PGW - PGG Wrightson

[percy]

Added to our holding at 54 cents just 2 minutes before the downgrade.!!!!

[BlackPeter]

Added to our holding at 54 cents just 2 minutes before the downgrade.!!!!

Good example for a situation where TA could have been deceiving - I guess the trend (all over MA100) looked all looked nice and fluffy, didn't it? On the other hand - it just bounced on Friday at the MA200 ...

Anyway - I hope it was just a small addition. Better focus on your HGH holding - we hope together this will do better (and I am sure, it will ...).

[Snoopy]

Good example for a situation where TA could have been deceiving - I guess the trend (all over MA100) looked all looked nice and fluffy, didn't it? On the other hand - it just bounced on Friday at the MA200 ...

I am not sure why you might expect TA would be any use with PGW right now. PGW is in a special situation where it is waiting on decisions from the Commerce Commission in New Zealand and its equivalent in Australia (these two now confirmed) , and the OIO in New Zealand and various other smaller associate businesses. The 100 day moving average is just a long enough time period so that it would typically cover two or three board meetings. That is just enough for a proposal to be put to the PGW board (for example), researched over a month (or two months) before the next board meeting, a decision made and that decision announced to the market. There could be a short term underlying earnings change based on the farm earnings cycle that could cause the share price to react to current market conditions. But in this instance, any such changes are overwhelmingly dwarfed by the cash potentially coming into the company should the seed business sale go through.

The sale of the seed business was announced on 6th August 2018. The commerce commission(s) OK(s) were announced on 19th February 2019, just over six months later. The OIO has not yet reported back. Certainly none of these organizations are on anything near a 100 day timetable, or for that matter, any predetermined timetable. So on the surface, it would seem to me quite foolish to make a buy/sell decision for PGW based on a 100 day moving average statistic.

SNOOPY

[BlackPeter]

I am not sure why you might expect TA would be any use with PGW right now.

Did you hear me saying that or is that what you read out of my post? Interesting.

Market price is always determined by a huge number of parameters and driven by all sorts of events. Some of them the market can predict with a meaningful likelyhood (and in that case TA is helpful) and others it can not. But we both know that, don't we?

Recent price drop was due to a profit downgrade which would have been predictable for an insider or a market expert, but obviously not enough people closely following the trading conditions - i.e. TA was in this case deceiving ...

That is what I meant.

[Snoopy]

Market price is always determined by a huge number of parameters and driven by all sorts of events. Some of them the market can predict with a meaningful likelyhood (and in that case TA is helpful) and others it can not. But we both know that, don't we?

Recent price drop was due to a profit downgrade which would have been predictable for an insider or a market expert, but obviously not enough people closely following the trading conditions - i.e. TA was in this case deceiving ...

That is what I meant.

Recent price action (over the last couple of months) has seen the share price slip from around 55c to 47c, whereupon the news of the commerce commission tick saw the share price suddenly jump to 55c then creep up to 57c. Upon the trading update, the share price dropped as low as 50c intraday, before bouncing up again to 54c. The way I look at this, the share price, has fallen a net 1c (the 55c to 57c rise being a transient short term reaction) since the profit downgrade was announced, verses an 8c gain with the a significant takeover hurdle being passed.

While the trading update may have indeed been anticipated by insiders and may have been reflected in the share price trend prior to announcement, any effect from that was absolutely dwarfed in the opposite direction by progress towards the seed division sale. The jump reaction on the commerce commission confirmation would suggest this decision as not leaky, and not able to be anticipated by following the 100 day MA price. That was the point I was trying to make.

SNOOPY

[tim23]

If the deal goes though and you get paid say 38c a share - market is trying to value remainder of business.

[steveb]

If the deal goes though and you get paid say 38c a share - market is trying to value remainder of business.

There appears to be a couple of things that will affect the ongoing trading of PGW and that would be the joint venture with DLF over research and development.also the seed distribution agreement with DLF,how will they contribute to the bottom line.Snoopy might have some ideas in this area,but for me I don't have a clue!

[Snoopy]

There appears to be a couple of things that will affect the ongoing trading of PGW and that would be the joint venture with DLF over research and development.

I didn't know there was a joint R&D venture between PGW and DLF! A quick google search yielded this:

"DLF says there is limited overlap between the Wrightson seeds business and its own Canterbury-based offshoot. DLF Seeds NZ was set up in 2004 and now employs 12 people."

Does the 'limited overlap' refer to a joint venture? Or does it just mean they are both in the turf seeds and cool season forage business? Perhaps someone can clarify that?

Would not any joint venture between PGW Seeds and DLF become simply a wholly owned DLF venture under the PGW Seeds acquisition deal?

also the seed distribution agreement with DLF,how will they contribute to the bottom line. Snoopy might have some ideas in this area,but for me I don't have a clue!

Steve, the seeds purchased by 'PGW Retail' are purchased on an arms length basis from the seed division already. That means, in the short term at least, there should be no difference whatsoever in the profitability of 'PGW Retail' as a result of the seed division sale. Longer term, IMO, the 'One PGW' strategy will be weakened because there will be no particular reason why 'PGW Seeds' (or whatever it is renamed) will see 'PGW Retail' as a favoured or optimum channel through which to deliver its seed products.

SNOOPY

[winner69]

Seems to be a pretty good result

But l think I’ll leave it to snoops to work through the detail for me ....especially leaving the discontinued bit out

http://nzx-prod-s7fsd7f98s.s3-websit...139/295804.pdf

[winner69]

The company releases didn’t look as grim as this article headline

WRIGHTSON PROFIT PLUNGES 99% WITH CONTINUING BUSINESS DOWN 24%

http://www.sharechat.co.nz/article/9...s-down-24.html