Buying shares in the Wellard cattle exporting group last week was one of the worst decisions the Punter has made for quite some time.
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He bought them after the company (ASX code WLD) had downgraded its net profit after tax for this financial year to between $23.5m and $30m.
You might think that three weeks out from the end of the financial year, a profit forecast would be reasonably reliable.
On Thursday last week, a mere six days after that forecast, the company had to have another think and announced that the profit would now be “around the bottom” of that range.
Even allowing for the fact that one large shipment can make a significant difference to the profit, two downgrades in a week is a woeful performance.
It sounds as though they will be lucky to make even $23m for the year – barely half the $46.6m forecast in the prospectus in December.
And the latest scandal over the treatment of Australian cattle in a foreign abattoir will not help. The Punter has dumped his shares.
Admitted it was a bad week on the world’s stock markets, allegedly because of the likelihood of the UK leaving the European Union, Trump becoming president of the US, or a Coalition loss or a hung Parliament on July 2.
The Punter thinks further sharp falls are more likely than not.
He has decided therefore to lock in his profit on Avenira (AEV) and has also sold his Anova Metals (AWV). Anova is a potential gold miner, but in Nevada, not Australia, so it does not have the currency advantage of Australian miners.
Political pressure has ruled out any form of underground coal gasification in Australia, or at least in Queensland, which is why Carbon Energy (CNX) has seen its shares trading for less than one cent.
On Friday, however, Beijing finally gave the official nod to its joint venture with JinHong Investment Co, which will put $30m towards commercialising Carbon Energy’s technology in China.
The Punter on Friday bought 100,000 more CNX shares at 1.2c each, partly to bring his holding up to a level where it can be more easily sold.
At the time of writing shares in Tasmanian Foods (TFL) were due to resume trading on Monday, having competed its takeovers of Shima Wasabi and Nichols Poultry.
Shima Wasabi provides fresh wasabi to Australia’s leading restaurants and also produces freeze dried wasabi powder for export.
• 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.
