The ever pessimistic Punter thinks this is probably a good time to sell things. The value of his portfolio has been sliding over the past few weeks, and he ought to stem the rot.
But he can’t think what to sell, so this week he has just gone and bought what appear to be rather expensive seeds.
He has been watching Abundant Produce (ASX code ABT) since it soared into the ASX in Auntumn.
When the company finally started trading on the ASX on April 26, the shares opened at 45 cents each, more than double the issue price of 20c.
ABT have now been bouncing around between 80c and 90c for about ten weeks, so The Punter has given up waiting for them to get any cheaper.
He has bought 2,000 ABT at 88c partly because he likes tomatoes.
Selling seeds of ABT’s new hybrid tomato could be the company’s next big thing, following its success with cucumber trials in the Middle East.
The Punter has bought 2,000 Abundant Produce shares at 88c partly because he likes tomatoes
The company says testing of the new love apples has been “progressing promisingly” and points out that more tomatoes are consumed throughout the world than any other vegetable.
The world vegetable seed market is worth around $A8.5 billion, and growing by an estimated 12.8 per cent a year. It is dominated by a handful of big players, such as Monsanto and Du Pont, but they tend to focus on the large-scale, commercial greenhouse industry.
Abundant, in partnership with the University of Sydney, breeds vegetable seeds aimed at low-tech growers, who are often struggling with challenging temperatures or low rainfall.
Shares selling for nearly a dollar do not normally show up on The Punter’s radar – they tend to reflect profitable enterprises, rather than speculative opportunities.
Abundant qualifies, however, as being a newcomer which has yet to make any serious sales. Receipts from customers in the three months to the end of June were a mere $3,000.
It is burning $230,000 a quarter, but it had $2.5 million in the bank at the end of June and was still to receive at least $350,000 from the government in research and development tax refunds.
Meanwhile, shares in the prawn farming Sea Farms Group (SFG) have been suspended pending a capital raising.
The news comes as quite a surprise, given that Sea Farms raised $10 million as recently as June.
Such an announcement would normally knock the price, but at the time of writing SFG shares were expected to resume at around the current price of 10.5c, probably on Tuesday this week.
• The Punter has no financial qualifications and no links to the financial services industry. He owns shares in a number of companies featured in this column.