Seeka

[noodles]

No I am not a holder because it is too illiquid to build up a reasonable holding that you can confidently dispose of the way it is currently trading - that and I am not an expert in the kiwifruit industry, and cannot justify the time investment that knowledge would require given the illiquidity. If I was a holder though I wouldn't be a seller at current prices (because I would have done my homework before buying, and I have a feeling this is a goodie). Have done a bit of work on this one now and will probably do more if I see it drop significantly and I feel there is a lot of upside - may be a buyer then.

While DRPs can be and often are associated with weak cashflows they do not need to be. Just look at the financials - business has been generating strong FFO and CFO with minimal CAPEX over the past few years. CAPEX forecasts in the annuals/presentation are not onerous. Peak FFO was a lot higher than where we are right now, so a lot of potential for non capital intensive cyclical growth as things normalise. CFO bought stock on market recently.

In case you are a beginner I want to caveat all this with I am not an expert in the kiwifruit industry and I might be totally wrong on where things are in the cycle (maybe they are permanently impaired - anybody here have a view on that?) - I haven't done the work to be confident. always DYOR and don't listen to anybody on a forum.

Thank you for you input. It is rare to get such quality input on this forum.

I was talking to a kiwifruit "insider" yesterday. Your thoughts around CAPEX align with his. He is a top 20 holder in Seeka.

[percy]

JWI has a range of corporate governance issues along with secularly declining sales.

SEK's PE might look high but part of that is because depreciation overstates maintenance CAPEX and the stock is selling below book. SEK is generating strong cashflows and is in a cyclical upswing, as per management forecasts of a long term increase in disease-resistant high-margin golden kiwifruit volumes over the next few years. Given where equity market valuations are at it's real cheap, but there isn't a lot of liquidity so you need to be careful.

Hi Aucklandunistudent,
Welcome to Sharetrader.
I look forward to reading your posts.

[Joshuatree]

Bummer re fire destroying post harvest shed last night

Packhouse Fire - 5 March 2015

[noodles]

Bummer re fire destroying post harvest shed last night

Packhouse Fire - 5 March 2015

No one injured. Should not affect earnings. More of a distraction at this stage.

The earnings announcement last week beat guidance by about 8%.

Underlying earnings ( excluding one-offs and assuming full year of Glassfields) comes in at 27.5cps. This puts SEK on a pe=11.8 at the current price of 3.25.

But the real story here is the massive growth of G3 gold coming on line in the next 2 years. SEK have already announced volumes for 2015 are going to increase from 21.3m trays to 24-25m trays. There should be a further uplift in 2016. I suspect the FY15 profit growth will strong. However, guidance is probably 6 months away.

[BIRMANBOY]

Its a shame about its lack of liquidity. Actually has been a very good dividend earner for me and I'm surprised there hasn't been more interest in it. An example of a good business quietly going about its business, making money, not taking any risks, managing its exposure by a diversification program and effectively weathering a bad time in an admirable fashion. I can see this gradually gaining some followers and in years ahead should continue its positive momentum.

[noodles]

Its a shame about its lack of liquidity. Actually has been a very good dividend earner for me and I'm surprised there hasn't been more interest in it. An example of a good business quietly going about its business, making money, not taking any risks, managing its exposure by a diversification program and effectively weathering a bad time in an admirable fashion. I can see this gradually gaining some followers and in years ahead should continue its positive momentum.

You know Kiwifruit is back in vogue when Orchards are being syndicated
http://myfarm.co.nz/opportunities/kiwifruit

Just more evidence that volumes are on the rise. Given SEK make most of it's money though post-harvest, volume is more important than the commodity price of the kiwifruit. It should be noted that Seeka do do some orcharding of their own.

[percy]

Its a shame about its lack of liquidity. Actually has been a very good dividend earner for me and I'm surprised there hasn't been more interest in it. An example of a good business quietly going about its business, making money, not taking any risks, managing its exposure by a diversification program and effectively weathering a bad time in an admirable fashion. I can see this gradually gaining some followers and in years ahead should continue its positive momentum.

Totally agree with you .!!!!

[noodles]

A good article by Alan Williams
https://agrihq.co.nz/article/seeka-continues-to-improve-its-profit?p=321


Take outs for me:
"Seeka packed 21.34m trays and was budgeting for 30m trays by 2018, with the bulk of the increase being in Gold fruit."
"And a fire at its Te Puke packhouse and coolstore complex would not hamper this season’s output."
"Seeka was interested in acquisitions and the balance sheet gave it “financial freedom of action”, Franks said."

[Joshuatree]

Gales and heavy rain forecast for tauranga, tepuke area monday from PAM.Eastern ranges of BOP high chance of severe southeast gales and rain. Northern Hawkesbay and Gisborne on hitlist too. Central and South hawesbay are in for it too. Just hope its downgraded.

[noodles]

It appears there are some tail winds in the kiwifruit industry
https://nz.finance.yahoo.com/news/ki...050442586.html

Even made tv3 news
http://www.3news.co.nz/nznews/new-ki...try-2015032816

Seeka will be packing a lot more kiwifruit this year. Should translate to $$$