PGW - PGG Wrightson

[Balance]

Balance,
Not so quiet. I have not done much fundamental analysis on this one. What I do know is:
a) a few farmers who are starting to spend more;
b) that the chinese company buying into PGW have made good investments before and are unlikely to buy a lemon (which this is not);
c) that their gearing (Debt to Debt+Equity) has improved;
d) that pre-reporting the bears ruled;
e) that it is now the bears who have gone quiet as the sp begins to rise (3.4% today and I estimate another 5% next week);
f) PGC shareholders seem to also like the report (their sp has also risen today indicating that the heavy selling may be over, even before they report)
g) technically, the sp has found good support at 58 and has bounced off nicely twice.

and there's more...but I got other work to do.
Happy trading.

Thanks, Bobcat!

That is an excellent summation of your view - stock seems to be going the right way.

Let's wait for Dr Who to come back with his fundamentals comparison.

[Balance]

Still waiting for Dr Who to enlighten us with his 'multiples'.

Will be an interesting switch if ELD is indeed so much cheaper than PGW.

[Dr_Who]

PGW 2010 PER 23
ELD 2010 PER 10

I am sure a man like yourself with all the contacts can do your own numbers. Lets have a look at your numbers and your holdings disclosure.

Short term price movement does not represent long term fundamental value for a company. This is very true with the recent IPO of KMD and MYR where prices was pushed up for the first day of listing to make it look good.

[flyingfox]

Oh dear. Did the Chinese pay too much for PGW?

Chinese rarely pay too much for things they want to buy

[Balance]

PGW 2010 PER 23
ELD 2010 PER 10

I am sure a man like yourself with all the contacts can do your own numbers. Lets have a look at your numbers and your holdings disclosure.

Short term price movement does not represent long term fundamental value for a company. This is very true with the recent IPO of KMD and MYR where prices was pushed up for the first day of listing to make it look good.

No need to be defensive or insulting, Dr Who. It was a genuine inquiry to get some figures to look at. You made the assertion that ELD is very cheap compared to PGW.

Here's my take on the situation from publicly available information :

PGW is forecasting $24.1m so is currently trading on a forecast PER of 19 for 2010.

ELD is forecasting $54m so ELD trading on PER of 11.3 for 2010 but note that it is not taxed - so comparative PER is actually 16.2.

Note also that ELD's forecasts are dependent upon some asset sales. You might want to check on the progress of the asset sales - it's running $60m behind schedule. In fact, ELD has had to write down the value of Hi-Fert by 80%.

So knock $4m profit off ELD's forecasts - PER is now 17.5X.

The real upside to both stocks are going to be in 2011 when the benefits of the recapitalization and restructuring kick in.

I am happy to stick with PGW. Bobcat summed up the reasons why PGW looks good - solid balance sheet, solid industry position and restructuring behind the company.

Plus Agria could move at any time to increase its shareholding - Bobcat & I will consider our options at that time.

[macduffy]

Are there any views on the effect that the appointment of Sir John Anderson as chairman might have on PGW's fortunes?

In my experience of the man he is a very capable chairman and administrator, with a tendency to be somewhat autocratic and domineering. May be what PGW needs at this time?

Disc: Not holding at present.

[percy]

I think Sir John,s appointment as positive.Craigs have PGW as a buy. FY10 Fy 11 Fy 12
PE 18.5 10.30 9.24
EPS growth -68% 80.80% 10.9%
Craigs expect PGW to pay a divie in FY 11.
ELD and PGW both look to me to be well focused companies with strong brands ,who have fixed their balance sheets and I would expect both to perform well.

[COLIN]

Are there any views on the effect that the appointment of Sir John Anderson as chairman might have on PGW's fortunes?

In my experience of the man he is a very capable chairman and administrator, with a tendency to be somewhat autocratic and domineering. May be what PGW needs at this time?

Disc: Not holding at present.

He will have shrewdly assessed the situation before committing to take over. Inspires more confidence than Norgate, I must say.

[Balance]

He will have shrewdly assessed the situation before committing to take over. Inspires more confidence than Norgate, I must say.

Indeed. All the hard work on raising capital and restructuring is done - Sir John is taking over with perfect timing.

He can claim full credit when the share price goes back to $2.00 again.

[macduffy]

Indeed. All the hard work on raising capital and restructuring is done - Sir John is taking over with perfect timing.

He can claim full credit when the share price goes back to $2.00 again.

There still a lot of hard work, and good fortune needed to get the SP back to $2.00 from current levels.

If that happens, JA will be entitled to a big chunk of the credit, IMO.