PGW - PGG Wrightson

[Snoopy]

- I think it's pretty objectionable for you to accuse Balance of ramping up PGW. As if Sharetrader.co.nz was the kind of forum that would be able to propel a stocks price. You could easily accuse me of the same ramping up of PGW, though I would argue I spent some time advocating a thesis for the stock and then defending it. However, Balance doesn't strike me as the sort of person who would cash out for a pathetic 25% gain, when he/she knows if they wait patiently, then 55-60c awaits him/her.

- What if the market has woken up to the fact that this is a solid company, priced too cheaply, with some great potential, and a stronger balance sheet after the orgy of debt in 2007-2009? It might have nothing to do with Alan Lai at all. And even if it did, so what? What we really need to focus on is whether farmers are buying sheep dip and seeds in big numbers.

I hereby withdraw all inferences of ramping as regards Balance, Sparky. Compared to what you have done above, whatever Balance said has been reduced to a small inclination. 55-60c? What sort of earnings and what sort of PE are you implying with that? Even I would be in the money if it rose that far!

SNOOPY

PS I could never describe a gain of 25% as 'pathetic'.

[Xerof]

Are you inferring that Balance works on the sales desk at Forbar? No wonder things are as easy as ABC.....

[Master98]

So that should mean that ANZ, also owed $5m by today, has been repaid. The question that is still unanswered is, with negative assets and negative cashflow, how did Agria raise the money? The only obvious answer is by selling PGW shares. In due course all be be revealed I guess.

SNOOPY

at least , Agria dont need to sell down PGW holding to pay loan untill FEb. 2014, but in two years time anything could happen, good or bad, who knows.

[Snoopy]

at least , Agria dont need to sell down PGW holding to pay loan untill FEB. 2014, but in two years time anything could happen, good or bad, who knows.

By 2014 PGW should be paying dividends again, so IMO Agria should be able to pay back their outstanding $NZ10m debt (owed to ANZ and LIC) by then. It was only today's payment that had me concerned. What we know is the debt has been repaid. We don't know what strings Agria has pulled to do it.

SNOOPY

[Snoopy]

Are you inferring that Balance works on the sales desk at Forbar? No wonder things are as easy as ABC.....

You may infer what you like Xerof. I am inferring no such thing.

SNOOPY

[Snoopy]

Darren, bless his cotton sox, is wrong. Here is the top five from Forsyth Barr with notes.

PGG Wrightson (PGW) Price $0.37

PGW has made progress in improving the underlying operating performances of itscore rural services businesses. Its proprietary seed business remains in a strongposition with a competitive advantage in its significant R&D facilities. PGW remains focused on reducing its debt through the final monetisation of its loan portfolio and targeting working capital. Assuming no further drastic climatic condition issues in Australia and NZ, we believe PGW is well positioned to achieve solid earnings growth over the medium term.

OK, but look at the qualifications. Think back over the last few years and the climatic conditions that NZ and Oz farmers have faced. Assuming those weather fluctuations away does not strike me as a robust way to pick the future of PGW going forwards. Also I would suggest that implying a recommendation is unchanged when the share price has moved so much is reading more into the recommendation than was there to start with.

SNOOPY

[Snoopy]

25% is pathetic when 70% awaits you with patience. As the saying goes, "The key to making money in shares is not getting scared out of them." I did my homework, and with my various tools and calcs on my "spreadsheet of lies and distortions", accord PGW as a screaming buy when I bought in at between 32 and 34c. The target price of 55c is what I get from my intrinsic value calculation, based on current EPS of 3c a share and EPS growth for the next 5 years of around 8.5% p.a. on average.

Even at 39c, I consider it a great buy, and when they start paying a dividend in 2H13 or 1H14, I'll be even happier.

For every stock ramper on Sharetrader, there's a potential bear raider out to short a stock with negative comments. What say you, Snoopy?

I would say that five years of growth at 8.5% per year is optimistic, although not outside the bounds of what is possible. But I personally would not make an investment decision on a growth rate as optimistic as that.

SNOOPY

[Master98]

if PGW successfully landed in china, i would say pgw will be booming for a very long period.

[Balance]

All a true story Balance, but there are a few chapters of this story you have left out. Even as PGW now trades at 40c as I write this.

PGW was one of the brokers top tips at 33c, but on the latest list of recommended shares I see it has now been dropped as a recommendation. Hardly surprising when it rises by 25% in just a few days. Could your blatant ramping be an attempt to draw in the unsophisticated while you dump your own shares?

Could the reason the big seller having dried up be because Alan Lai has finished his sell down in preparation for paying of the $NZ10m Agria owes by the end of the day? What will the market reaction be when they realize Agria has sold down?

SNOOPY

Highly objectionable, Snoopy, to accuse yours sincerely here of blatant ramping to dump my shares.

FYI, I bought more at 38 cents and see plenty more upside to PGW.

I hope you are not writing from your own perspective of what you do!

So what if Alan Lai is selling down?

Fairfax had been selling down its Trade Me shares and there is no shortage of takers.

Reason? Because distressed sellers always present buying opportunities. Why do you think George Kerr's sell down of PGW at 28 cents and HNZ at 52 cents were so eagerly taken up?

[Agrarinvestor]

Highly objectionable, Snoopy, to accuse yours sincerely here of blatant ramping to dump my shares.

FYI, I bought more at 38 cents and see plenty more upside to PGW.

I hope you are not writing from your own perspective of what you do!

So what if Alan Lai is selling down?

Fairfax had been selling down its Trade Me shares and there is no shortage of takers.

Reason? Because distressed sellers always present buying opportunities. Why do you think George Kerr's sell down of PGW at 28 cents and HNZ at 52 cents were so eagerly taken up?

If AGRIA falls below 50% it can not consolidate PGWs revenue and earning. Revenue would fall from 1 Billion to 30 Million,
and they have to report a huge loss because the shareprice of PGW is far below 60 cent.
The loan problem is solved and therefore the last remaining argument against AGRIA is solved.