PGW - PGG Wrightson

[duncan macgregor]

$2? Macdunk would have sold you his for $1.60 only 18 months ago! And of course because Macdunk made a loss on that trade (despite profiting on his several PGW trades before that), he will never invest in PGW again - even though PGW has been one of the top two or three best perfrorming shares on the NZX since! My own average entry price to PGW is $1.33, and I have always added to my increasing holding when the share price is going down. Of course my average holding time is something like six years, so I haven't made quick money. And as an extra 'punishment' over those six years I have been forced to bank 47.5cps in dividends. Such are the 'trials' of the long term investor!

Those warrants are 'in the money' already! PGW shares traded up to $2.75 late this morni

SNOOPY

discl: A (very small) WRI shareholder since 1995, who has substantially increased my position in what is now PGW (particularly in the last four years).

Your past disclosures are coming back to bite you on the bum SNOOPY. Macdunk will do an analysis of PGW when dairy farms start back into profit again which wont happen in the short trerm.
PGW will be one share that will go much lower before that happens which may see me join you in about twelve months. Macdunk

[Dr_Who]

Madunk, you maybe able to pick up the shares for 1 cents a a years time.

[Snoopy]

Your past disclosures are coming back to bite you on the bum SNOOPY. Macdunk will do an analysis of PGW when dairy farms start back into profit again which wont happen in the short term.
PGW will be one share that will go much lower before that happens which may see me join you in about twelve months. Macdunk

As of last month about 1/3 of PGWs customers are dairy farmers. If rival RDI's interest free loans take off, that could see a number of Dairy Farm customers from other Ag business suppliers move across. In a years time the number of PGW customers who are dairy farmers could become irrelevant.

Just to update, I haven't bought a serious number of PGW shares since February 2007. But I have acquired more through the dividend reinvestment scheme since that time. That means my average holding price is now $1.29. Cash dividends that I have pulled out of the company in the last 14 years amount to around $1.10 per share. That means even at the very bottom of this latest farm trough, I am stilll ahead.

So why if I believe in the direction of this company am I not stocking up on PGW shares while the price is low? Well I don't have an unlimited pile of capital. And in my judgement there are surer bets out there. Notice I said 'surer bets', not 'better bets'. If PGW 'comes right' it is likely to be my biggest winner. But if it doesn't, well I will just have to go to the bottom of the cliff and support a hypothetical PGW cash issue in the future.

You may yet prove me wrong about PGW Macdunk. But that is a gamble I am prepared to take.

SNOOPY

discl: hold PGW

[duncan macgregor]

SNOOPY, Unlike you I dont gamble. Unlike you I only buy on an uptrend. Unlike you I take the small loss and get out in a downtrend. Farm service companies are the simplest to understand they follow farm gate prices up and down very similar to mining companies and metal ore prices. I fully expect the big downtrend in the PGW sp to continue which was very forseeable along with NZS which was always a high risk project. Dairy farming will make a come back when it does it will be reflected first of all in farm gate prices followed by a big spend up down at the farm service store. Macdunk

[Dr_Who]

The rural sector will pick up, it is cyclical. The problem with PGW is the huge debt they have and the bank covenants. It also doesnt help that the people that have been supporting PGW have all run out of money and they may have to raise cash soon or go belly up. PGW reminds me of NPX and FPA.

[elZorro]

I have to agree with the last two posts: if you tried at the moment to move new goods not normally stocked in the PGW (and other rural) stores nationwide, you'd be out of luck.

They're all getting their stock levels down, clamped by head office. Stores pull customer orders from other branches when they can, not the supplier. Fast-moving stock lines are still OK. Farmers seem to be generally clamped down by their banks. They have all their capital tied up, and could be more efficient, but will have to wait until farm gate prices improve.

-elZorro-

[The BOWMAN]

When everyone is jumping out beating on a share, you know it is time to buy. Just like NPX and FPA.

[elZorro]

Perhaps that's right Bowman, but this share at least, is one where you can do your homework quite easily. Have a look inside one of the stores and see if it's busy. Look at the books and figure out the profit margin for the average sale (it's low).

-elZorro-

[Balance]

When everyone is jumping out beating on a share, you know it is time to buy. Just like NPX and FPA.

Agreed. Wait for the capital raising.

[duncan macgregor]

The time to buy any share is when demand of the product starts to increase against availability. Farmers demand for the products being sold is at an all time low. This in time will change making PGW amongst others if still around over sold as far as buying position in the market. Dont waste time working out companies in a downtrending sector its almost as stupid holding shares in them. The time to do your home work is when the sector turns as it surely will in its own good time.
PGW jumpted in at the peak of the market taking on huge burdens of debt which might be its undoing but then being an oversold position might make it a really good prospect all being well. My own view is it will survive with the share price downtrending in the short term then be one of the success stories in the long term.
Right now only a fool would be bottom picking this share can go lower than you might think. Macdunk