The price of shares in Select Harvests (ASX code SHV) has had the Punter humming to himself like bees in almond blossom, but recently it has not been a happy hum.
More like the hum of a honey bee worried about pesticides. The slide in the share price has become steeper over the past month. The Punter sold 500 of his shares two weeks ago at $6.85, but when the price hit $5.70 last week, he wished he had sold them all.
The Bell Potter broking firm probably aren't humming happily either. Back in April/May, with SHV around the $6.00 - $6.50 mark, they upped their valuation of Select to a target price of $8.05. Nobody's perfect in this punting business.
In the long run, they could be right. The Punter hopes so. He hopes the slide is explained by the confirmation by the US Department of Agriculture that the US almond harvest is likely to be up by 7.9 per cent, which is higher than May estimates. California supplies about 80pc of the world's almonds, so the US harvest tends to set world prices for the nuts.
Australia's harvest is also up, but no one seems to be suggesting we are running into a price-withering surplus. On the positive side, from the Aussie point of view, the nut size and yield per tree in many places in California is down. Quantity is not necessarily quality. The Chinese are big almond importers, mostly from the US, so Trump's trade war may do no harm at all to Australia's export prospects.
SHV shares still look expensive, even at $5.70. Dividends are expected to total only a fifth of the 2015 payout, and yield less than 2pc. The shares sell for a whopping 120 times 2017 earnings. So the market is assuming forecasts of rising profits and dividends are correct.
Preliminary results are due to be released on August 27, but the Punter has decided to buy back the 500 shares he sold earlier. He has paid $5.72 a share. Hmmm.
• 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.