Punter ups investment in chicken and beef

Punter ups investment in chicken and beef

Business
TasFoods' main business is poultry and dairy, both trading on Tassie's clean green image, with a small but growing wasabi operation.

TasFoods' main business is poultry and dairy, both trading on Tassie's clean green image, with a small but growing wasabi operation.

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Punter has placed a cautious order for 10,000 TFL at 12c each, a couple of cents below the current market price.

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TasFoods (ASX code TFL) has made no money for the Punter since he bought the shares nearly two years ago. He is down about 30 per cent, which is not quite what he was hoping for.

The company's bottom line is still a hefty loss, of nearly $1.4m. It's a long way from paying a dividend, and the shares are simply not on the radar for most investors.

At the time of writing there have been only three trades in TFL in the past week, totalling a mere $1410 worth of shares. A hot stock it ain't.

Nevertheless the annual results released at the end of February were encouraging.

Sales were up 25 per cent and gross profit up 54 per cent. In the second half of the year the business even had a positive cash flow.

The net loss after tax was at least a big improvement on the $6.8m loss the previous year.

The company has been investing in expanding its existing operations, particularly in the production and processing of poultry, which accounts for some 84 per cent of total sales.

Strong sales growth is expected to continue in the current year and the company is actively seeking acquisitions.

So the Punter has placed a cautious order for 10,000 TFL at 12c each, a couple of cents below the current market price.

If the order is filled, it will cut the average price of his TFL holding to 15.2c.

Meanwhile, the Punter regrets not having a fencing business in north Queensland.

AACo (AAC) reckons repairing the damage caused by the recent floods will cost between $6 and $8m.

They are still counting the scattered survivors, but there is a chance that fewer cattle may have been lost than earlier feared.

Moreover, the company says it can still meet its supply obligations and its premium branded beef will not be affected.

On that basis, the Punter has placed an order for 2000 AAC at 8989c each.

That order is unlikely to be filled unless the stock market as a whole takes a dip.

  • 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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