PGW - PGG Wrightson

[Queenstfarmer]

Still a few distressed sellers out there for the hunters and collectors to pick up large amounts for a song!

[Snoopy]

If you believe what you have written, you should be out.

Like I said Balance, I topped up on the assumption of no value in the Australian seed business. Arguably one could say that as of 30-06-2012 this was correct. Any value that does emerge will be a bonus, which I have paid nothing for. It might still be valueless as of 30-06-2013. I am banking on some value emerging eventually. But I do not have a date on that. Nor, do I need a date. All I need is patience. My action of holding PGW is only irrational if I have a date of 30-06-2013 where a payback is demanded.

SNOOPY

PS I note that revenue was down 4% and EBIT was down 8% in the Agridivision of just reporting Skellerup for the half year.

[Snoopy]

Sadly, Snoopy reminds me of another character who has since disappeared from ST. That individual was always right. Yet he lost so much money! Guess why?

I have put my case down in numbers Balance, for 'fair value' at PGW being 31c. If you don't like the message, I guess it is only natural to have a go at the messenger. But is 'kicking the dog' a viable long term investment strategy?

SNOOPY

[Agrarinvestor]

I have put my case down in numbers Balance, for 'fair value' at PGW being 31c. If you don't like the message, I guess it is only natural to have a go at the messenger. But is 'kicking the dog' a viable long term investment strategy?

SNOOPY

You are not a messenger. It is only your personal opinion, and you have not a high stake in PGW.

Sparky's assumption of 30 millions in earnings is equivalent with the mean rating of 5 analyst:

http://www.reuters.com/finance/stock...?symbol=PGW.NZ

The P/E valuation of 13,8 for PGW is far away from the sector average rating of 27.
Therfore i think there is much more upside portential for PGW. The downside risk is limited
due to the very low Price/Book ratio of .58 versus 2.52 for the sector.

http://www.reuters.com/finance/stock...?symbol=PGW.NZ

[ak1261]

What happens to PGW these days? Is tomorrow's report implying something negative like what Snoopy predicted?

[ak1261]

Thanks Sparky for your in-depth analysis. It seems that some punters are thinking of worst scenarios for tomorrow.

[percy]

George Gould ;"Our job is to add value to our farmer clients,helping them make their farming businesses more profitable.If we do add value,there is a worthwhile margin for us,and the track record shows we are achieving success on this front."
Gould has certainly refocused the company.Debt down,strong cash flow,and paying a divie,make it an excellent result.

[ak1261]

Up more? say 3 - 4 cents. Where is Snoopy?

[Snoopy]

Up more? say 3 - 4 cents. Where is Snoopy?

Quite a lot to digest here. Earnings for the half year 1cps. Dividend 2.2cps. In the short term the share price might rise as cash in the bank will always appeal to punters. But paying out over twice your earnings in dividends is obviously not sustainable. I think what we are seeing here is the hand of Agria who are busy renegotiating their US domiciled debt as I write this.

On the face of this dividend payment Agria may be saved, but at the medium term cost of PGW going backwards.

SNOOPY

[Snoopy]

Debt down,strong cash flow,and paying a divie,make it an excellent result.

I always turn straight to the segmental analysis section of any result for PGW, and this one has thrown up a few surprises.

Agriservices has certainly gone better than I expected, with EBITDA up 15% over the comparable prior period. However within that, it looks like if you add in the apportioned corporate costs (up by 25%, ouch!) that Livestock is now loss making. Ditto real estate.

Irrigation is the big mover upwards within Agriservices as foreshadowed by Gould. Perrenial problem child Wool has also surprised on the upside. There is a modest increase in profitability in South America. Since that is where I see the main growth in PGW earnings coming, this is good. But really we will need to see the second half year results in South America before anyone gets too excited.

Outside of South America, Agritech seems to have been a bit of a disaster. It looks much worse than I expected. Sales up in seeds and grains, but profit sharply down is not a good situation. Agrifeeds being down is not so bad as this is always weather dependent.

Meanwhile back in New Zealand, large areas of the country are on the cusp of being declared in drought. Many farmers have not recovered financially from the last one in 2009/2010. I fear the outlook for the second half year for PGW is not great.

SNOOPY