Going to seed again with cucumber growth

Going to seed again

Business
Cucumber growers have hailed Abundant Seeds' stock as better than imported equivalents and that has swung Punter the company's way.

Cucumber growers have hailed Abundant Seeds' stock as better than imported equivalents and that has swung Punter the company's way.

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Cucumber growers have hailed Abundant Seeds' stock as better than imported equivalents and that has swung Punter the company's way.

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The Punter has clearly been too greedy and too pessimistic in his bid to buy back into seeds-and-face cream company Abundant Seeds (ASX code ABT).

For the last three months he has had an order on the market for 10,000 shares at 12c each but they have never been lower than 17c.  He wanted to get them at a real bargain price or not at all. Silly boy should just have bought them at the time for 18c.

The more rational approach is to look at the figures, and they are starting to look encouraging.  Abundant itself is just a little seedling – seed sales in the year ended in June were only $46,000, it has only been on the stock market since April 2016 and three days out of four there are no trades in the shares at all. Sales of skin care products were $233,000.  Government subsidy in the form of the R&D tax incentive rebate was $631,00, which was more than the company's total sales revenue. 

The company's loss for the year doubled to $2 million or 4c a share, but it is still pretty much a start-up. What has really drawn the Punter back into the company is the feedback from domestic cucumber growers, cited at the recent AGM, who reported that their trials of ABT seeds produced plants which tolerated both summer high and winter low temperatures better than rival (imported) seeds.  

Another plus is that EcoMag, which supplies magnesium for ABT's skin care products, has been happy to pay $1m for 5m new ABT shares at 18c. The Punter has bought 8,000 ABT for $1,981, or an average cost of 24.8c each.

Meanwhile Carbon Energy, which had great plans to become a green energy company by producing hydrogen in the Cooper Basin in South Australia, has gone into voluntary administration. A share purchase plan to raise just $1.5m was a complete fizzer.  The Punter has held them for six years.  

  •  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. 
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