that is the depressing factor?

The Sumitomo involvement looks to be beneficial to NUF in that it opens more markets and introduces a strong new shareholder. I'm tempted to add a few more.

Any views out there?

[Dr_Who]

The whole rural sector stocks have been weak lately plus the fact that the sh vote is not until march. These combining factor maybe the reason for its weakness. I am loaded on ELD and NUF so cant load up anymore lol.

I dont understand why rural stocks have been weak, esp when the AUD have come back abit against the USD. The sector have bottomed and looking to improve in the future. Plenty of rainfall.

[macduffy]

What is the ex-date for participation in the buy back? Perhaps the market knows something we dont - maybe there is an "get out" clause that Sumitomo can trigger due to the market decline?

No ex-date mentioned yet.

As Dr_Who says, NUF shareholders vote on the tender to Sumitomo (not a buy-back) on March 2. NUF has said that docs will go to shareholders in early Feb so that must be near.

No mention of force majeure type clauses in the agreement but as you say, we wouldn't know!

[Dr_Who]

I must say I have been disappointed with my investment in NUF. Hey, you cant win them all!

Nufarm keeps mum on profit

http://theland.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/nufarm-keeps-mum-on-profit/1742330.aspx

[Balance]

I must say I have been disappointed with my investment in NUF. Hey, you cant win them all!

Nufarm keeps mum on profit

http://theland.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/nufarm-keeps-mum-on-profit/1742330.aspx

No wonder NUF was keeping mum - shocker of a result.

Hope you all bailed out. The writing was on the wall with all the brokers downgrading the stock in the last month when they could get no earnings guidance from the company.

http://www.theaustralian.com.au/business/nufarms-surprise-105m-profit-slump/story-e6frg8zx-1225836272618

Looks like the Chinese played this one smart.

[Balance]

Fourth profit warning. This company is on a slippery slope.

How can a company get its forecastings so wrong?

Management has been telling pokies?

Took the Chinese to find out and walk away from the deal.

Wonder how Sumitomo feels now. Being Japanese and like Toyota, they probably bowed their heads and cried sorry.

[COLIN]

[QUOTE=Balance;295354]

Hope you all bailed out. QUOTE]

Yes, I did. The signs didn't look at all encouraging.

Now, that just goes to show that I am not an investor who allows himself to be blinded to realities, Balance.

Incidentally, having regard to the general tone of most of your postings, I have been wondering whether there are in fact any investments at all, which you could allow yourself to ever feel enthusiastic about?! If there are, it would be good if you could share them with us?

Just enquiring.

[Balance]

[QUOTE=Balance;295354]

Hope you all bailed out. QUOTE]

Yes, I did. The signs didn't look at all encouraging.

Now, that just goes to show that I am not an investor who allows himself to be blinded to realities, Balance.

Incidentally, having regard to the general tone of most of your postings, I have been wondering whether there are in fact any investments at all, which you could allow yourself to ever feel enthusiastic about?! If there are, it would be good if you could share them with us?

Just enquiring.

Just the good ones, Colin. NOT!

You will note that when posters get too negative on stocks, like RBD, PPL & DIL, I have posted counter-arguments to 'balance' the equation.

The opposite is also true.

[Dr_Who]

Balance only remembers the good ones and conveniently forget the bad ones. In fact, there are a number of bad calls he has made, but as usual I am too busy reading the dictionary to call them up.

[Balance]

Balance only remembers the good ones and conveniently forget the bad ones. In fact, there are a number of bad calls he has made, but as usual I am too busy reading the dictionary to call them up.

LOL - Challenge you to find one.

Bet you have been searching like crazy and wonder why u cannot find any.

As I wrote, I provide counter-postings to balance the positive or negative exuberances.

Fair enough?

Never take anything written on a forum like this personally - it's all good.

Great on those who got in on the NUF story, made money and got out. Just be very careful now with this company - downgrades likes these show the compamny is not well managed.

[soulman]

Balance, with Mr Rathbone owning a tonne of NUF shares, I think he has vested interest to do well for all shareholders.

[Balance]

Balance, with Mr Rathbone owning a tonne of NUF shares, I think he has vested interest to do well for all shareholders.

There is vested interest for sure.

Remember Mr Kerry Hoggard? He's still on the board and is a big shareholder in NUF. Does his track record tell you that big shareholders always act in the best interests of all shareholders?

Anyway, ASIC is investigating NUF so we shall see what comes up.

I have learnt over the years to avoid exposure to companies going through multiple profit downgrades - the hard way.

[winner69]

There is vested interest for sure.

Remember Mr Kerry Hoggard? He's still on the board and is a big shareholder in NUF. Does his track record tell you that big shareholders always act in the best interests of all shareholders?

Anyway, ASIC is investigating NUF so we shall see what comes up.

I have learnt over the years to avoid exposure to companies going through multiple profit downgrades - the hard way.

Multiple downgrades --- 4 in all this year I believe

And I was going to mention Kerry yesterday but thought better of it

[Dr_Who]

LOL - Challenge you to find one.

Bet you have been searching like crazy and wonder why u cannot find any.



You never give up do you? No point debating with someone who think they are always right, just pointless waste of time. Ok Balance, you are right and everyone else is wrong, you happy now? LOL..

You are awfully quiet on PVO, MYR, KMD.. etc. Dont have time to dig up the rest.

Just let it rest, dont want to continue this useless argument further. Happy now?

[Balance]

As I wrote, it's all good - nothing personal but you seem to be taking it all so personally.

Anyway and meanwhile, let's see what ASIC discovers with NUF. Something smells there.

[Balance]

And something does smell. Shareholders could have taken the $12 per share offer from the Chinese rather than just 20% of their shares to Sumitomo for $14.

Watch the share price (cum the offer) go down after the offer - ($9.18*10-$14.00*2)/8 = $8?

Market cap now of $2 billion = PER of 17 times = too high with earnings downgrade risks.

Looks like the Chinese exited this one cleverly and did not overpay like Sumitomo. Chairman & CEO now have jobs for life however - they are happy.

http://www.theaustralian.com.au/business/nufarm-should-have-come-clean-on-earnings-earlier/story-e6frg8zx-1225837144249

Excerpt : "Yet, according to Nufarm "the earliest point of time in which that disclosure was capable of being made was at the EGM".

If that's so, investors are entitled to wonder just how much of a handle the management and board has on the ongoing performance and future prospects of the company. At yesterday's close of $9.18, the see-through price for the 80 per cent Nufarm shareholders will retain is only $9.975 a share. Had shareholders been informed in advance of the EGM that a $40m loss was expected for the half year it may well have convinced many institutional holders that a $12 a share full offer would be superior to a $14 a share partial offer, leading to pressure being applied to the Nufarm directors to seek to reopen negotiations with Sinochem.

Conveniently, the disclosure of the expected $40m half-year loss at the shareholders meeting came simply too late for shareholders to give it proper consideration. Importantly it came after proxies -- which were 115.99 million shares in favour and only 171,000 against -- had already closed. Had earlier disclosure been made it's possible that some institutional holders may have changed the proxy vote."

[macduffy]

Shareholders could have taken the $12 per share offer from the Chinese rather than just 20% of their shares to Sumitomo for $14

I don't think that the $12 was ever firmly offered. The Chinese were seeking a further extension of time to do more digging - or for their own reasons - and in the light of subsequent events it seems likely that they would have walked away or at least reduced their offer.

NUF management have now made an explanation of their timing of the latest disclosure. I must admit it looks a bit "convenient" but there's a good chance that an earlier announcement would have stengthened shareholders' decision to take Sumitomo's $14 for a portion of their shareholdings, not weaken it. Bear in mind too that NUF's half year end on 31 January, not 31 December. Not many companies can come up with an interim report in a (28 day) month.

NUF's business is stongly cyclical, subject to commodity price and climatic factors, more so than the average manufacturer. Management has been up to the task in the past and should be given the benefit of the doubt at this stage, IMO.

[Balance]

I don't think that the $12 was ever firmly offered. The Chinese were seeking a further extension of time to do more digging - or for their own reasons - and in the light of subsequent events it seems likely that they would have walked away or at least reduced their offer.

NUF management have now made an explanation of their timing of the latest disclosure. I must admit it looks a bit "convenient" but there's a good chance that an earlier announcement would have stengthened shareholders' decision to take Sumitomo's $14 for a portion of their shareholdings, not weaken it. Bear in mind too that NUF's half year end on 31 January, not 31 December. Not many companies can come up with an interim report in a (28 day) month.

NUF's business is stongly cyclical, subject to commodity price and climatic factors, more so than the average manufacturer. Management has been up to the task in the past and should be given the benefit of the doubt at this stage, IMO.

I think you are right about the Chinese offer being highly conditional.

One guesses that they have learnt from the bad investments made by the Japanese in the 1980s and 1990s of paying up for everything without doing proper due diligence.

Good on them - their due diligence must have uncovered things they did not like. They have backed out gracefully without losing face.

The Japanese, as per usual, paid up and now, must be wondering what they have bought.

Turns out NUF management themselves were not aware until late Feb that they were operating at a loss!!!!!

Is that the kind of company I want to invest in?

[Dr_Who]

The T/O value in NUF is not the current earnings but their geographic global location of their supply/sales chain. Abit like Woolworths T/O play on the WHS with their dominance and location in NZ. The market is too focus on current earnings and forgeting the true value of NUF. It doesnt help with Management making an error judgement by paying a huge premium for glyphosate at the peak of the cycle. They are currently running down the glyphosate inventry and writing it off, which is near the bottom.

The Chinese and the Jap are no idiots. They can see value in NUF's global distribution network that they can leverage with current operations. The value is there, just need time to realise it. To me this is a great chance to pick up a stock that is not loved and a product (glyphosate) nearing the bottom of the cycle. NUF is currently buying glyphosate again at substantially lower prices.

Dont write off Sumitomo taking out the entire company after cap raising if the glyphosate market recovers and they are making good progress with the partnership. Also, dont write off NUF, Sumitomo and the Chinese partnering. Corprate play is not yet over for this pup that is still growing.

[Balance]

Dont write off Sumitomo taking out the entire company after cap raising if the glyphosate market recovers and they are making good progress with the partnership. Also, dont write off NUF, Sumitomo and the Chinese partnering. Corprate play is not yet over for this pup that is still growing.

LOL - that's a good one. Chinese and Japanese working together.

Pass the word around - Israel & Iran are going to merge into one country.

Best laugh I have had today!

Thanks, matey.

[macduffy]

The doc's right in that Sumitomo are looking beyond current market conditions in taking a stake in NUF. Whether or not they take that any further they will have a strategic partnership to give them new distribution opportunities for their products.

I don't know about the prospects of the Japanese and Chinese working together. History seems to put the odds heavily against that!

Note to the doc:

But please don't refer to NUF as a pup. We all know what pups grow up to be!

[Dr_Who]

NUF and Sumitomo may look at merging or buying a small shareholding in a Chinese company to capture market share and distribution network in China. For example, Japanese herbal pharmaceutical manufacturer Toa Seiyaku was purchased in August 2003 by Chinese firm Sanjiu medical and pharmaceutical, a comparative giant with a network of 10,000 retail outlets, guaranteeing a market for the smaller Japanese company’s products.

In fact, in 2007 Japan has invested up to 39,000 projects and as much as 60.8 billion US dollars of capital in China, making it the second largest source of foreign capital for China.

[macduffy]

NUF and Sumitomo may look at merging or buying a small shareholding in a Chinese company to capture market share and distribution network in China. For example, Japanese herbal pharmaceutical manufacturer Toa Seiyaku was purchased in August 2003 by Chinese firm Sanjiu medical and pharmaceutical, a comparative giant with a network of 10,000 retail outlets, guaranteeing a market for the smaller Japanese company’s products.

In fact, in 2007 Japan has invested up to 39,000 projects and as much as 60.8 billion US dollars of capital in China, making it the second largest source of foreign capital for China.


Fair point, doc.

A 2002 study found that China was the biggest recipient of Japanese direct investment into Asia.

Incidentally, it was announced today that Sumitomo has bought 50% of Emerald Group, one of Australia's largest grain trading firms. Confirms Sumitomo's interest in Aust rural businesses.

[macduffy]

Not strictly a NUF matter but I'm told that a certain doc has exceeded his private message quota and needs to clear a few to be able to receive new messages!

[Dr_Who]

All clear, try again, cheers mate. lol

[Balance]

First rule of investing - "If you don't trust management, don't invest."

Sounds familar? Last one was PRC.

Good questions being asked here with the end conclusion being that the major shareholders are hell-bent on maintaining contril rather than looking after all shareholders.

Excerpts :

"One cannot say the same of Nufarm. You know a deal stinks when the perpetually business-friendly Matthew Stevens of The Australian describes it as “puzzling”. “The forces that shaped Nufarm's unanticipated first-half loss were so much a product of management and boardroom decisions it is hard to see how the company can believe it has fulfilled continuous disclosure obligations ... Addressing shareholders gathered yesterday ... Nufarm chief executive Doug Rathbone said the business would make an interim loss of about $40 million ... This news came as something of a shock to the market, which thought it had been conditioned by Rathbone for a result south of last year's $66m interim profit but for a first-half profit nonetheless. Rathbone went on yesterday to forecast a second-half profit of up to $140m and therefore a full-year headline profit between $80m and $100m.”

Stevens goes on: “Nufarm insisted yesterday that it had only recently formed a firm view of the losses incurred in the US glyphosate business ... It argued, too, that the decision to sell US inventories at prevailing market prices created a predictable flow of losses, but there were other unforeseeable impacts that made it very, very difficult to provide earlier guidance ... Those factors included decisions to support troubled US customers by taking back product, and to absorb some customers' credit costs.”

As Bryan Frith of The Australian points out “...the problem is that Nufarm shares were selling at around $11 when the deal with Sinochem was announced last September and the share price was still around $10.50 when the Sinochem deal was terminated ... Since then Nufarm's share price has weakened, and it plunged a further 28c, or almost 3 per cent on news of the latest downgrade. Sumitomo's $14 offer price is a premium of 48 per cent to Nufarm's present market price, but of course that is only for 20 per cent of each holding ... If it is assumed that the share price factors-in $14 a share for 20 per cent of each shareholding, then that assumes a price for the remaining 80 per cent of only $8.33 a share ... Sinochem's rejected offer price of $12 a share is 27 per cent above Nufarm's present market price and 44 per cent above the implied see through price of $8.33. Many shareholders may consider they would have been better off receiving Sinochem's proposed full bid of $12 a share.”

Try all shareholders. This column has been a major fan of Nufarm over the years. It was one of the few Australian agribusinesses to make the leap into a globalisation strategy. Notwithstanding Stephen Bartholomeusz's ironic question “... did China’s Sinochem have a better understanding of Nufarm’s business than Nufarm itself when it lowered its offer”, this looks like a management focused on maintaining control, with insufficient regard for the company’s reputation and owners. Governance is a major component of value, which makes Nufarm look like a 'sell'."

[Dr_Who]

Lets see your disclosure on NUF balance.

You have a short position I assume? LOL

[Balance]

Lets see your disclosure on NUF balance.

You have a short position I assume? LOL

Get off the cheap alcohol and codeine, Dr Who. Don't make the same mistake as you did with PRC of ignoring clear signs of corporate governance issues.

Congrats to those who got in, got out and made money.

Those who are still there, plenty of warnings. Trusting managment has aready cost shareholders nearly $3 per share since Sinochem deal was first announced.

[soulman]

Balance, there is no doubt NUF is a dissapointment. When compared to other coy in the ASX 100, NUF is a flop. Whilst the big 4, miners, oilers has performed to expectation, NUF goes the other way.

I bought for the possible Sino deal, then hold for the Sumi deal. Now, just hold for the recovery. No doubt everybody will be selling their 20% holding to Sumi. I know I will.

Just for the record, the Sumi deal went ex on Fri 5th Mar.

[Balance]

Balance, there is no doubt NUF is a dissapointment. When compared to other coy in the ASX 100, NUF is a flop. Whilst the big 4, miners, oilers has performed to expectation, NUF goes the other way.

I bought for the possible Sino deal, then hold for the Sumi deal. Now, just hold for the recovery. No doubt everybody will be selling their 20% holding to Sumi. I know I will.

Just for the record, the Sumi deal went ex on Fri 5th Mar.

Soulman, I am simply just making obvious observations.

NUF was looking good as a recovery stock but management has just confessed to having no idea how things are going from month to month - dangerous place to be in for any businesses. More so for a global business like Nufarm.

[Dr_Who]

Just for the record, the Sumi deal went ex on Fri 5th Mar.

The Tender Offer will apply to shareholdings in Nufarm that are recorded on the register as at the close of trading on March 12, 2010.

[macduffy]

Tender offer documents should be received by now.

Shareholders accepting the offer for 20% of their shares at $14 - who wouldn't? - should note that the Acceptance Form needs to be in Melbourne by 7pm on 9 April. Note also that Sumitomo may accept a greater number of an individual's holding if total "regular" acceptances fall short of 20% of issued shares. Be sure to mark the correct box!

Disc: Holding NUF and accepting the offer.

[Dr_Who]

Thanks mate.

I havnt receive mine yet. Will keep a lookout for it.

The ex offer price is looking good. Surprisingly strong :)

[Penfold]

I've offered them 50% of my holding... to optimistic you reckon?

[macduffy]

I've offered them 50% of my holding... to optimistic you reckon?

Yes!

The tender price is so much higher than market that only those completely out of touch with the issue will fail to accept.

No harm in asking for a bigger slice, though!

[Penfold]

I live in hope Doug Rathbone's form will get lost in the mail...

[Dr_Who]

Nufarm predicts profit up to $100m

http://www.smh.com.au/business/nufarm-predicts-profit-up-to-100m-20100329-r8bl.html

[macduffy]

FN Arena sums up brokers' views on NUF.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=ACF4BDFA-EAAD-6D9E-04EC3BE09323871E

[drillfix]

FN Arena sums up brokers' views on NUF.

http://www.fnarena.com/index2.cfm?type=dsp_newsitem&n=ACF4BDFA-EAAD-6D9E-04EC3BE09323871E


DrillFix's prediction on NUF

http://i39.tinypic.com/i3wg76.png

Dont know much about the stock and what its got going for it, but looking at my chart, the Pitchfork kinda shows or predicts to me where this will be approximately in May.

I dont hold, and I am not an advisor, I just view and post the chart for those to see what I see Technically, atm.

[macduffy]

Well, there it is at $7.50
When is the rights issue?

Mid to late April was the timing mentioned in the chairman's letter re the Sumitomo tender. With completion in June.

[drillfix]

DrillFix's prediction on NUF

http://i39.tinypic.com/i3wg76.png


Well, as previously posted, it looks like the TA target has has unfolded as predicted.

Where it ends up, who knows, guess one must do up another chart.

[drillfix]

Hi KW,
I cant help you with the Fundamentals of rights to buy and stuff, but I sure can help you with a chart potential prediction.

Dont get me wrong, I dont hold the stock or know too much about it, but as previously mentioned, I just follow it from time to time and view the technicals.

Not looking too good and a fall down to $6.50 is showing apparent by the looks of the pitchfork in the chart, (also as previously drawn).

Here is a chart. NUP daily >>> http://i40.tinypic.com/2pyp3er.png

This is caught in the downward slip stream of a falling 8ma and 20ma with the 200ma way above.
I have marked with green and red arrows some of the swing traders buy and sell signals and usually they would wait until the for a 2nd candle to be over the light blue line or as it crosses the 20ma.

Some of the buy positions may not be exactly accurate but I think you get what its saying.

Again, hope the fundamentals turn this stock around in its track, but TA wise I think it is destined for the bounce on the green line at the bottom of the pitchfork.

Cheers for now.

[macduffy]

With the expectation that the rights issue is offered substantially below current market price in order to get a good uptake, this could be a good time to exercise your rights and buy in. Thoughts?

I'd expect the rights issue to be attractively priced and that I'll take up my rights.

An open question though as to whether or not one should be buying now, cum rights to an issue at an unknown price.

I'll sit and wait.

[Dr_Who]

I'd expect the rights issue to be attractively priced and that I'll take up my rights.

An open question though as to whether or not one should be buying now, cum rights to an issue at an unknown price.

I'll sit and wait.

I am with you on this one also.

Here is some interesting reading and why I think NUF is a T/O for the Japs later down the track.

DOW JONES Newswires

CANBERRA (Dow Jones)--Canadian-based grain company Viterra Inc. (VT.T) said Tuesday it
will sell its 50% stake in Australian Bulk Alliance, an upcountry storage and export
terminal business, to Sumitomo Corp. (8053.TO) for A$8.6 million.
Sumitomo's purchase increases the presence of the Japanese-based trading giant in
Australian agriculture. In early March, Sumitomo bought a 50% stake in grain marketer and
risk manager Emerald Group Australia Pty Ltd., effectively accessing a grain accumulation
network in one of the world's major grain exporting countries.
In Tuesday's deal, Summit Grain Investment (Australia) Pty Ltd., a unit of
Sumitomo, will exercise a right under a shareholder's agreement to buy all the
shares of ABA owned by Viterra, with the purchase triggered by Viterra's purchase of
ABB Grain Ltd. in September last year, Viterra said in a statement.
Following settlement--scheduled for April 21--Sumitomo will own 100% of ABA, which has
eight grain storage sites in southeast Australia and an equal share in a grain export
terminal at Melbourne Port with AWB Ltd. (AWB.AU).
Also this week, Sumitomo Chemical Co. Ltd. (4005.TO) is finalizing the purchase of a
strategic 20% stake in Australian -based agricultural chemical manufacturer and global
distributor Nufarm Ltd. (NUF.AU)

[macduffy]

Also, there is a lot of selling pressure at the moment as everyone exits whats left of their holdings which is impacting the price and trend. It may not last long.

Well, not quite everyone! About 11m shares traded during the last 3 days out of 218m, but I get your drift!

If there's another up day tomorrow I might be tempted to conclude that the rights price has been set somewhere close to the $7 mark.

We should know soon.

[drillfix]

KW, its going to head back to the 8ma and middle of the fork where it will try to cross the 8ma, if it does for 2 days then a good sign.

The sharprice is like a magnet to the moving averages (especially short term 8ma) and its looking good with W%R, RSI rising and stochs turning upwards.

Sad part is, this may be short lived until sometime next week and then down the fork it goes again as it has Technically bouncing off the falling 8ma.

I know you guys are probably jack of me calling stuff like this, but again, its only Technically, nothing more, nothing less., and there is no emotion in it.

Thats my update anyway, but I would gladly post a chart later in the day to potential targets if you guys want.

Cheers.

[macduffy]

Brighter outlook for glyphosphate?

http://www.agrimoney.com/news/weedkiller-downturn-past-its-worst-says-syngenta--1589.html

[Dr_Who]

Nufarm just $250m short of having things sorted
19 Apr, 2010 09:33 AM

There's just one box left to tick for agricultural chemicals firm Nufarm before it can get on with life.
The tender offer by Japan's Sumitomo Chemical Company to acquire up to 20 per cent of the issued shares at $14 a share is sewn up and all that remains is a $250 million capital raising, to be managed by UBS, The Australian Financial Review reports.

The deal is likely to kick off as early as tomorrow and will take the form of an AREO (accelerated renounceable entitlement offer) whereby the right to take up new equity is renounceable, and the institutional component of the offer is accelerated.

This means institutions are offered shares at a fixed price and must commit to subscribe within two days or forfeit their entitlement to take up new shares. The renounced rights are then sold via a book-build.

[drillfix]

Update on the NUF chart seems "now" shows support being $7.55, oblique resistance at 7.96

[macduffy]

NUF in a trading halt.

The new share issue draws closer.

http://www.asx.com.au/asxpdf/20100420/pdf/31pvsdk8m1tmpp.pdf

[Dr_Who]

Believe it or not, I am actually looking forward to this cap raising.

1 for 5 @ $5.75

[macduffy]

Yes, I'll certainly be taking up my rights, $5.75 is a fair bit lower than I expected.

Theoretical rights price is $1.66 so I'll also be watching for opportunities on any weakness there.

[macduffy]

The NUF issue hotline tell me that there won't be any rights trading. Rights not taken up will be offered in a Retail Bookbuild after the issue closes.

I'll be interested in the old shares on weakness below the theoretical ex rights price of $7.41.

[Balance]

The NUF issue hotline tell me that there won't be any rights trading. Rights not taken up will be offered in a Retail Bookbuild after the issue closes.

I'll be interested in the old shares on weakness below the theoretical ex rights price of $7.41.

Go for it, matey.

It's trading $7.17 and Rathone has also kindly offered his entitlement to the market - nice guy!

I wonder why he would not take up 4.3m new shares at $5.75 ????

Another alarm bell ringing.

[macduffy]

I wonder why he would not take up 4.3m new shares at $5.75 ????


Because he long ago signified his intention to sell down his 16m odd shares!

It's a renounceable issue so he will receive some value for his rights and keep faith with the market. Not every seller is trying to put one over us little guys!

[Dr_Who]

"A person that tells alot of fibs are always thinking everyone else around him are telling fibs."

[Balance]

Because he long ago signified his intention to sell down his 16m odd shares!

It's a renounceable issue so he will receive some value for his rights and keep faith with the market. Not every seller is trying to put one over us little guys!

So matey, you bought any cheap shares today?

$7.11 and well below theoretical of $7.41.

Sp now back below 2005 level. Better than ELD though which is skirting at the bottom all time low.

http://sl.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/rathbone-in-the-hot-seat-again/1791044.aspx

[macduffy]

So matey, you bought any cheap shares today?

$7.11 and well below theoretical of $7.41.

Sp now back below 2005 level. Better than ELD though which is skirting at the bottom all time low.

http://sl.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/rathbone-in-the-hot-seat-again/1791044.aspx

No, I don't buy shares in a downtrend (any more).

But that doesn't mean I won't be when the upturn comes.

I do like the friendly "matey" bit. But what's this about ELD? Some connection here with NUF?

[Balance]

No, I don't buy shares in a downtrend (any more).

But that doesn't mean I won't be when the upturn comes.

I do like the friendly "matey" bit. But what's this about ELD? Some connection here with NUF?

Both agri stocks.

[Balance]

Watch for the lone voice in the wilderness - they are usually insane or deadly accurate.

http://nqr.farmonline.com.au/news/nationalrural/agribusiness-and-general/finance/why-agri-shares-are-a-good-investment/1803172.aspx

[macduffy]

Good news for NUF shareholders with the company announcing that the overhang from the institutional part of the issue cleared at $7.40.

[drillfix]

Hi guys, sorry to jump in here again, as you guys probably think Im the grim reaper or something.

Technically this stock continues to ride the Pitchfork downwards as previously drawn in the other chart. Will post another EOD if you wish, though saying that, the next major support is showing $6.50

Guess this can turn around if there is news that can drive the FA upwards or the sector comes on fire all of a sudden. Though in the meantime, down she goes it seems.



Sorry lads

[soulman]

Well, I sold 20.8% of my holding to Sumi for $14 (cheque's in the bag and deposited). Will take the entitlement issue at $5.75 and hold on to NUF as a LT investment. Will Sumi one day T/O NUF, I don't know but it seems foolish to sell now.

[Dr_Who]

The rural rainfall has been so good that they are concern about crop pests problems.

http://theland.farmonline.com.au/news/nationalrural/grains-and-cropping/general/growers-warned-on-aphids/1809025.aspx?src=rss&utm_source=twitterfeed&utm_medium=twitter

[macduffy]

Hi guys, sorry to jump in here again, as you guys probably think Im the grim reaper or something.

Technically this stock continues to ride the Pitchfork downwards as previously drawn in the other chart. Will post another EOD if you wish, though saying that, the next major support is showing $6.50

Guess this can turn around if there is news that can drive the FA upwards or the sector comes on fire all of a sudden. Though in the meantime, down she goes it seems.



Sorry lads

NUF seems to be holding the $7.40 level set by the sale of the overhang from the institutional issue. In fact, trading at $7.58 at present.




There won't be any rights trading for the retail side of the issue but there could still be some selling pressure in the next week or two if too many holders decide to sell to take up the issue at $5.75.

[Tee]

This is the only stock on my watchlist that closed higher on Friday, 7/5/2010. But lower than the price of $7.40.

[macduffy]

This is the only stock on my watchlist that closed higher on Friday, 7/5/2010. But lower than the price of $7.40.

The $7.40 level has lost significance given market developments this last week.

What is significant is that NUF managed a higher close on the day, despite everything!

[Balance]

$5.22 - and poised to go lower with Kerry Hoggard resigning.

How many shares has he got to sell?

[macduffy]

$5.22 - and poised to go lower with Kerry Hoggard resigning.

How many shares has he got to sell?

A little over 2m. That's if he needs/decides to sell.

But let's put that into context. NUF has over 261m shares on issue. 4.5m have been traded so far this month.

[Stranger_Danger]

My target is $4 but it could overshoot.

Unless something major changes, would be excellent buying at that price.

Haven't held since $14 or so, been quite a ride since.

[Balance]

Those who are still there, plenty of warnings. Trusting managment has aready cost shareholders nearly $3 per share since Sinochem deal was first announced.

Trusting management now cost those who chose to ignore the warnings now $6.00 per share.

[Dr_Who]

A little over 2m. That's if he needs/decides to sell.

But let's put that into context. NUF has over 261m shares on issue. 4.5m have been traded so far this month.

Good riddance to the chairman.

The Japs pay $14 for NUF. Watch the rewards come into play in the long term cooperation with Sumitomo, restructuring and new blood to the board . :)

[Balance]

My target is $4 but it could overshoot.

Unless something major changes, would be excellent buying at that price.

Haven't held since $14 or so, been quite a ride since.

Well played, Stranger Danger.

Get out high and wait for a low entry point - rather than be stuck like a pig on a poke.

The writing was on the wall with NUF when it made multiple profit downgrades and stuffed up the t/o by the Chinese.

The Chinese sure did their due diligence on this one, and WALKED AWAY.

Meanwhile, the Japs must be crying into their sake. $14 per share versus $5.25 now!

Seems like the Japs have learnt nothing from the 1990s. That's like what they paid for the Rockefeller Centre in NY - US$3 billion and then, lost the whole lot a few years later.

[Balance]

Shoot! A trading halt and a trading update!

The nightmare of ELders all over again!

Hope you are all out.

Stranger Danger - you ready with your buy order at $4?????

Looks like the Chinese knew what they were doing! They WALKED AWAY.

[Balance]

There must be an ASX inquiry.

[Stranger_Danger]

I'm ready to read the trading update, yes.

I have a feeling this will be really good or really bad, and really good is asking a bit much?

I'm hoping for really bad. I don't think Nufarm is Elders, and long term I want to hold it.

If we got a panic, I'd definitely think about buying my first 25%. Wouldn't surprise me if we have one more "trading update" after this though, these things are like cockroaches in a kitchen.

[Balance]

All a little bit too convenient, isn't it?

Company assured investors' just 2 weeks' ago that its bullish profit forecasts are attainable.

Then, the Chairman resigns and today, it goes on trading halt!

Meanwhile, the company's sp kept dropping. So who has been selling and why?

The Wild West - that's the ASX.

[Balance]

Good riddance to the chairman.

The Japs pay $14 for NUF. Watch the rewards come into play in the long term cooperation with Sumitomo, restructuring and new blood to the board . :)

I can hear the Japs singing 'Sayonara'.

Or is it 'hara kiri.'

[winner69]

The new chairman obviously doesn't believe the numbers and has told the finance guy to go back and do some honky dory stuff so they look better

Might get something with a 3 in front of it yet danger

Any company that mentions that word glyphosate these days seems doomed .... who makes the generic version ..... they must be making a killing

[COLIN]

The new chairman obviously doesn't believe the numbers and has told the finance guy to go back and do some honky dory stuff so they look better

Might get something with a 3 in front of it yet danger

Any company that mentions that word glyphosate these days seems doomed .... who makes the generic version ..... they must be making a killing

And to think that 15 years ago Roundup was selling at over $60 a litre! Du Pont? Monsanto? Someone must have been creaming it then. Haven't bought any glyphosate for a while but I think the last lot was under $15 last year sometime.

[Balance]

The new chairman obviously doesn't believe the numbers and has told the finance guy to go back and do some honky dory stuff so they look better

Might get something with a 3 in front of it yet danger

Any company that mentions that word glyphosate these days seems doomed .... who makes the generic version ..... they must be making a killing

I have had another think about this dog and decided too risky to play, save as a quick trade.

I do not like to put money into any company which does not have a clue how it is tracking against budget and forecast.

2 weeks ago the CEO was all gung-ho and then, trading halt and profit downgrade.

It's something I mentioned before but of course, the one-eyed Nufarmers attacked my observation as self-interest.

Oh dear!

Nufarm in trading halt ahead of expected downgrade
John Durie From: The Australian July 14, 2010 1:10PM

TRADING in Nufarm stopped again today pending expected news this afternoon of yet another profit downgrade.

Nufarm would then join the likes of Elders in blaming the weather and falling profit margins for yet again missing targets.

The company has stuck with earnings forecasts of between $110 million and $130m, even as Elders and offshore giant Monsanto have cut their numbers because of the fall in glyphosphate prices.

Many analysts are already below the company forecast, with Macquarie’s John Purtell at $96m for the year ended July, and UBS’s Simon Mitchell at $94m.

The only surprise then about the downgrade will be the fact it hasn’t come before now.

[Balance]

Soulman, I am simply just making obvious observations.

NUF was looking good as a recovery stock but management has just confessed to having no idea how things are going from month to month - dangerous place to be in for any businesses. More so for a global business like Nufarm.

Warning way back in March 2010 when NUF was over $9.00.

Looking like a 50% loss comes Friday for those who chose to continue to believe in NUF's management.

[winner69]

Holy **** - guidance now $55-$65m

Hell's bells thats half of what they said a month or so ago

Will the shareprice fall another 50% ..... surely not

[Balance]

Holy **** - guidance now $55-$65m

Hell's bells thats half of what they said a month or so ago

Will the shareprice fall another 50% ..... surely not

How are you reading it, W69?

Put a PER of 12 times (very generous - considering the company's dismal earnings track record) and we get a market capitalisation of $660m to $780m.

Current market cap is $1371m.

So Sp could be down to $2.52 to $2.62.

Ouch!

[winner69]

And the analysts won't like debt going up $100m because of high working capital

Rathbone said the forecast is 'extremely disappointing' and made the comment " ....we need to be concerned with the impact on Nufarm's business and our ability to identify and react to changed market conditions as early as possible. We are now revisiting the systems we have in place to achieve that."

Now that Kerry has gone methinks the best result of revisiting the systems we (don't) have in place is for Doug to go as well ..... and start all over again

What a disaster

[Balance]

And the analysts won't like debt going up $100m because of high working capital

Rathbone said the forecast is 'extremely disappointing' and made the comment " ....we need to be concerned with the impact on Nufarm's business and our ability to identify and react to changed market conditions as early as possible. We are now revisiting the systems we have in place to achieve that."

Now that Kerry has gone methinks the best result of revisiting the systems we (don't) have in place is for Doug to go as well ..... and start all over again

What a disaster

So who are the smart ones? The Chinese of course - they WALKED AWAY!

http://www.youtube.com/watch?v=H4ibFq1aup8&feature=related

[Balance]

And the analysts won't like debt going up $100m because of high working capital

Rathbone said the forecast is 'extremely disappointing' and made the comment " ....we need to be concerned with the impact on Nufarm's business and our ability to identify and react to changed market conditions as early as possible. We are now revisiting the systems we have in place to achieve that."

Now that Kerry has gone methinks the best result of revisiting the systems we (don't) have in place is for Doug to go as well ..... and start all over again

What a disaster

More on the disaster :

Focus to change, says CEO.

http://www.reuters.com/article/idUSSYB00812420100714

Your pick, W69, on where you think sp will go down to tomorrow?

[winner69]

The $5,75 ones in May from the rights offer were at a 25% discount ..... but $5,75 seems bloody ecpensive now ..... another rights issue where punters been sucked in?

[winner69]

More on the disaster :

Focus to change, says CEO.

http://www.reuters.com/article/idUSSYB00812420100714

Your pick, W69, on where you think sp will go down to tomorrow?

You 'calculate' $2.50-$2.60 odd

I be generous and because I like round numbers I reckon close 300 tomorrow but Friday is another day

Play money time I think for some quick trades coming up

[shasta]

Holy **** - guidance now $55-$65m

Hell's bells thats half of what they said a month or so ago

Will the shareprice fall another 50% ..... surely not

That's a serious haircut, & so much for continuous disclosure!

[winner69]

That's a serious haircut, & so much for continuous disclosure!

Continuous disclosure and climate change don't go hand in hand

[shasta]

Continuous disclosure and climate change don't go hand in hand

What they didn't know they were so far below forecasts, i find that not only hard to believe, but borderline criminal.

How much do these "so called professionals" get to run the company?

From just 3 weeks ago!

http://www.stocknessmonster.com/news-item?S=NUF&E=ASX&N=337903

[Balance]

Many lessons to be learnt here - so many warning bells including 5 downgrades in 12 months.

Amazing the company raised $250m from shareholders at $5.75 just a few months back with a fourth downgraded forecast - and the market swallowed both the $250m and the $5.75.

Market is now expecting the sp to settle at below $3.00 - could be as low as $2.40.

From SMH this morning :

Ooh, that smarts!

IF THE Elders experience of a few weeks back is any guide, Nufarm shareholders are in for a bloodbath when trading resumes after last night's 50 per cent profit downgrade.

Operating profit is now set to come in at $55-$65 million for the year to the end of June, with back-of-the-envelope numbers suggesting earnings-per-share of about 20¢.

As with Elders, the market will be incredulous about claims the current slump in profits is cyclical when it seems structural factors are at play in the agricultural chemicals market.

After five profit downgrades, the temptation will be to assume that current earnings are the new base. At the market multiple, shares would trade at less than $3.

Let's not forget that Nufarm management turned down a takeover offer from Sinochem at $12 a share late last year.

Ouch!

[Stranger_Danger]

Awful announcement. Definitely won't even be *thinking* of buying at $4 and would be surprised if I buy today.

Definitely one more profit warning to go I reckon. These guys couldn't forecast that Friday comes after Thursday.

[Balance]

Awful announcement. Definitely won't even be *thinking* of buying at $4 and would be surprised if I buy today.

Definitely one more profit warning to go I reckon. These guys couldn't forecast that Friday comes after Thursday.

CEO still talking positively about Nufarm's prospects - is this guy for real?

http://www.theaustralian.com.au/business/opinion/nufarm-takes-the-weed-wand-to-profits/story-e6frg9if-1225891838275

Oh well, I guess he got away from raising $250m from the market so there must be plenty out there who believes in his 'glyphosated' words.

Agree with you that there is at least another profit downgrade to come. I am prepared to pick when it is going to happen as well.

[Balance]

OK - looking at some valuations coming in - $3.52 to $4.10.

Short-coverings expected to keep sp above $4.00 today, then a fall below $3.00 to be expected by end of month.

[Lego_Man]

I'm about to get cleaned out...

:mad ;:

[Balance]

I'm about to get cleaned out...

:mad ;:

Sorry to hear that. Hope ASX takes NUF to task - disgraceful behavior by management.

[Penfold]

I'm about to get cleaned out...

:mad ;:

Biggest hit I have ever taken. Lesson for me in this one is that Rathbone has not been frank and honest with shareholders. Numerous times. I should have bailed after the first time.

[Stranger_Danger]

$3.90 enough of a margin of safety? Nope

[Balance]

$3.90 enough of a margin of safety? Nope

EPS of 20c - $3.90 is PER of 19.5 times.

Nope - it's a $2.50 stock.

[Balance]

All too convenient - Hoggard resigns a few days before sp collapses.

Now nobody will know when he is selling.

[Balance]

Oh dear - admission they are in breach of banking covenant!

http://www.theaustralian.com.au/business/industry-sectors/nufarm-in-talks-to-adjust-loan-terms-after-earnings-downgrade/story-e6frg95o-1225892073453

[Balance]

No, I don't buy shares in a downtrend (any more).

But that doesn't mean I won't be when the upturn comes.

I do like the friendly "matey" bit. But what's this about ELD? Some connection here with NUF?

Let's wait for the uptrend.

There is money to be made here but from $2.50, me thinks.

[Stranger_Danger]

I agree - paying a decent multiple of what are hopefully (not guaranteed) cyclically low earnings, preferably with a "new broom" management coming in, would be a decent bet in the case of NUF.

Roughly 20 is not that mutiple.

[shasta]

I agree - paying a decent multiple of what are hopefully (not guaranteed) cyclically low earnings, preferably with a "new broom" management coming in, would be a decent bet in the case of NUF.

Roughly 20 is not that mutiple.

I think Balance mention a P/E around 12 (based on the revised forecast), & with profit downgrade after downgrade, any premium attributed to NUF will have long gone now, may even be hard to justify a P/E around 10 til the dust settles

[Stranger_Danger]

P/E of 10 on cycle low earnings would do me. I think Nufarm has a future. It has shot its reputation for a fair while, but Elder's it is not.

[winner69]

NUF traded between 250 to 450 from 1994 to 2002 ..... before its meteoric rise and hit $17 odd early 2008

Just shows you how irrational those years were ..... was NUF (and other stocks) really worth what they got to .... no

Now NUF back to turn of the century prices probably spend another 5-10 years trading between 250 and 450 .... funny how things always turn to some form of reality ..... and ending in tears

Phaedrus would love to have fun with a long/medium term chart of NUF and would no doubt point out that that nobody should really be shedding tears today

[Dr_Who]

Unfortunately for shareholders Sumitomo may have the last laugh and take this out when the sp are at its lowest. :(

[Footsie]

Phaedrus... Perhaps you might like to do a TA 101 on this stock.

Looks like a classic case of a stock in a downtrend that gave plenty of warning something like this was around the corner

[peat]

Phaedrus... Perhaps you might like to do a TA 101 on this stock.

Looks like a classic case of a stock in a downtrend that gave plenty of warning something like this was around the corner
I dont have quality charts available but here is a 10 year monthly and theres a clear head and shoulders with the break of the neckline at $9
You might have got out even earlier at around $12 on price breaking the 30 period average

[COLIN]

Biggest hit I have ever taken. Lesson for me in this one is that Rathbone has not been frank and honest with shareholders. Numerous times. I should have bailed after the first time.

Always watch the trend, Penfold. Watch the trend. It takes a lot of self-discipline to bail out when losses are mounting but, believe me, its the only way to go. And don't buy into it again until a firm upwards trend emerges. I am surprised that a number of posters on this thread appear to have held onto this one through all the downgrades.

SELL INTO WEAKNESS, BUY INTO STRENGTH.

And the market takes a long time to forgive any company that comes out with significant profit downgrades, let alone a series of them.

[Balance]

Always watch the trend, Penfold. Watch the trend. It takes a lot of self-discipline to bail out when losses are mounting but, believe me, its the only way to go. And don't buy into it again until a firm upwards trend emerges. I am surprised that a number of posters on this thread appear to have held onto this one through all the downgrades.

SELL INTO WEAKNESS, BUY INTO STRENGTH.

And the market takes a long time to forgive any company that comes out with significant profit downgrades, let alone a series of them.

Ego got into the way?

Takes a big man (or woman) to admit that he (she) is wrong.

[Phaedrus]

Today NUF plunged 28% to close at $3.75. Even before this, NUF was in a short-term downtrend, a medium-term downtrend and a long-term downtrend. That's pretty much as bad as it gets. Nevertheless I guess that some poor souls were surprised that the downtrend accelerated. Yet again.

No-one with so much as a nodding acquaintance with TA would have been holding this stock. Longterm holders would have sold 2 years ago at around $17 (dark green trendline break) and not have bought since. (Red trendlines mark the accelerating downtrend).

More active investors trading the "medium-term" trends that comprise the long-term trend would have sold at the magenta arrows and bought at the light green arrows. They would have been out of NUF for the last 7 months.

This chart shows how oscillator divergences provide excellent confirmation of other trading signals such as the trendline breaks shown here. A Bearish divergence occurs when an uptrending shareprice makes higher highs while the oscillator makes lower highs. A Bullish divergence occurs when a downtrending shareprice makes lower lows, but the oscillator makes higher lows.

http://i602.photobucket.com/albums/tt102/PhaedrusPB/NUF715.gif

[Balance]

Thanks, P - as clear a chart as ever that NUF was to be avoided.

Then, there were the warnings signs :

1. Four (4) profit downgrades - all indicating a business in structural decline.

2. Management selling.

3. The Chinese doing due diligence and WALKING AWAY.

4. The bad results from Elders and Monsanto.

5. The valuation downgrades by analysts who cover the stock.

We all make bad investment decisions from time to time - this one was flashing red lights since Jan 1st however, telling punters to stay clear.