Select Harvests (ASX code SHV) is expected to confirm tomorrow (Friday) that first half after-tax profits were $2.01 million, nicely up on the $1.27m in the corresponding period. But that is history. The current six months is looking distinctly soggy. In its latest crop and market update, the almond group says the current harvest conditions "are the worst the industry has seen in the last 10 years".
Earlier this month, the company warned that wet weather had hampered the harvest, which was unlikely to be finished before mid-June. Since then the rain has continued, making it difficult to access the orchards and increasing the amount of mechanical drying required. The quality of some of the crop will be impacted, but quality generally is around the same as last year.
Advertisement
SHV shares initially dropped 5 per cent on the news, but with a couple of hours, bargain hunters pushed the price back up to pre-announcement levels. They are already well down on their 12-month high of $8.98 but above the low point of $4.98.
The Punter has an outstanding (and possibly overly pessimistic) order for SHV shares at $4.90. Given the state of the market, he is not prepared to amend that order yet. Even at $4.90 SHV shares would yield only around 2pc in dividend income.
Shares in the Wide Open Agriculture (WOA), the "dirty clean food" company, have continued to ease, and were last seen at 55c. The quarterly update at the end of last month was strongly positive. It has reported 11 consecutive quarters of revenue growth, despite the pandemic, so adding to his WOA stake remains high on the Punter's list for possible purchase. He is holding out, hoping to pick them up for under 50c. His current holding of 7000 WOA cost him an average of $1 each, but he'd rather not talk about that.
- 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.
