NTA $4.43 'shareprice re $1.90 , all time low, with PSA disease major contributing factor. Div re 10%. Liquidity terrible. Anyone stuck in this or any experience ,thoughts, researchers notes etc be appreciated,cheers
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NTA $4.43 'shareprice re $1.90 , all time low, with PSA disease major contributing factor. Div re 10%. Liquidity terrible. Anyone stuck in this or any experience ,thoughts, researchers notes etc be appreciated,cheers
I thought these were Investment Shares like SAT and LIC, so had never looked at them - but looking now, perhaps not the case and anyone can hold?
This is the classic "punt and pray". I am buying a little but keep lowering the offer prices and it keeps dropping....its either going to keep dropping as people keep doing the same or it will reach a point where existing holders cant be bothered giving it away. My guess is a lot of the growers have shares and and are uncertain about situation as well. As clint said, "are you feeling lucky punk"?
They are/were a very good company and are leading the fight against PSA bacteria whereas the beauracrats are sitting on their hands. If they can get an antibiotic working in the next 6 weeks they will have saved a billion dollar export industry and will be heroes in it cos they have skin in the game - biggest packing organisation and also own orchards. Otherwise if they fail (go the way of Italy) Te Puke & they are stuffed although there is still the avocados, and they have the best lab in the world now for PSA testing! I wish MAF and Zespri would get in behind them more. Will be an awesome story for a documentry or investigative journalist. Last year gold kiwifruit was the biggest paying land use in NZ ... this year it may be worth bare land value a potential disaster not much smaller than Christchurch.
p2r thanks for those details. Whether they can manage PSA without losing too much on the bottom line ,or not time will tell, i hope so, for the industry.One ex grower i spoke to is not optimistic and is stuck with his shares; liquidity is bad. Do Growers who sign up with the packhouse get offered shares and then can sell them on NZX afetr escrow? Im guessing yes, so tradeable Liz. Any kiwifruit growers on sharetrader with your eperience be great to hear,cheers.
In Todays Te Puke times "PSA halves value of kiwifruit industry" " On Nov 1 before PSA was found the industry as a whole was worth more than $4billion dollars. The loss in value had occurred despite the fact that PSA V ,the most virulent form of the bacterial disease so far affected only slightly more than FOUR PERCENT and that the majortity of growers harvested crops this season." 50 million dollars is avail to find a solution which includes new PSA resistant varieties.
I think you need to have leaves to see it, so wait for spring to see and if 4% of a population has a disease it can explode so to speak, especially after stress. It affects the gold especially which is the valuable one. Look what happened in Italy as they are ahead of NZ in the disease. I think the industry is wiped out there.
I think finding PSA resistant varieties is a good idea but you would be looking at many years to get them established and have to cut out the old stuff first. Just my thoughts ... I have no special insight.
cheers p2r. Looks like just one more for my long term spring watchlist sigh. Heres hoping those new leaves will be natures resistant perfection.
What about Satara? Isn't it cheaper compared to Seeka?
Cheaper? Dont know RW. Where is it listed? And shares MAY be more estricted to growers.
It's listed on the NZX as well plus there are no restrictions on its investor share register. Anyone can own them, however looks very illiquid as well. But I think its trading at 25% - 30% of asset values plus has revamped commercial management and board members in place.
Found it on NZAX 55c NTA $1.81. Last div mar 2010 2cents. 247 growers with 1123 canopy Ha, 113 Avo only growers. Reduced debt to $7.7mill (2010). Im no forensics accounts analyst but a value trap for the contrarian m,aybe.If they can manage PSA could be great divvy stream from SEK or this co.Too risky for me right now.
If I remember correctly there have been two takeover bids for SAT in the past few years. Both made by Eastpack.
Believe latest bid was at ~$1.25 / share and was about to close but then PSA struck and Eastpack withdrew till they worked out the consequences.
Prior bid was by Eastpack in 2006 or 2007 and I believe in the $1.40 - $1.50 range / share and Satara rejected it I think - dumbarse board back then? Board looks like its been almost fully changed since as a result of insto shareholder agitation.
This one took a dive today - 20 cents or 14.29%
https://nzx.com/markets/NZSX/securities/SEK
Gross Dividend yield at 22.5%
I know there has been trouble in the Kiwifruit industry lately, but could this stock be one to watch? That divi yield is... well off the charts so to speak. Obviously one would want to wait for a confirmed uptrend before buying.
Huge gamble RazorX. New leaves will be emerging soon on the kiwi vines.Will there be PSA symptons on them and will they spread like wildfire.? Will they find a way to control it ? Some say yes with this 'antibiotic' spray.Can they learn not to go like Italy? where the wipeout rate was horrible.Will watch and listen and read.
My understanding is that Seeka has not committed to go with the antibiotic spraying for the Gold variety as they don't have enough info on the potential consequences. The jury is therefore out on that one. So until the new leaves emerge and will be analysed, noone really knows what will happen. A very risky investment indeed !
Seeka def arent using spray at this point.Other orchadists are and heres hoping.Orchards aligned to diff Management/Packhouse companies next to each other puts them all in the same boat but could cause probs.. Seeka have some highly qualified people looking for a way to deal/contain PSA. Best of luck to the Industry.
Word has it that they are preparing to downsize,offering vuluntary redundancy to permanent staff,in expectation of a reduced crop and margins next season,hmmn just how bad is PSA,last time I heard it was only 2% of total crop.
I think the operative word here maybe " Permanent " staff..
If allowed to get out of hand in times of plenty..
Very difficult to reduce when times are lean..
Easily replaced ( most packhouse type of operations ) as casuals when they need more staff..
Much easier to lay off !!.
Could be a good move .. Profit wise as they say ..
[,hmmn just how bad is PSA,last time I heard it was only 2% of total crop.[/QUOTE]by kizame .The new leaves are coming on the vines . PSA could spread like wildfire ala Italy. Reading a Seeka announcement(6month report) Swift orchard has been written off $572k already. 300,000 trays of gold were not harvested because of PSA. This is just the beginning. Hope like hell they can find a way to control it.
I suggest anyone considering buying into Seeka or Satara have a look at Seekas latest announcement. It finishes with "...outbreak of the disease has the potential to seriously impact on future earnings of the company" .Thats honesty for you.
I haven't heard anything much on the research side that would be positive medium term. Last season they tried the antibiotic/ probiotic spray from BASF which I heard was useless but I imagine desparate growers are trying it. Not Seeka anymore. The best hope was for drilling into sap and pumping antibiotic under pressure - used in apples apparently. Otherwise what is there ... rip up the vines, look for resistant plants, or head in sand.
I would say at the moment the wealth destruction in the industry would be similar to finance companies in 2007...but opportunities for tax write offs or more positively a white knight in a lab coat...
SEK lowest offer of 7,598 @ $1.77, could be placed to pop.
Edit. Lowest Bid was 10,000 @ $0.93
Lowest Bids
5000 @ $1.00
4000 @ $1.02
Highest Offers
7,598 @ $1.77
2,534 @ $1.78
now up 10.87%
They were well oversold in the PSA panic. But interestingly, Satara aren't showing the same resilience. Any ideas why not ?
I think Satara are having their difficulties,1 season ago Eastpack were looking to merge,then came PSA and they pulled out,then SEEKA had their go,I don't think they are efficient enough in this competitive industry,it all comes to packout cost,i.e cost of packing per tray,and apparently they only have one decent packhouse right in Te Puke,with a few smaller less efficient ones,plus they are losing growers.
Thank you Kizame.
Should've bought more.
Should've bought more.
Should've bought more.
B*gger !
Is there still time, d'you think ? Or move on to Satara ?
highest offers around $2.45 today.
The NTA is like 3.89 per share as of December....at SP of 1.45 last trade and earnings of 49 or something? this could be a usefull SPEC for the bravehearted. Until its drop it was trading 2.50 to 3 plus with dividends.
Be careful with this one,we have had a dry summer so PSA has been slowed,they have shed a lot of staff,and with that goes an aweful lot of experience.they have grafted over 2,000 hectares in new variety gold,but time will tell.
I was always told never invest in Horticulture,meet processing or airline stocks.
I drive past recently grafted over kiwifruit stumps often. Im sure i can see dieback in the new leaves already. Hope its not PSA. The new variety G3 i think it is, was only thought to have more resistance so heres hoping.
Well the usefullness of that would be totally dependant on who told you wouldnt it? Air NZ is up nicely..dont know about others but wouldnt exclude them from being looked at objectively. People gotta eat, growing population, more people flying worldwide. If people didnt believe in these industries and didnt put money and capital into them would be a waste of NZ resources and a criminal lack of attention to what we do well.....growing great produce and meat products.
And as a long term investment, compare air to rym,I know which id prefer,they are only good for a short term upward movement.
Have a look at the track records of the likes of seeka,satara,tasman agriculture from a few years back,affco.Hmmn find anything attractive to hold onto there?
Check out that volume today, a massive 23c rise... on volume of 4800 and a value of less than $8k? Whaaaaat??
Thats why I said the degree of usefullness would be dependant on who "told" him. Perhaps he wasnt "told" so much as read it somewhere in which case it would have had more believability if the "teller" had been revealed. The devil is in the details. Personally I dont believe in God like status so even if St. Warren had said it I would still do my own research which was my point after all.
I wouldnt touch any as a long term investment ...doesnt mean many people dont have good jobs, produce valuable, usefull products , have succesfull business's and make good livings out of these sectors. Dismissing them as unworthy of investment is simplistic and smacks too much of generalization and too little thought.
Sparky, there website is quite informative www.seeka.co.nz . They are also getting revenues from green kiwi which is not affected by PSV, by growing advocado sales, packhouse storage and shipping etc.. Not just growers so they actually have good diversification within that sector. PSV is still a problem but eventually this has to be overcome (or bypassed by new cultivars)
The contorting of the English language never ceases to amaze.
I've just heard the Seeka boss talk about having to "restructure our headcount". I think I know what he meant.
6 cent div announced. heres hoping the cycle is entering an up one. Anyone heard how the crop is shaping up and i havnt heard any negative re pSA effecting the graft overs atp. Dryer conditions have helped.
7c div actually. Congrats BB everyone else is eating dirt. See the re $1.25 spread :)
No one interested in Kiwifruit these days... ? :/ looking at some Horticulture based stocks, but Seeka seems scarily quiet compared to other couple hort stocks on NZX. Hidden gem or?? Would think the Kiwifruit industry is on the upside after the recent history, or is it still seen as a high risk call?
Disc: noob
Used to watch it around 90 cents during the PSA scare. Was too illiquid for my taste. Should have eaten the fruit (and the skin too).
Disc: Canadian
This is not particularly liquid but is worth keeping an eye on looking for the occasional dip. Your interest is probably well placed but maybe ill timed since its SP may be close to fully priced. Last 6 months has been between 2.65 to 3.50. I think there is still upward movement however in the future and even now the dividend yield is quite respectable 15 cents 2014 (4.84% plus imputation credits.) They seem to be a well run outfit and are quite diversified in what they do so I don't believe they are high risk. I have been holding since 2011 and it has been a good investment for me..nice dividend yield and also capital growth.
I had a holding in this but sold after it was hit by PSA, really hurting now that it share price has recovered !
Yea, it was a valuable lesson. Really shows the importance of patient.
I decided to grab a tiny bundle at 306 since the dividend yield and diversification it will give me is attractive. Never know, current macro events such as the free trade South Korea agreement and lower dollar could push some more growth. Appears like a strong solid firm as you say so for a long term holding sounds good :)
In my brief year of investing I've found chasing a low fluctuation far too speculative. If its a solid company can always top her up when that comes along and if it doesn't eventuate no need to buy in at a higher price.
I think you've overpaid slightly. Not sure why Seeka is issuing dividends with PSA still lingering, and the fact net debt is higher, probably be around 25 million as they will be cash flow positive in 2nd half at full year makes enterprise value of 25 + 48 = 73 with EBITDA of 11 - 12 = 6 to 6.5 times, or 73 / 3.2 forecast NPAT = 22.81 times. Those numbers seen too high. Probably should only be around $2.70 to $2.80
JWI has a range of corporate governance issues along with secularly declining sales.
SEK's PE might look high but part of that is because depreciation overstates maintenance CAPEX and the stock is selling below book. SEK is generating strong cashflows and is in a cyclical upswing, as per management forecasts of a long term increase in disease-resistant high-margin golden kiwifruit volumes over the next few years. Given where equity market valuations are at it's real cheap, but there isn't a lot of liquidity so you need to be careful.
I can assume then that you have a holding in this as it "real cheap"?
If their cash flows are as strong as you put it they wouldn't need to instate a DRP. Their P/E is cheap compared to other nzx shares but for a company still hampered by PSA, there's still a fair bit to do. However, one positive you have pointed out is their NTA which is healthy.
No I am not a holder because it is too illiquid to build up a reasonable holding that you can confidently dispose of the way it is currently trading - that and I am not an expert in the kiwifruit industry, and cannot justify the time investment that knowledge would require given the illiquidity. If I was a holder though I wouldn't be a seller at current prices (because I would have done my homework before buying, and I have a feeling this is a goodie). Have done a bit of work on this one now and will probably do more if I see it drop significantly and I feel there is a lot of upside - may be a buyer then.
While DRPs can be and often are associated with weak cashflows they do not need to be. Just look at the financials - business has been generating strong FFO and CFO with minimal CAPEX over the past few years. CAPEX forecasts in the annuals/presentation are not onerous. Peak FFO was a lot higher than where we are right now, so a lot of potential for non capital intensive cyclical growth as things normalise. CFO bought stock on market recently.
In case you are a beginner I want to caveat all this with I am not an expert in the kiwifruit industry and I might be totally wrong on where things are in the cycle (maybe they are permanently impaired - anybody here have a view on that?) - I haven't done the work to be confident. always DYOR and don't listen to anybody on a forum.
Bummer re fire destroying post harvest shed last night
Packhouse Fire - 5 March 2015
No one injured. Should not affect earnings. More of a distraction at this stage.
The earnings announcement last week beat guidance by about 8%.
Underlying earnings ( excluding one-offs and assuming full year of Glassfields) comes in at 27.5cps. This puts SEK on a pe=11.8 at the current price of 3.25.
But the real story here is the massive growth of G3 gold coming on line in the next 2 years. SEK have already announced volumes for 2015 are going to increase from 21.3m trays to 24-25m trays. There should be a further uplift in 2016. I suspect the FY15 profit growth will strong. However, guidance is probably 6 months away.
Its a shame about its lack of liquidity. Actually has been a very good dividend earner for me and I'm surprised there hasn't been more interest in it. An example of a good business quietly going about its business, making money, not taking any risks, managing its exposure by a diversification program and effectively weathering a bad time in an admirable fashion. I can see this gradually gaining some followers and in years ahead should continue its positive momentum.
You know Kiwifruit is back in vogue when Orchards are being syndicated
http://myfarm.co.nz/opportunities/kiwifruit
Just more evidence that volumes are on the rise. Given SEK make most of it's money though post-harvest, volume is more important than the commodity price of the kiwifruit. It should be noted that Seeka do do some orcharding of their own.
A good article by Alan Williams
https://agrihq.co.nz/article/seeka-continues-to-improve-its-profit?p=321
Take outs for me:
"Seeka packed 21.34m trays and was budgeting for 30m trays by 2018, with the bulk of the increase being in Gold fruit."
"And a fire at its Te Puke packhouse and coolstore complex would not hamper this season’s output."
"Seeka was interested in acquisitions and the balance sheet gave it “financial freedom of action”, Franks said."
Gales and heavy rain forecast for tauranga, tepuke area monday from PAM.Eastern ranges of BOP high chance of severe southeast gales and rain. Northern Hawkesbay and Gisborne on hitlist too. Central and South hawesbay are in for it too. Just hope its downgraded.
It appears there are some tail winds in the kiwifruit industry
https://nz.finance.yahoo.com/news/ki...050442586.html
Even made tv3 news
http://www.3news.co.nz/nznews/new-ki...try-2015032816
Seeka will be packing a lot more kiwifruit this year. Should translate to $$$
Some discussion on a competitor, Eastpack, here: http://www.sharetrader.co.nz/showthr...l=1#post567649
Looks like Avocado growers are enjoying great yields from Seeka
http://www.seeka.co.nz/top-avocado-returns
All bodes well for the half year result
Looks like they are having a good harvesting season with around 15M trays packed already, slightly ahead of schedule with about half a million being packed per day at present.
Fruit quality exceptional and volumes up somewhat.
So far so good so hopefully well on track for a good result.
For those interested, a few more details on their avocado business
http://www.scoop.co.nz/stories/BU150...y+17+June+2015
Very interesting and positive reading. Thanks for posting noodles. Looks like we may be in for a good year with an outstanding harvest season just completing. Looking forward to the divie increase :t_up:
A very positive announcement from SEK today. Harvesting numbers up over 10% from what they were forecasting at the ASM less than 2 months ago.
Michael Franks on the radio. Sounds good
http://podcast.radionz.co.nz/busines...manage-048.mp3
Thanks for the link noodles. Certainly a very good start to get a harvest like this. Hopefully Zespri will do a good job selling it all. Meanwhile SEK is charging for full warehouses and then all the load outs to come. Yes Percy, we are indeed well positioned
Sneaky buy today Percy
Bargain at $3.02
Pity the seller didn't have more for you
Its been really illiquid for many years which can be a prob getting in or out in any but tiny volumes.. Only two trades over 50,000 in 2 years!! .SEK in a sweet spot atm but no change in liquidity. Tradeswell under NTA too although i haven't checked lately.
Correct.
SEK has only 15,551,233 shares on issue, giving a market cap of $47,431,261 at sp of $3.05.NTA is $3.70.
So it is not a FBU or a RYM,however with the Kiwi fruit industry recovering from PSA,this very well managed, focussed company offers possible excellent rewards, for those of us who are prepared to invest in small illiquid companies.No I do not hold anywhere near 50,000 shares in SEk [at this point in time].
Just part of a well diversified portfolio.
It is nice to have a discount to NTA. However, I think a path to higher profitability is what investors are really after.
Fortunately, we know a lot already:
1. In 2014, SEK packed 21m trays.
2. In 2015, SEK packed 27m trays. This is forecast to increase to close to 30m by 2016 (see AGM presentation)
3. In 2014 and 2015 packing margins have been tight across the industry.However, with more fruit coming onto the market, storage capacity will require packers to increase capacity. I'd expect margins to normalise to reflect the lack of spare capacity
So to summarise, in the next couple of years, we should see a 50% increase in volumes and a normalising of packing margins. It is not unrealistic to expect a massive profit jump from 2014 levels.
Shares traded hands at about $3 today. This is the same price as the CEO, Michael Franks, was buying at earlier in the year. So whoever is selling is effectively on the opposite side of the trade as the CEO.
growth in kiwifuit from 95m trays to 130m in 5 years
http://podcast.radionz.co.nz/busines...ercent-048.mp3
Read more » Future looking good sobered a little by this Zespri report
What do you folks make of the Zespri talk of headwinds...seems a curious thing to suggest headwinds when the currency has dropped so much ?
Hi Roger,
Green Kiwifruit prices are forecasted to drop around 10% for the 2015 season.
But this needs to be put in context.
At an EBITDA level, post harvest operations are about 75% of profit. Post harvest operaters do not really care about the price of the fruit. It is all about volume (someone correct me if I'm wrong).
Seeka also has a Orcharding operating. This will be affected by the drop in price. However, they will also be enjoying a boost in volume as Gold come on-line.
Overall, I see the growth in volume being a far greater driver of growth than the price.
What effect on Seeka's exports to Australia do you see?
I see them growing.
I thought Zespris comments a bit weird but i guess they can see what we can't.Int article from Zespri. For example re 300 million trays of kiwifruit are grown and consumed in China.!! Zespri wants to grow fruit in China again.The last attempt found lots of illegal growing.
I spoke to a Zespri rep based in China a while backand he said their ultimate goal was to market the kiwi fruit in China and not just to its ports. Good luck with that and with their 4 new importers. Two of the last were found guilty of smuggling or under declaration
Wiser Zespri eyes growing fruit in China
IIRC, Zespri's hedging policy runs to about 150 pages of gobbledygook, so expect them to be fully covered at much higher levels, possibly without some of the underlying USD sale prices locked in. Unfortunately it's a reality that most exporters are required to keep themselves well hedged, usually to protect the arses of the board's governance policy, secondly, banks also insist on there being a hedging policy to be adhered to, else no money honey. Thirdly, I have witnessed first-hand from in-market experience, the expectation of overseas buyers to 'have some part of the benefits of a lower local currency' In other words, we're going to lower our USD pricing sorry chaps - can't have you making too much money out of us eh? Perspective from a crusty old ex-treasurer (my treasury hedging policy ran to 1.5 pages):D
I have been surprised how unloved SEK has been recently resulting in a weak SP. I am not unhappy about it as it has given me time to load up. They will be announcing their HY results later this month and I am expecting a ripper. As they have already announced to the market some time ago, their harvesting/packing was ahead of forecast. I believe it continued at pace throughout the harvesting season and is up at least 30-35% on last year. Of course they still are reliant on Zespri selling all the fruit but it is all looking reasonably promising.
I think there is little doubt that both revenue and profit will be up by quite a significant amount from last year and I also expect a healthy increase in dividends. I suggest PE will be in a single number when the HY results are out so for me, SEK is due for a major rerating by the market.
ANZ Commodity Prices recorded a monthly decline in horticultural prices of 1.1% - this was stated as been due to both kiwi and apple price declines. That said I like the look of both SEK and Scales...
Liquidity has been terrible most of the time.Two trades above 100,000 in the last year with most of the rest just a few thou. Hard to get in or out in any meaningful vol . Growers being shareholders too creates possible conflict?
Yes possible JT but they are small holders so hopefully the security of supply they provide will outweigh such concerns. I think we will see SEK diversify and grow more into being a general produce company, rather than just Kiwifruit and Avocado. I look forward to the strong HY report this month and hope it will propel SEK onto a few more radar screens.
I often think one must approach illiquid stocks with the owner's eye.
A farmer,plumber,manudacturer,retailer has all his wealth tied up in his business for a great many years.Often millions of dollars.
So a stock such as SEK, if you buy with the owner's eye,making sure you have fully researched the company,and know how the Kiwi fruit industry is performing,and how SEK management are taking advantage of those opportunities,you will be less inclined to worry about selling.
Think Warren Buffett.He would not mind if the market was closed for 5 years.!
Growers being shareholders.Security of supply is essential.You will note how hard CVT have worked of have secure supply.SEK are looking forward by doing the same. Positive.
And so it came to pass. that the game changed with the Seeka announcement, late today,of an Australian acquisition of A$22mil.;Bunbartha Fruit Packers,whose lovely brand is "Austfresh".I googled Bunbartha Fruit Packers and it looks as though Seeka have brought a great business.
Yes looks like a great fit bought at a reasonable price. With the fantastic year SEK is having, I would not be surprised if we see further acquisitions to grow and diversify in a steady and well planned manner. The market will appreciate in the next few months what a great year SEK is having which will be confirmed by the upcoming HY announcement