Originally Posted by
BlackPeter
Valid points, but feel a bit one sided. Things are not either black or white, but mostly grey ...
PWG has at current (@47cents) a forward PE of below 10 - and while last year was (despite all the dairy gloom) not too bad (but not too good either) I think that a normalisation in the dairy sector is more likely than not. For sure, this should improve PGW's business case?
It feels as well that markets see the NZD at the moment more in the upper part of the cycle. If & when it drops (as it must), this would be a shot into the arm for all of NZ's agriculture. Must be good for PGW.
I'd see "fair value" for this share still above 50 cents (my model puts it at 52 cents), but agree that given the current market volatility it is more likely to drop a bit more from here, before it gets up again. I certainly expect them to fall into the mid 40'ies, and given the markets tendencies of overreacting into the low 40'ies. Anything below that would be in my view an amazing buying opportunity (or more than the expected correction).
Discl: sold out (but a minute number to remind me to check regularly for the trend change ...);