PGW - PGG Wrightson

[Balance]

as tree fellers would say timber , just before the tree falls over.

As BS would say.

[Snoopy]

As BS would say.

It's OK Balance. You don't have to have been around this forum for long to know what to do with bull's 'shock jock' 'down ramping ravings'.

as tree fellers would say timber , just before the tree falls over.

The crazy thing is, all bull has to do is change his handle from 'bull' to 'bear', and his comments wouldn't draw the ire of anyone. A 'bear' handle would let everyone know exactly what flavour of comments to expect from him.

Investors need to keep in mind that the market is always looking at least 6 to 12 months down the track. So farmers not buying tractors today, leaving aside the fact that PGW do not sell tractors, is 'old news' for the market. NZ is still primarily a rurally lead market. So things on the farm have to improve first, before that money filters through to the cities to lift consumer malaise. That means if a hip city dweller is using their own day to day experience of judging where the country sits economically, that view is 18 months to two years behind where the market is pricing rural sector shares today.

Buying PGW shares this month, means I expect to see farming 'green shoots' just before the end of CY2024. I might be wrong about that. It could be a year away or even 18 months away. But the key takeaway this week for PGW is that conditions down on the farm are not materially worse than a month ago. And the board room fracas, that triggered a rapid share price fall, with Alan Lai is over. Yet the PGW share price has declined from circa $3 to circa $2 in a month, with very little change in the company and market fundamentals over that time. 'Mr Market' was either right to value the shares at $2 or $3. But he can't be right with both valuations. Currently, and taking into account that the shadow FY2022 and FY2023 were particularly good years which cast a expectant forward shadow that may never be matched, I would plump for the middle and say fair value right now is $2.50. That is where I expect the share price to sit by the end of the year, before the next farming cycle take off. So people buying PGW shares on the market today at $2 are being paid very well to wait until December. Therein lies my 'buying thesis' for accumulating PGW shares now. Yes no divvie now. But Alan Lai will ensue that dividends return sooner rather than later.

SNOOPY

[winner69]

PGW shareprice was $5.70 odd not that long ago

At $2.00 they must be a steal

[Toddy]

I see that the annual Canterbury AnP show has been cancelled for November 2024.

The main reason given was tough economic conditions. They rely on advertising and sponsorship deals from the Agriculture sector to fund the event.

We are talking about the heartland of South Island farming here.

Alarm Bells?

[Snoopy]

PGW shareprice was $5.70 odd not that long ago

At $2.00 they must be a steal

That $5.70 was based on a couple of stellar years where all sectors of the rural economy grew in tandem (I don't ever recall that happening before), and there was takeover speculation swirling around the company (unjustified in my view, but I can't deny that it was there.) I don't see the future ducks ever lining up like that. So I think I can safely say:
"We will never see the price of PGW shares climbing to the highs of $5.70 and above ever again."

What will the high point be in the next business cycle? If $2 (or thereabouts) is the low, I would say $4 (or thereabouts) will be the high. If things overheat above $4.50, that would be a sell down signal. But even if $2 to $5.70 is a fantasy, $2 to $4 is still a good opportunity.

SNOOPY