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14-04-2022, 02:13 PM
#271
Originally Posted by Shareguy
A wise man said to me “ never invest in any company that makes most of its money from food.”You only need to look at my food bag, Sanford, A2 milk, New Zealand king salmon and see that advice was good.
Used to be a saying as well to NOT invest in anything which eats, swims or have 4 legs.
Was true when many fishing, farming and bloodstock companies were listed on the NZSE.
They were suited really more to private ownership.
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14-04-2022, 03:33 PM
#272
Originally Posted by Shareguy
A wise man said to me “ never invest in any company that makes most of its money from food.”You only need to look at my food bag, Sanford, A2 milk, New Zealand king salmon and see that advice was good.
I have never been a shareholder in New Zealand king salmon but after a brief look at the capital raise announcement I feel sorry for all the existing shareholders. They are being asked to stump up money when the issues of fish mortality might be fixed “if” approval for the new farm is given. If they dont get approval and nz continues to have high water temperatures which is predicted to happen, then you might be throwing more money in for nothing. Will there be a future capital raise if they are successful in the new farm consent. I also noticed that a number of the existing farms consents expire in the next two years.
The reason this is so discounted in my opinion is because the main shareholders set the price for the risk involved. Good luck to shareholders. I think you are going to need it….
might be true for next year with issues such as the war in ukraine making fertilizer / potash etc etc so expensive and in short supply and inflation costs increasing the cost of production. not a good recipe for sales and profits maybe next yr
one step ahead of the herd
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14-04-2022, 04:19 PM
#273
Originally Posted by Shareguy
A wise man said to me “ never invest in any company that makes most of its money from food.”You only need to look at my food bag, Sanford, A2 milk, New Zealand king salmon and see that advice was good.
...
Hmm - while the companies you mentioned are currently all in the doldrums, I don't think that their main problem is that they make most of their money from food.
If we start with NZK - their main problem is that they ignored climate change. They could be huge money spinners if they would not grow their fish in too warm waters. A good company would know which parameters are relevant for their production - and even a brain dead dinosaur would know by now what impact global warming will have on anyway too warm waters.
Looking at the others - A2M had this one trick pony problem, MFB was listet as a dud with little growth perspective and lots of debts (as many non food companies as well: e.g. Feltex, Orion Health, MPG), and Sanford made just many hard to understand business decisions related to lack of managerial oversight and lack of due diligence.
Food producing was not the problem for any of the companies your provided ... and hey, I can think about many very profitable food producing companies: (in no particular order): McDonalds, RBD, Coca Cola, Nestle, Danone, JBS (well, profitable at times), and there are so many more. Probably all of us can think about very successful food producers (not necessary listed).
The real problem for NZK, A2M and Sanford is lack of competence to run a successful business - most likely unsuitable management and a board sleeping for too long (bad governance) ... and these things are not exclusive to food producing companies. And MFB - probably just sold under the wrong pretences.
BTW: before I forget it - currently holding Seeka and quite happy with my investment - yes, they make their money with food (mainly Kiwifruit and Avocados) as well.
Last edited by BlackPeter; 14-04-2022 at 04:26 PM.
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"Prediction is very difficult, especially about the future" (Niels Bohr)
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15-04-2022, 01:12 PM
#274
Member
Originally Posted by BlackPeter
If we start with NZK - their main problem is that they ignored climate change. They could be huge money spinners if they would not grow their fish in too warm waters. A good company would know which parameters are relevant for their production - and even a brain dead dinosaur would know by now what impact global warming will have on anyway too warm waters.
Mr Peter, it appears you've spent more time writing this comment than reading up on the company.
Here's a couple of places to get you started:
https://www.mpi.govt.nz/dmsdocument/...borough-Sounds
https://www.kingsalmon.co.nz/open-ocean-blue-endeavour/
You can even read a couple of slides on the topic in the latest investor presentation on what they're doing in their current locations to mitigate mortality. It would almost appear that they're well aware of the issue. Go figure.
The decision on where they farm sits with government (not NZK)
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15-04-2022, 04:26 PM
#275
Originally Posted by BlackPeter
Hmm - while the companies you mentioned are currently all in the doldrums, I don't think that their main problem is that they make most of their money from food.
If we start with NZK - their main problem is that they ignored climate change. They could be huge money spinners if they would not grow their fish in too warm waters. A good company would know which parameters are relevant for their production - and even a brain dead dinosaur would know by now what impact global warming will have on anyway too warm waters.
Looking at the others - A2M had this one trick pony problem, MFB was listet as a dud with little growth perspective and lots of debts (as many non food companies as well: e.g. Feltex, Orion Health, MPG), and Sanford made just many hard to understand business decisions related to lack of managerial oversight and lack of due diligence.
Food producing was not the problem for any of the companies your provided ... and hey, I can think about many very profitable food producing companies: (in no particular order): McDonalds, RBD, Coca Cola, Nestle, Danone, JBS (well, profitable at times), and there are so many more. Probably all of us can think about very successful food producers (not necessary listed).
The real problem for NZK, A2M and Sanford is lack of competence to run a successful business - most likely unsuitable management and a board sleeping for too long (bad governance) ... and these things are not exclusive to food producing companies. And MFB - probably just sold under the wrong pretences.
BTW: before I forget it - currently holding Seeka and quite happy with my investment - yes, they make their money with food (mainly Kiwifruit and Avocados) as well.
No complaints with RBD - BP, or haven't you ventured into that one ?
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15-04-2022, 04:29 PM
#276
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19-04-2022, 02:59 PM
#277
Hard to know where this company will end up, so much depends on the success of the Blue Endeavour project. Couldn't find any projections for it but had a good look at the historical financials up to 31.1.22:
https://recastinvestor.substack.com/...-salmon-nzknzx
Comments and suggestions gratefully received. Cheers.
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19-04-2022, 06:33 PM
#278
Originally Posted by Recaster
Hard to know where this company will end up, so much depends on the success of the Blue Endeavour project. Couldn't find any projections for it but had a good look at the historical financials up to 31.1.22:
https://recastinvestor.substack.com/...-salmon-nzknzx
Comments and suggestions gratefully received. Cheers.
Great article, thanks.
So, if the Govt declines Blue Endeavour, the company is pretty much finished right? That has to mean it has a pretty good chance of approval then? Would be a bad look to kill the company unless they have some pretty darn good reasons not to grant approval.
BTC went to $69K and now $16K. Good thing I’ve been warning you since it was $3K! I was right!
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19-04-2022, 06:58 PM
#279
I had some of the double maple smoked regal salmon for dinner tonight. Doing my bit to keep this company afloat..
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19-04-2022, 07:23 PM
#280
Originally Posted by Entrep
Great article, thanks.
So, if the Govt declines Blue Endeavour, the company is pretty much finished right? That has to mean it has a pretty good chance of approval then? Would be a bad look to kill the company unless they have some pretty darn good reasons not to grant approval.
Thanks.
They still have a reasonable amount of equity as at balance date 2 1/2 months ago. But the debt is current.
Also I wonder if they are raising enough for the Blue Endeavour project. Perhaps they can borrow more.
I don't know if the company would be finished if approval is not granted. Profitability seems a tad low :-).
Closed at 46 today.
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