PGW - PGG Wrightson

[sb9]

Would this point to possible turnaround in the Dairy sector that the nation is looking for, if so very good news for farmers looking ahead.

[Beagle]

Hopefully Roger, you will be able to repeat this when percy's ( and mine to be truthful ). " STAR " company reports..

Please accept that I do not wish to offend but with the greatest of respect I would appreciate it if you would please not change my posts and re-quote them. I acknowledge I have done this once or twice in times gone by but the mods have said this is frowned on and I understand why so I don't ever do this now.

Dairy was 23% of PGW's business as per the last annual report, HBL's direct exposure to dairy is about 8% of their loan book but I suspect with all affiliated industries impacted by dairy their effective exposure is considerably more. In the context of PGW's business being so heavily exposed to dairy I think their latest guidance is stunning and I am not surprised First N.Z. have upgraded their target price by 30% as this years indicated result speaks volumes about PGW's ability to perform in the future.

My mate Seeweed with his large holding will be having a very good day

[RTM]

"Re markets running out of gas."
Do keep in mind that those Aucklanders are still busy selling houses and moving out. The ones who are retiring will look around for somewhere to earn a dollar. And they will need to keep looking to the stock market in the current environment. Unless they want to eat their capital gain. Which some will do.
Yes....I am one of those, but did take the plunge a few years earlier.

[nextbigthing]

http://www.sharechat.co.nz/article/6...-approval.html

Best analysts in the business upgrade target price from 50 cps to 65 cps. Trading cum a final divvy this good huntaway puppy has the legs to run !

P.S. I wonder if a 1 cps special divvy is on the cards this year to go with the 2 cps final ?

Too right Roger. These were rated a buy with a target of 48c PRIOR to this upgrade. First analyst has upgraded his buy recommendation to 65c. Currently trading at 51c. Just saying.

Edit; Now 52c.

[winner69]

Would this point to possible turnaround in the Dairy sector that the nation is looking for, if so very good news for farmers looking ahead.

The general economy is really strong at the moment - GDP close to 4% this year

You would expect PGW to benefit from this, even if dairy is a bit weak

And Wheeler being sucked in the bank economists / commentators and will be adding heaps more fuel to the fire over the next few months with more OCR cuts.

So the boom will continue - no wonder FNZC are bullish

[Beagle]

The general economy is really strong at the moment - GDP close to 4% this year

You would expect PGW to benefit from this, even if dairy is a bit weak

And Wheeler being sucked in the bank economists / commentators and will be adding heaps more fuel to the fire over the next few months with more OCR cuts.

So the boom will continue - no wonder FNZC are bullish

Totally agree that all yield stocks will benefit from RBNZ cutting interest rates. Any stock that can deliver sustainable strong dividend yield will look increasingly attractive in an environment of the lowest interest rates most of us have ever seen. Gross yield at 52 cps on 4 cents fully imputed is still 10.7% ! Even at 56 cents is still just on 10%. I think FCNZ are right, PGW are due for a major re-rating, only some of which has already occurred. It wouldn't surprise me to see First's target price of 65 cps achieved within 12 months.

Thanks for sharing Fox. FWIW and just my personal opinion as a former client, I no longer "rate" Forbar's analysts.

[Fox]

Thanks for sharing Fox. FWIW and just my personal opinion as a former client, I no longer "rate" Forbar's analysts.

No worries. I always take a grain of salt when assessing their judgements and figures, but their overview of the business environment can prove useful if you missed anything.

[Snow Leopard]

I had PGW marked down as 'cheap as' (as in value greater than $0.50; price less than $0.40) back in mid-June just before I put my pack on my back and went bush for a month.

Fortunately I put some money where my analysis was and can claim to be:
a: happy about the current state of affairs;
b: wondering whether this is going to achieve 3rd spot in my portfolio of NZX stocks, edging out EBO.

One of the things about PGW annual results over the last few years is that they have been all over the place and there has been a great disconnect between 'Operating EBITDA' and NPAT due to a variety of factors in the accounts, some of which become clear when you look into it and some of which don't.

So I am not in the bit surprised that NPAT is expected to be up 20% YoY, after all it was down 20%ish YoY last year.

So the question is: Is this announcement that has over-excited a few people representative of 'the new normal' and a good basis of upping your valuation by 30% or should one perhaps wait for the details?

But for what it is worth the current Tiger valuation is $0.557 now, $0.585 in a year.

Best Wishes
Paper Tiger

[Beagle]

Effectively trades cum a (probably) 2 cent final divvy so using my sometimes creative investment psychology people buying now at the start of the FY17 year at 52 cents are effectively only really paying 50 cents for all FY17 onwards earnings, (they have only held for 5 minutes so to speak if they buy now so treating the 16 final divvy as a partial reimbursement of acquisition price makes sense to me analysing this stock as a medium term investment coming in now). On that basis I think the stock appears to be very good value even after today's strong rise but as PT suggests, it will be good to review the result in more detail on Tuesday morning next week. Wonder if the resident paper tiger could become more bullish if he took lessons for these guys http://www.trademe.co.nz/travel-even...1131152850.htm

[Beagle]

Closed today on a five year high @ 54 cps ahead of the annual result tomorrow. Interesting times ahead, looking forward to the running the ruler over the announcement tomorrow morning.