Tegel IPO

[crabs]

Can you explain the reasoning crabs?
the reasoning has already been explained very well by others on this thread.
However you don't have to look far past statements in the prospectus indicating that Tegal have identified area's of substantial growth and opportunity oversea's despite not being able to find any growth anywhere in the last few decades............

[RGR367]

This IPO is a classic example of how to use a very buoyant market to dress up a dog then cook it and serve it so it looks like tasty chicken.
No matter how much sauce and seasoning you put on it this investment is going to leave a fowl taste in investors mouths.

On that very perception of the Market is where we differ and right after the Dick Smith debacle?

[Joshuatree]

This IPO is a classic example of how to use a very buoyant market to dress up a dog then cook it and serve it so it looks like tasty chicken.
No matter how much sauce and seasoning you put on it this investment is going to leave a fowl taste in investors mouths.

Well I'm happy to be a s/h and see how it goes. Getting in at $1.55 was great imo;and too early too judge the quality of this company; awaiting some results first. Thanks noodles for your straight observations.

[crabs]

Well I'm happy to be a s/h and see how it goes. Getting in at $1.55 was great imo;and too early too judge the quality of this company; awaiting some results first. Thanks noodles for your straight observations.
yes I must say having the IPO set at the very bottom of a huge range($1.55-$2.55) was a bit of a surprise but does show that the market is, quite rightly, cautious of this one.........

[trader_jackson]

IPO was set at the rock bottom of the range, and yet just over 2 weeks later it looks like we'll soon be there anyway...

$1.60 and decreasing, despite NZX 50 almost reaching a record, and interest rates expected to remain low (which should make companies with a 'good' dividend yield even more attractive)

Well done to the staggers... and best of luck to the holders

[kiora]

I've heard its the chicken feed that's spreading all the weeds around the country.Not good if its true.If they stop importing feed then what?.If farmers don't want to spread chicken litter then what?:scared:

[Balance]

IPO was set at the rock bottom of the range, and yet just over 2 weeks later it looks like we'll soon be there anyway...

$1.60 and decreasing, despite NZX 50 almost reaching a record, and interest rates expected to remain low (which should make companies with a 'good' dividend yield even more attractive)

Well done to the staggers... and best of luck to the holders

Looks like one of the 'high quality' institutions selected by TGH to be a long term shareholder is selling out.

Good news for other shareholders is that there are crossings now taking place at around $1.60 and $1.61.

Whether it goes back down to $1.55 depends on how much stock the favored institution was allocated.

[janner]

[QUOTE=trader_jackson;620836

Well done to the staggers... and best of luck to the holders[/QUOTE]

Their only market really will be what they currently have.

Chickens here are around NZ$4.00 " each "... Not a kilo.

[Baa_Baa]

Looks like one of the 'high quality' institutions selected by TGH to be a long term shareholder is selling out.

Good news for other shareholders is that there are crossings now taking place at around $1.60 and $1.61.

Whether it goes back down to $1.55 depends on how much stock the favored institution was allocated.

Imagine what they would have done if the IPO was at the upper end of the scale, it'd be f'you TGH, dump the lot, line wipe those suckers! Any insto will have been allocated sufficient shares to disrupt the normal course of trading for the foreseeable ... depending on whether another insto wants it badly enough, otherwise it's the minnows they'll be feeding on for who knows how long. Rogues, they're not in it to make friends thats for sure.

[James108]

In FY15 the cost of inventories written down to net realiseable value recognised as an expose amounted to $28,000. In previous years this figure has averaged over $1M. In 2013 this figure was $4.4M, some of this was then reversed in 2014.

Approx $3.5M of provisions were also taken out in 2013, as well as the obvious PPE write downs (some of which were then reversed in 2014).

To me it looks like they made 2013 very bad and used it to fudge 2014/2015 figures.

Would be interested to here what others think about this, is Roger in this thread?

[crabs]

In FY15 the cost of inventories written down to net realiseable value recognised as an expose amounted to $28,000. In previous years this figure has averaged over $1M. In 2013 this figure was $4.4M, some of this was then reversed in 2014.

Approx $3.5M of provisions were also taken out in 2013, as well as the obvious PPE write downs (some of which were then reversed in 2014).

To me it looks like they made 2013 very bad and used it to fudge 2014/2015 figures.

Would be interested to here what others think about this, is Roger in this thread?
Unfortunately your helpful post has come to late for many but all can add it to the list that indicates the prospectus was like dressing up a stinky old ram and selling it as lamb.

[Beagle]

Well I couldn't get all clucky about this one either, too chicken seeing as private equity have a long record of plucking the value before investors get the rest of the droppings.


Low growth and word on the street, (from my farmer client who's brother is a massive player in the chicken industry) is they already reached overdose level's with hormones pumping / dressing this bird up for the float so its hard to see it soaring like an eagle from here.

Posted 4 May - Perhaps I should have been less cryptic. Ask any experienced business broker or accountant and they will tell you its common practice to dress up the financials for sale by engaging in a range of profit normalisation adjustments. It would be a very rare set of financials for a small and medium sized enterprise on the market that was identical to those sent to the IRD. I see no reason why it wouldn't be the same with a float like this. If one was going to serve up one's guests a feed to impress wouldn't one "dress up the bird" so too speak ? (Disc: Not Holding, DYOR, not to be considered professional advice).

[crabs]

Low growth and word on the street, (from my farmer client who's brother is a massive player in the chicken industry) is they already reached overdose level's with hormones pumping / dressing this bird up for the float so its hard to see it soaring like an eagle from here.
ha ha I too know people growing chicken on contract for tegal.
To back up Rodgers over dose in hormones/steroids statement.....did you know from hatching to grow a chicken to a size 8 it only takes an ave of 38 days.....eeeeeeew have you seen all the fat that is left in the pan after cooking.....for health and safety reasons please use a drip tray.
It is also interesting to note that both the pork and chicken industries in NZ had a big campaign in the 90's to stop using the words steroids and start using words like growth hormones or growth promoters or growth enhancers.

[noodles]

Posted 4 May - Perhaps I should have been less cryptic. Ask any experienced business broker or accountant and they will tell you its common practice to dress up the financials for sale by engaging in a range of profit normalisation adjustments. It would be a very rare set of financials for a small and medium sized enterprise on the market that was identical to those sent to the IRD. I see no reason why it wouldn't be the same with a float like this. If one was going to serve up one's guests a feed to impress wouldn't one "dress up the bird" so too speak ? (Disc: Not Holding, DYOR, not to be considered professional advice).

Private Equity:
Pre-IPO shareholders have only sold down 2.7% of the total number of shares on issue. If there is going to be any dressing up, it would need to be in future periods. But I doubt PWC (auditors) or public scrutiny would allow this behavior. Private Equity (Affinity still hold 45%). DSE got in trouble because private equity ran the inventory down prior to the float. Tegel have been increasing their inventory and investing in the business. There is no doubt to me that there is a strong dislike towards the stock (not just on here). But I think much of the dislike is because Private Equity is involved, but I think if you drill down a little, you can see that this is not something to be overly concerned with. I think once the concerns over Private Equity fade, investors will focus on the fundamentals and appreciate that it is a stable well managed business.

Growth:
Top-line growth over the last 10 year is 6.5%. Not very exiting, but consumer staples never are. People buy Consumer Staple stocks when they want stable reliable earnings and are not overly influenced by the economic cycle. The EBITDA growth is a lot stronger (12.7%) as they have been investing in capital to make their production more efficient. I am in the process of working out what sort of moat the business has. Will report back soon, but welcome any thoughts.

[Snow Leopard]

Given that I had to do some housework ahead of the arrival of our latest guest I thought I would pounce on a chicken instead.

Having crunched on a few bones I have a few scenarios for Tegel:

The 'optimistic' one values TGH at $1.575 now, rising to $1.718 a year ahead.

The 'realistic' one values TGH at $1.454 now, rising to $1.568 a year ahead.

I may show interest if the price gets down to the 'pessimistic' one value range.

Best Wishes
Paper Tiger

[crabs]

There are so many well thought out post shared from well research ST members on this thread that collectively paint an extremely strong picture that this IPO is a pig with lipstick on and a blue bonnet.
Thanks to all for sharing.....I came to the same conclusion after reading the prospectus.

[noodles]

Given that I had to do some housework ahead of the arrival of our latest guest I thought I would pounce on a chicken instead.

Having crunched on a few bones I have a few scenarios for Tegel:

The 'optimistic' one values TGH at $1.575 now, rising to $1.718 a year ahead.

The 'realistic' one values TGH at $1.454 now, rising to $1.568 a year ahead.

I may show interest if the price gets down to the 'pessimistic' one value range.

Best Wishes
Paper Tiger

Thanks PT.

I would note that pre-IPO EV valuations from brokers had a mid-point valuation of $1.92. Quite a variance from your valuation.

At $1.45 TGH would be trading on a pe 12 with a gross yield of 7.6%

I wonder what valuation you would apply to RBD?

[trader_jackson]

At $1.45 TGH would be trading on a pe 12 with a gross yield of 7.6%


At $1.45, it would seem Tegel would be almost close to the 'bargain basement' valuation that is Heartland's share price! ;)

(note the word almost, and that HBL probably has better growth opportunities - or at least this is my view)

It would be most disappointing to see share price drop below what was already a rock bottom IPO price so soon, aside from it being a blow to the holders, it would most likely also be 'of concern' to any companies who were to consider listing... I could be wrong, but I thought there were a few posters who seemed to believe we wouldn't really be seeing alot lower than the mid $1.70's or so?

[Rep]

ha ha I too know people growing chicken on contract for tegal.
To back up Rodgers over dose in hormones/steroids statement.....did you know from hatching to grow a chicken to a size 8 it only takes an ave of 38 days.....eeeeeeew have you seen all the fat that is left in the pan after cooking.....for health and safety reasons please use a drip tray.
It is also interesting to note that both the pork and chicken industries in NZ had a big campaign in the 90's to stop using the words steroids and start using words like growth hormones or growth promoters or growth enhancers.

I'm sorry but you don't know what you are talking about. The use of hormones to grow poultry has been banned in New Zealand for decades, I challenge you to show one single credible report that shows that local grown poultry uses them or where there is residue from hormones in the meat.

The reason those birds grow in the manner you described is due to selective breeding, the feed they given and the type of barn they are raised in.

[Snow Leopard]

Thanks PT.

I would note that pre-IPO EV valuations from brokers had a mid-point valuation of $1.92. Quite a variance from your valuation.

At $1.45 TGH would be trading on a pe 12 with a gross yield of 7.6%

I wonder what valuation you would apply to RBD?

I am not a broker trying to sell it, I am a Tiger who may at some point want to buy it.

No, at $1.45 TGH is trading on a prospective one-year forward PE of 12 etc.
For that scenario I have a value of $1.57 for a year's time.
(Since I learnt that PE ratios cloud this valuation mind - I take no interest in them)

Given RBD bought NSW recently I wonder what value I would put on RBD too :).

We will have to see how realistic the prospectus really turned out to be.
I have done my sums and I gets my numbers and I am happy with them.

Best Wishes
Paper Tiger

[smtrader]

Correct me if im wrong, but wasn't the shares oversubscribed? and everybody was scaled back heavily?? wouldnt that in itself mean that for the very first few weeks/months of trading there will still be some residual demand??

That leads me to think that with no news coming out, the only reason the shares have taken a pull back was because there was a bit of speculation to a quick buck immediately on the usual ipo pop.

I can still see significant sell orders that have been put through on the day of IPO and are still standing at around 1.70, some of which i've seen move their orders down and down..

Also i don't know what the regulatory rules around post ipo commitments by institutional investors and underwriters in NZ, but usually there's an allotment for repurchases after ipo to keep the price atleast above ipo level for a good period of time post ipo... i can't see how a PE company would overlook putting this risk management measure in place, specially with their 45% stake locked in for a while, it just makes perfect sense to do.. so taking all these points into account, i highly doubt we will see price going below 1.55.

[Rep]

I am not a broker trying to sell it, I am a Tiger who may at some point want to buy it.

No, at $1.45 TGH is trading on a prospective one-year forward PE of 12 etc.
For that scenario I have a value of $1.57 for a year's time.
(Since I learnt that PE ratios cloud this valuation mind - I take no interest in them)

Given RBD bought NSW recently I wonder what value I would put on RBD too :).

We will have to see how realistic the prospectus really turned out to be.
I have done my sums and I gets my numbers and I am happy with them.

Best Wishes
Paper Tiger

RBD bought QSR who have the largest number of KFC franchises in NSW, I note that Collins Foods just hoovered up a number of stores from some of the smaller franchisees in NSW recently. Collins owns KFCs in NT and QLD which I think they bought from Competitive Foods.

[smtrader]

I am not a broker trying to sell it, I am a Tiger who may at some point want to buy it.



Given your analysis of the future for it what use to you would it make to buy it?? ...such a buy would sound like an asymmetrical risk negatively geared.. contradictory statement to your analysis if you ask me.

[Baa_Baa]

[snip] i highly doubt we will see price going below 1.55.

Notwithstanding your optimism, which may be justified, TGH despite its apparently low-end IPO has suffered the seemingly inevitable NZX speculative overhang and sell off, subsequently exiting a few weaker hands below IPO where the SP currently sits.

I wonder whether the speculation around the IPO listing price, eventuating at the lower end and the reluctance of the market to sustain even that low price is a sign.

With little data to go on at this stage, TGH is already a down trending share, albeit a bit perky on Friday. One day doesn't make a trend though. There is enough data to suggest waiting until at least a break-up above the IPO before accumulating or buying in.

jmho, dyodd.

FWIW even a back yard farmer can put a 7-8 week eater on the plate without any special chemicals except plenty of good food and some space to run around.

[smtrader]

8055
Not just optimism.. really old sell orders that have been in place on ipo, lots of it has already gone.. it was millions and millions worth..

[Balance]

I'm sorry but you don't know what you are talking about. The use of hormones to grow poultry has been banned in New Zealand for decades, I challenge you to show one single credible report that shows that local grown poultry uses them or where there is residue from hormones in the meat.

The reason those birds grow in the manner you described is due to selective breeding, the feed they given and the type of barn they are raised in.

Best thing anyone contemplating investing in Tegel must go and talk to a few chicken breeders/suppliers to Tegel, rather than rely on the company's assertions or as we have read on this forum, misinformed and/or inaccurate information about the industry and the company.

I have talked to a couple and their views are very revealing. On balance, it leads me to believe that the positives outweigh the negatives.

Clue - they would like to expand production but have to wait in a long queue due to the contractual nature of their relationship with the two monopolistic players to the local market.

[Grunter]

the two monopolistic players to the local market.

That would be a duopoly

[Balance]

That would be a duopoly

Similar to so many other industries in NZ - beer, telecommunications, airlines, supermarkets, newspapers, TVs etc etc.

[Balance]

Crossings now at higher prices than the $1.60 and $1.61 last week.

[Snow Leopard]

... the two monopolistic players to the local market.


That would be a duopoly

Are we talking about the board game?

Best Wishes
Paper Tiger

[Balance]

Thumbs up If you can get hotels on the orange ones you will win

Are we talking about the board game?

Best Wishes
Paper Tiger

Like Indonesian bird hotels to exploit the swift birds?

[Balance]

Crossings now at higher prices than the $1.60 and $1.61 last week.

500k crossed at $1.63 - means the sp equation has now shifted from those who were getting out, to those who were buying off them and now, continues to buy.

[smtrader]

500k crossed at $1.63 - means the sp equation has now shifted from those who were getting out, to those who were buying off them and now, continues to buy.

Just wait till the sell parcels (some of which partially traded) will PURGE on between 1 june to 4 june.. thats when we will see a slight turn around.. and as off now 1.03mill at 1.63 traded

[Joshuatree]

Chicken consumption to increase 1.1% here if nz consumers consumption does not increase ;inline with pop growth but 15% in south east asia over the next 5 years

Read more » (http://sendy.tarawera.co.nz/l/QQMrKma8h6MjbHw96gBRew/0R763KRV4kZA892FBMIthn5tlg/Vd892ttN287TPx5TTEEKvJBQ)

[Rep]

Chicken consumption to increase 1.1% here if nz consumers consumption does not increase ;inline with pop growth but 15% in south east asia over the next 5 years

Read more » (http://sendy.tarawera.co.nz/l/QQMrKma8h6MjbHw96gBRew/0R763KRV4kZA892FBMIthn5tlg/Vd892ttN287TPx5TTEEKvJBQ)

Yes the consumption of chicken is expected to significantly increase as the emerging market SEA middle class demand more protein as they did and have in China.

Some observations:
- These markets have traditionally consumed fresh chicken (as opposed to frozen or even chilled chicken);
- The labour costs for processing in these markets are a lot lower than New Zealand;
- Freight, logistics, warehousing and distribution adds even more cost for a NZ based grower/processor to sell into these emerging markets;
- Yum Brands who are one of the largest purchasers in China (for their KFC operation) sourced their chicken from local suppliers (albeit with some issues eg http://fortune.com/2013/05/09/yum-brands-faces-chicken-troubles-in-china/) so why would these emerging SEA markets decide to chose a relatively high cost base imported chicken rather than setting up their own growing and processing arms?
- On the other hand, if a NZ domestic producer could differentiate itself as a high quality producer (such as where NZ sourced infant formula is perceived in China) then it could see some uplift but it presumes that the incomes in those markets will rise enough to create a market big enough.

Summary - yes folk in the SEA region will consume more chicken but why would they want it from here unless it was for the high end market?

[Balance]

Y
Summary - yes folk in the SEA region will consume more chicken but why would they want it from here unless it was for the high end market?

Same reason why folks in Asia are prepared to pay a premium for ALL food produce/products sourced from NZ.

As regards NZ poultry, no diseases like bird flu, no growth hormones and high hygiene standards give the industry in NZ its competitive edge.

[Balance]

500k crossed at $1.63 - means the sp equation has now shifted from those who were getting out, to those who were buying off them and now, continues to buy.

Crossings now taking place at $1.65 - the buyers are paying up and the sellers have retreated to higher grounds.

[smtrader]

Crossings now taking place at $1.65 - the buyers are paying up and the sellers have retreated to higher grounds.

almost 3mil traded at 1.65... havent seen that kinda number at one go since ipo

[Sideshow Bob]

http://meatexportnz.co.nz/2016/05/25/counting-those-chickens/

[Joshuatree]

Far too early to make any solid certain comment in the short history of TGL except to say we have shot above the 5 and 10DMA:mellow: and that our first chickens are 3 weeks old and already plumping up.

[Joshuatree]

I'm sorry but you don't know what you are talking about. The use of hormones to grow poultry has been banned in New Zealand for decades, I challenge you to show one single credible report that shows that local grown poultry uses them or where there is residue from hormones in the meat.

The reason those birds grow in the manner you described is due to selective breeding, the feed they given and the type of barn they are raised in.

Absoulutely right. Very sloppy misinformation crabs . Keep putting down Tegel with better information than that:glare:.

http://www.tegel.co.nz/images/healthy-living-sidebar-icon.gif
No Added Hormones





It is a widespread myth that chickens and turkeys are given hormones to make them grow faster. Tegel guarantees that there are no added hormones in any of our poultry. The Government does not permit the use of added hormones in any New Zealand grown chickens and turkeys.

[Balance]

Far too early to make any solid certain comment in the short history of TGL except to say we have shot above the 5 and 10DMA:mellow: and that our first chickens are 3 weeks old and already plumping up.

Ah but those which were 3 weeks old at the time of the IPO are now on sale and/or meals!

Interesting aside to consumption of chicken meat rising in NZ - bought some drum sticks on special at $3.99 kg at the local butcher over the weekend - cheap as.

Asked the butcher what's happening and he said Europeans buy the breast meat more and more so heaps of supply of drumsticks - great for his business as Asians like the leg meat so he sells them by the kgs when they come into his shop.

[janner]

Not going to leave many markets for NZ chicken..

https://www.rt.com/business/344605-russia-poultry-glut-export/

[smtrader]

Not going to leave many markets for NZ chicken..

https://www.rt.com/business/344605-russia-poultry-glut-export/

i cant think Russia will have wide acceptance internationally for various reasons, NZ is viewed as the producer of premium products (whether it being true or not is irrelevant, perception is everything)


question: didnt Tegel used to supply kfc? do they still do or dont? i really need to read the prospectus sometime lol

[janner]

( perception is everything)

Indeed it is.. Russia does not allow GMO foods.


question: didnt Tegel used to supply kfc? do they still do or dont? i really need to read the prospectus sometime lol

Unable to answer that.

[kura]

Interesting aside to consumption of chicken meat rising in NZ - bought some drum sticks on special at $3.99 kg at the local butcher over the weekend - cheap as.

Asked the butcher what's happening and he said Europeans buy the breast meat more and more so heaps of supply of drumsticks - great for his business as Asians like the leg meat so he sells them by the kgs when they come into his shop.

For BBQs I find thighs the best, as breast & drumsticks can become too dry.

[Balance]

i cant think Russia will have wide acceptance internationally for various reasons, NZ is viewed as of the producer of premium products (whether it being true or not is irrelevant, perception is everything)


question: didnt Tegel used to supply kfc? do they still do or dont? i really need to read the prospectus sometime lol

KFC is smart enough to use both producers. http://www.kfc.co.nz/fresh-tastes-best/

NZ poultry currently has the advantage of not having three of the major poultry diseases and non use of growth hormones - great for promoting NZ chickens/chicken products as premium products.

[Corporate]

Unable to answer that.


Yep. KFC, Pita Pit, Subway, McDonalds, Burgerfueld and Hells Pizza.

[janner]

Yep. KFC, Pita Pit, Subway, McDonalds, Burgerfueld and Hells Pizza.

Thanks.

Disc. Not a holder.

[percy]

Disc. Not a holder.

I take that as a positive.!!!!!!!!!!!!!!!!.lol.
Ukraine.??

[janner]

[QUOTE=percy;622660]I take that as a positive.!!!!!!!!!!!!!!!!.lol.QUOTE]

For whom ?? :-))

Ukraine.?? Da !!.. За 5 месяцев ..

[Joshuatree]

FWIW My broker has instigated a research note with a buy on Tegel ,tp $1.90.When i think of buying chicken i can't think of any other brand.....Ok, Ingham but Tegel is the brand that arguably most people would think of first; i put value in that.

[Balance]

FWIW My broker has instigated a research note with a buy on Tegel ,tp $1.90.When i think of buying chicken i can't think of any other brand.....Ok, Ingham but Tegel is the brand that arguably most people would think of first; i put value in that.

Crossings now taking place at $1.67 and $1.675 - the chickens are hatching?

[Joshuatree]

Read now (http://www.thebull.com.au/oempro/track_link.php?p=Q2FtcGFpZ25JRD04NDd8fHx8RW1haWxJR D0wfHx8fEF1dG9SZXNwb25kZXJJRD18fHx8U3Vic2NyaWJlckl EPTExMzEwfHx8fExpc3RJRD00fHx8fExpbmtVUkw9TDNCeVpXM XBkVzB2WVM4Mk1ESTRNaTB4T0MxemFHRnlaUzEwYVhCekxTMHR NekF0YldGNUxUSXdNVFl1YUhSdGJBJTNEJTNEfHx8fExpbmtUa XRsZT18fHx8UHJldmlldz0%3D) Recco also in the Bull

[Balance]

Read now (http://www.thebull.com.au/oempro/track_link.php?p=Q2FtcGFpZ25JRD04NDd8fHx8RW1haWxJR D0wfHx8fEF1dG9SZXNwb25kZXJJRD18fHx8U3Vic2NyaWJlckl EPTExMzEwfHx8fExpc3RJRD00fHx8fExpbmtVUkw9TDNCeVpXM XBkVzB2WVM4Mk1ESTRNaTB4T0MxemFHRnlaUzEwYVhCekxTMHR NekF0YldGNUxUSXdNVFl1YUhSdGJBJTNEJTNEfHx8fExpbmtUa XRsZT18fHx8UHJldmlldz0%3D) Recco also in the Bull

China is a huge market but Tegel is currently not in a position to supply that market with NZ's avian flu free and growth hormone free chickens and products.

Ssupect we will see some major announcements on that front after Tegel has been listed for at least a year.

[kura]

I broke my own personal rule (not to touch anything private equity floats ) last week & purchased some.

Mainly as I realised that we don't have to worry about cheap imports flooding the market (thanks to bio security type rules ) Apparently there are some nasty chicken bugs in China.
While I don't expect any spectacular growth, I see it as a stable business (more of a hold & forget type share )

[Sideshow Bob]

The Butch just advertising a 1 day special of $4.45 for a size 9 frozen chook.

That is pretty plucking cheap - can't be much chicken feed in that?

[Balance]

The Butch just advertising a 1 day special of $4.45 for a size 9 frozen chook.

That is pretty plucking cheap - can't be much chicken feed in that?

Tegel or Ingham or no brand?

Poultry farmers who are independent do get themselves into strife from time to time as the two poultry farmers will always take from their franchisee farmers first.

After 6-7 weeks, they have to process the chooks as there is little money in letting them eat the feed and maintain weight rather than grow further.

[percy]

I have added to our TGH holdings this morning at $1.68.

[Balance]

I have added to our TGH holdings this morning at $1.68.

Crossings taking place now at $1.68 - the institutional buyers are paying up and institutional sellers who drove the sp down to $1.61 last week seem to have disappeared.

[Sideshow Bob]

Tegel or Ingham or no brand?

Poultry farmers who are independent do get themselves into strife from time to time as the two poultry farmers will always take from their franchisee farmers first.

After 6-7 weeks, they have to process the chooks as there is little money in letting them eat the feed and maintain weight rather than grow further.

Whoops - Was Tegel.

[Balance]

Whoops - Was Tegel.

Profit downgrade coming?

Come to think of it, I bought a size 18 frozen Tegel chicken for $9.95 a few weeks ago from local Pak n Save - the clearance bin.

Just as I bought a leg of lamb from Affco for $7.99 kg just before Christmas from clearance bin.

[axe]

Profit downgrade coming?

Come to think of it, I bought a size 18 frozen Tegel chicken for $9.95 a few weeks ago from local Pak n Save - the clearance bin.

Just as I bought a leg of lamb from Affco for $7.99 kg just before Christmas from clearance bin.

Waikanae New World provided Sunday Dinner last week for the family - Size 18 fresh Tegel chicken - came with sage and onion stuffing - on special for $10.95

[Rep]

Profit downgrade coming?

Come to think of it, I bought a size 18 frozen Tegel chicken for $9.95 a few weeks ago from local Pak n Save - the clearance bin.

Just as I bought a leg of lamb from Affco for $7.99 kg just before Christmas from clearance bin.

Most FMCG companies have demand managers whose job is to predict the demand for products and prepare a sales and operating plan to ensure product is available in the right places and in the right quantities. If they end up with what looks to be too much product potentially on hand and a product is fairly price elastic, they will 'promo' the line to clear the product or turn it into something else that they store - in the form of frozen or 'value added' products.

On the other hand, if it looks like there are going to be shortages of fresh product, they will pull promo activity or adjust the product being assigned to frozen or value add processing and run those inventories down. It's a normal FMCG response to changes in consumer demand (much like the rag trade currently offloading all of their autumn ranges of clothing due to the late arrival of winter and being worried they will end up with stock they will have to fire sale to shift in a month or two).

Chicken is a natural product and there are some customers that will be very specific about the product they will take - with seasonal variations this may result in product out of the specific requirements having to be sold through the FMCG channel as well. It isn't necessarily easy to predict what consumers will do - even for the same month last year as for instance Easter fell in April during the school holidays last year but fell in March and outside of the school holidays this year - or if you are making ice cream with milk from the peak of the dairy season, what the demand will be like during the end of summer.

[Balance]

NBR article today - 'Tegel likely to replace STU in NZX 50'.

[Hectorplains]

http://www.nbr.co.nz/article/proten-developer-worlds-largest-chicken-meat-farm-may-beat-forecast-earnings-b-189985

...well they're certainly doing alright with earnings growth.

[Balance]

http://www.nbr.co.nz/article/proten-developer-worlds-largest-chicken-meat-farm-may-beat-forecast-earnings-b-189985

...well they're certainly doing alright with earnings growth.

Cost of feed (maize, soya bean, wheat etc etc) is down hugely with the drop in cereal prices and freight while as price of chickens have not dropped as much.

[janner]

No Comment.

China will open its market to Russian supplies of meat and poultry within the nearest months, Russia’s Agriculture Minister Aleksandr Tkachyov said on Thursday. “China is making a concession, so I think we’ve come up trumps with the Chinese veterinarians,” TASS quoted him as saying on Rossiya 24 TV channel. “Almost all restrictions have been lifted,” Tkachyov said.

[Pixelator]

Tegel into NZX50 Coates out

[percy]

Tegel into NZX50 Coates out

Great news.Just what we wanted.!

[Valuegrowth]

We like or not chicken stocks are going to be part of different types of investors’ portfolio in the coming decade.

Poultry stocks are one of the stocks to watch in the coming decade. We may see some volatility in profit in some period due to volatility in commodity prices. Still best managed poultry companies should outperform others. Growing population in Asia and Africa will create more demand for protein products. Good profit can be maintained in many balance markets.

USA chicken has edge over others in some markets after faster than recovery in their poultry industry. Currently industry experts expect supply shortages in Asia and Mexico. Even Brazil is struggling to balance the market.

In balanced markets, companies are receiving good margins especially in Asian frontier and emerging markets.

In supply side, there are some supply threats in countries such as France, Mexico, India and Thailand to name few. Supply shortages in Asia are now starting to affect global markets. China is having a 20% supply reduction of white broilers due to breeding stock trade restrictions and has made positive margins. Other markets in Asia are expected to feel the impact in 2H 2016 due to bans on shipments of genetic stock from the U.S., UK and Canada in 2015/16. Later, many countries either banned or restricted French poultry imports as well.

We can reasonably expect more exports to China and South Korea, with more pressured supply from Thailand. In addition, prices of substitute products are increasing faster than chicken and egg in Asia and as a result consumers are creating more demand for poultry products.

In short, we can expect some poultry shortage and supply shortage in some countries in 2016/17. Following link which was published in 2015 gives us some idea about some poultry shortage and has become true in some extent.

http://www.wattagnet.com/articles/22487-analysis-avian-influenza-ban-may-cause-poultry-shortage

[Balance]

http://www.wattagnet.com/articles/22487-analysis-avian-influenza-ban-may-cause-poultry-shortage

Interesting article - gel with what I have been told by one farmer who wanted to expand into poultry farming. Issue currently is sufficient production capacity to make exporting to countries like China worthwhile - something which will require a quantum leap in expanding facilities.

[Corporate]

Looking forward to the results announcement on Monday!

[Balance]

Looking forward to the results announcement on Monday!

Results is a forgone conclusion - outlook will be the critical part.

[King1212]

The chicken profit out....

https://www.anzshareandbondtrading.co.nz/dynamic/announcement.aspx?id=4173678

[DJMustard]

Good net profit increase and $0.1342 eps. What do you guys think?

[Joshuatree]

Thanks. NPAT up 13%. Export growth look v positive. Cock-a-noodle-do:)

[King1212]

sound a bit scary though...revenue $582 plus with only NPAT$11.3.......risky business to be in?? just me...

[Joshuatree]

Low margins keep competitors out and supermarkets happy.

[BlackCross]

No dividend announced? Am I right in assuming that they won't pay one until 2017?

[noodles]

sound a bit scary though...revenue $582 plus with only NPAT$11.3.......risky business to be in?? just me...
The NPAT that you reference includes one-offs like IPO costs.
The Pro forma NPAT =$37.2m

[Arbroath]

sound a bit scary though...revenue $582 plus with only NPAT$11.3.......risky business to be in?? just me...

Tegel is priced on around 50x earnings so is scary imho. Even if they paid out all earnings as a dividend (and didn't reinvest in any growth) you'd be looking at about a 3% gross yield in a business that is commodity like in many respects. Doesn't do it for me but I wish all holders well and hope Tegel's export growth plans come to fruition.

My mistake - forgot all the IPO costs. PE is more like 16x. Still think its fully priced for the industry it is in but GLTA.

[Balance]

Thanks. NPAT up 13%. Export growth look v positive. Cock-a-noodle-do:)

Trend is in right direction - outlook comments sound ok. Waiting to hear tone of conference call.

[Hectorplains]

No dividend announced? Am I right in assuming that they won't pay one until 2017?

"New Zealand's biggest chicken producer says it is "well positioned" to meet its 2017 targets, having forecast profit to more than triple to $44 million on a jump in sales to $637 million. This will allow the company to pay a dividend of between 7-11c per share." - NBR

They were never going to pay a dividend on this announcement - wasn't mentioned in IPO documents.

[BlackCross]

EPS of 13.42 cents (5.4 of https://www.nzx.com/files/attachments/237879.pdf)

[Balance]

"New Zealand's biggest chicken producer says it is "well positioned" to meet its 2017 targets, having forecast profit to more than triple to $44 million on a jump in sales to $637 million. This will allow the company to pay a dividend of between 7-11c per share." - NBR

They were never going to pay a dividend on this announcement - wasn't mentioned in IPO documents.



Concluding comment from conference call is that they are happy with the way things are tracking and they look forward on delivering the F17 forecasts.

[sb9]

Concluding comment from conference call is that they are happy with the way things are tracking and they look forward on delivering the F17 forecasts.

They were always going to say that, don't they? Looks like stock is fully priced in now...

[Balance]

They were always going to say that, don't they? Looks like stock is fully priced in now...

Very true. All a question of credibility.

If it's Seadragon or Snakk making such comments, you will have to be an absolute mug to take their word.

With TGH, too early to assess.

[DJMustard]

Hmmm.. interesting selloff today. Possible confusion around the PE ratio being 50 from non recurring expenses this year?

[RGR367]

Hmmm.. interesting selloff today. Possible confusion around the PE ratio being 50 from non recurring expenses this year?

Don't worry about it. Just gives the others an opportunity to buy some more :)

[winner69]

Hmmm.. interesting selloff today. Possible confusion around the PE ratio being 50 from non recurring expenses this year?

Not really a sell off mate - just the upsand downs of the market

often stocks go down post announcement when expectations

TGH will be close to 2 bucks by full year - they will see that it will be

so buy more

(PS - don't think many ever worried about reported high PE - its all about whats in pre IPO docs that count)

[Corporate]

Not really a sell off mate - just the upsand downs of the market

often stocks go down post announcement when expectations

TGH will be close to 2 bucks by full year - they will see that it will be

so buy more

(PS - don't think many ever worried about reported high PE - its all about whats in pre IPO docs that count)

Read the YE documents and everything looks good to me. Can't look at the NPAT this year with the additional interest and IPO costs.

[Beagle]

Harder times equals more of the cheapest protein on the dinner table I would have thought. Can't see many people buying fresh venison for dinner if you catch my drift.

[Balance]

Harder times equals more of the cheapest protein on the dinner table I would have thought. Can't see many people buying fresh venison for dinner if you catch my drift.

Yup - all the hallmarks of panic selling just to get out at IPO cost on Friday.

[Beagle]

Yup - all the hallmarks of panic selling just to get out at IPO cost on Friday.

What we need to do is push back against this Brexit B.S. and go and live it up a bit. You can buy some of the very best wild venison here. http://www.wildvenison.co.nz/where-to-buy-wild-venison.php#resellers...hope my wife is reading this :) Agree that selling at IPO price was silly. Well done to those of you who had the gonads to buy on Friday...shame I wasn't one of them.

[sb9]

Well done to those of you who had the gonads to buy on Friday...shame I wasn't one of them.

Well we've another decent buy in opportunity today if you're keen not quite same level as Friday though.

Not keen to dip my toes on this one!!! DYOR

[Beagle]

Well we've another decent buy in opportunity today if you're keen not quite same level as Friday though.

Not keen to dip my toes on this one!!! DYOR

I'm brexited out ...no appetite for additional risk whatsoever.

[noodles]

TGL is a consumer staple. The Brexit impact on TGH so far has been lower input costs. Wheat, Corn, and Soya are all off quite substantially. I hope that management are locking in lower prices for FY18. I

[trader_jackson]

Tegel continues to under perform the market, almost the same closing price as what it was on 3 May, while the nzx 50 has risen 3.4%... in other news Influential media figure Peter Bush will chair the initial public offering for poultry producer Inghams while Mick McMahon is chief executive officer. The listing timetable has been pushed back to late October, subject to market conditions, because of the looming reporting season.
(not sure if it was known that Inghams will be doing an IPO in October, across the ditch, which should provide a good company to compare with I would have thought)

[RTM]

Yes, I had hoped for some more progress with the share price as well. Guess they need to get some more runs on the board. Brian Gaynor's piece in the Herald on Saturday was also food for thought. Haven't figured out yet if it really applies to Tegal or not.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11675313

[percy]

Well I added to my IPO holding, and a trust I am involved with added six and a half times the amount it was allocated at the IPO.[Did not get many at the IPO.]
Rings all the bells for me.Well run consumer staple,growing markets for chicken,loooking to pay excellent dividends.
The brokers' research I have seen have target prices between $1.90 and $2.10.
ps.AWK,RYM,MEL,SCL and IFT were slow to get runs on the board,and they have all turned out to be big hitters.

[NZSilver]

I sold mine a few week back, I've talked to a few people re the listing who have worked at TGH - it made me a little weary. PE sounds like they really pushed things hard to cut costs and inc production before IPO. This resulted in quite a few experience people leaving and heading to competitors. I'm looking to reassess once results are released.

[percy]

I sold mine a few week back, I've talked to a few people re the listing who have worked at TGH - it made me a little weary. PE sounds like they really pushed things hard to cut costs and inc production before IPO. This resulted in quite a few experience people leaving and heading to competitors. I'm looking to reassess once results are released.

The full year result was released 21/6/2016.

[Balance]

An observation after all those years of investing in sharemarkets - too many investors think that a share price must keep on tracking higher to indicate that a company is doing well. Whenever the sp stops going higher, doubts start setting in as traders take their cue and exit, and in the absence of positive affirmations (note - nothing negative has actually happened), panic actually sets in sometimes and they start bailing out.

Can see how stocks like SCL and TIL get sold off when their share prices were threading water even as their businesses were building up momentum.

Okay for traders to keep a close eye, hour by minutes and weeks to days, but certainly not for investors. Too hard.

[trader_jackson]

An observation after all those years of investing in sharemarkets - too many investors think that a share price must keep on tracking higher to indicate that a company is doing well. Whenever the sp stops going higher, doubts start setting in as traders take their cue and exit, and in the absence of positive affirmations (note - nothing negative has actually happened), panic actually sets in sometimes and they start bailing out.

Can see how stocks like SCL and TIL get sold off when their share prices were threading water even as their businesses were building up momentum.

Okay for traders to keep a close eye, hour by minutes and weeks to days, but certainly not for investors. Too hard.

"The days are long, but the years are short" ;)

[BlackCross]

Annual Report 20168:30am, 21 Jul 2016 | ANNREPTegel Group Holdings Limited has today released its Annual Report for the year ending 24 April 2016. The Annual Report is attached and can also be accessed at www.tegel.co.nz/investors
https://www.nzx.com/files/attachments/239814.pdf

[RTM]

I caught a snippet on CNBC today with respect to "Soft Commodities" and Corn prices which are very low. That has to be good for Tegal.
Talked about chicken being highly processed corn.

He was speculating that it may be worth having a bet on Corn Prices rising.

https://ycharts.com/indicators/corn_price

All the best,
RTM

[kiwidollabill]

And the NZD devaluating?

[RTM]

And the NZD devaluating?

Yep....it goes down...and then it goes up ...and then it ....
But irrespective of that....a low corn price is advantageous to Tegal I would think.
I was staggered to read in their IPO document that nearly all their feed is imported.

RTM

[Rep]

I was staggered to read in their IPO document that nearly all their feed is imported.
RTM

Yes that is the case with Inghams NZ operation which is based in the BoP near the Port of Tauranga so whilst they need to move finished product around the country, most of their growers are near to the production plant and the port where the feed arrives. Most of the Canterbury Wheat harvest ends up being used directly for human consumption.

Keep in mind also that feed grain is an international commodity and that China is one of the largest purchasers for their domestic poultry consumption which continues to grow as incomes rise and the middle class starts demanding more protein in their diet (case in point, the massive growth in the footprint of Yum Brands KFC operation in China) - which will place demand for wheat, barley, corn, sorghum and other feed stocks in the longer term.

[kiwidollabill]

Wheat, Corn, Soybeans all at 10 year lows (have been there for the last 12 months). Risk a rebalancing may affect the P&L? Think there is mention of a 10% NZD:USD currency swing shifting the equity ~$5m

[Beagle]

Feed will need to be VERY cheap. My wife brought home a whole lot of fresh Tegal chicken thigh's yesterday she'd got at the Mad butcher on a one day special @ $3.99 kg, filled the freezer the canny Scottish blooded person she is.

I almost felt sorry for the Mad Butcher, Veritas and Tegal...they're sure not going to get rich selling those at $3.47 kg plus GST. She makes a mean chicken casserole with apricots, spices and all sorts...should be good for some very nice hot winter dinners over the next few weeks. Disc - Don't own Tegal, Veritas or any financial interest in any Mad Butcher stores either.

[percy]

Feed will need to be VERY cheap. My wife brought home a whole lot of fresh Tegal chicken thigh's yesterday she'd got at the Mad butcher on a one day special @ $3.99 kg, filled the freezer the canny Scottish blooded person she is.

I almost felt sorry for the Mad Butcher, Veritas and Tegal...they're sure not going to get rich selling those at $3.47 kg plus GST. She makes a mean chicken casserole with apricots, spices and all sorts...should be good for some very nice hot winter dinners over the next few weeks. Disc - Don't own Tegal, Veritas or any financial interest in any Mad Butcher stores either.

Enjoy the Tegel thighs.
I would not feel too sorry for Tegel.They most probably had a huge order from KFC for breasts and legs, and happy to get rid of the thighs.

[kura]

Feed will need to be VERY cheap. My wife brought home a whole lot of fresh Tegal chicken thigh's yesterday she'd got at the Mad butcher on a one day special @ $3.99 kg, filled the freezer the canny Scottish blooded person she is.

I almost felt sorry for the Mad Butcher, Veritas and Tegal...they're sure not going to get rich selling those at $3.47 kg plus GST. She makes a mean chicken casserole with apricots, spices and all sorts...should be good for some very nice hot winter dinners over the next few weeks. Disc - Don't own Tegal, Veritas or any financial interest in any Mad Butcher stores either.


I want the casserole receipe !
Disc: Own some Tegal

[Ghost Monkey]

Enjoy the Tegel thighs.
I would not feel too sorry for Tegel.They most probably had a huge order from KFC for breasts and legs, and happy to get rid of the thighs.

All the poor chickens, destined to end life as a Double Down burger...........

[percy]

All the poor chickens, destined to end life as a Double Down burger...........

Not so.
Part of them will make up Roger's wife's apricot spicy casserole..
Bit like royalty,they were breed for it...??....lol.

[kiwidollabill]

Feed will need to be VERY cheap. My wife brought home a whole lot of fresh Tegal chicken thigh's yesterday she'd got at the Mad butcher on a one day special @ $3.99 kg, filled the freezer the canny Scottish blooded person she is.

I almost felt sorry for the Mad Butcher, Veritas and Tegal...they're sure not going to get rich selling those at $3.47 kg plus GST. She makes a mean chicken casserole with apricots, spices and all sorts...should be good for some very nice hot winter dinners over the next few weeks. Disc - Don't own Tegal, Veritas or any financial interest in any Mad Butcher stores either.

They often end up with excess inventory of Free-Range drumsticks/wings etc due to consumer preferences in this sector (i.e. everyone wants breast) so will offload it at the low price just to recover some of the $ on the books.

[Baa_Baa]

Feed will need to be VERY cheap. My wife brought home a whole lot of fresh Tegal chicken thigh's yesterday she'd got at the Mad butcher on a one day special @ $3.99 kg, filled the freezer the canny Scottish blooded person she is.

I almost felt sorry for the Mad Butcher, Veritas and Tegal...they're sure not going to get rich selling those at $3.47 kg plus GST. She makes a mean chicken casserole with apricots, spices and all sorts...should be good for some very nice hot winter dinners over the next few weeks. Disc - Don't own Tegal, Veritas or any financial interest in any Mad Butcher stores either.

Keep that freezer full with the sensational special prices. These most likely the secondary cuts (in someones opinion) as the rest is exported. Even Prestons, a small local butcher chain are flogging them off $3.49 kg. The bone-in thighs are the best taste by far, any BBQ expert or slow cook aficionado will tell you that! Breasts suck :eek2: especially the skinned ones.

:) Yum.

[Balance]

Keep that freezer full with the sensational special prices. These most likely the secondary cuts (in someones opinion) as the rest is exported. Even Prestons, a small local butcher chain are flogging them off $3.49 kg. The bone-in thighs are the best taste by far, any BBQ expert or slow cook aficionado will tell you that! Breasts suck :eek2: especially the skinned ones.

:) Yum.

Haha - those of us who are not into breasts (but prefer legs and thighs) are wonderfully served by the fact that there is huge demand for chicken breasts which sells for a premium price (typically over $10.00kg) and are used for added higher value products like nuggets, ham and sausages.

Chickens unfortunately have only one breast as far as the likes of Tegel and Ingham are concerned.

Hence the regular specials these days for legs and thighs - less so wings, as KFC loves those wings which make them super profits vs normal chicken pieces.

[CatO'Tonic]

Keep that freezer full with the sensational special prices. These most likely the secondary cuts (in someones opinion) as the rest is exported. Even Prestons, a small local butcher chain are flogging them off $3.49 kg. The bone-in thighs are the best taste by far, any BBQ expert or slow cook aficionado will tell you that! Breasts suck :eek2: especially the skinned ones.

:) Yum.
I agree. There's no flavour in breasts, and the skin is the best part. As with most animals, the further down the leg you go, the stronger the flavour. Weirdly, Pakn'Save in Dunedin routinely has chicken tenderloins at well below the price of any other cut, even though they are arguably the best part of the whole thing, especially for stir fries...

[Balance]

http://tegelcareers.co.nz/Vacancies/

Always good to see plenty of jobs advertised in any company - either means the company is a lousy employer (eg. NZX under that misfit Weldon) or expanding.

[biker]

http://tegelcareers.co.nz/Vacancies/

Always good to see plenty of jobs advertised in any company - either means the company is a lousy employer (eg. NZX under that misfit Weldon) or expanding.
Expansion can involve marked increased costs in the short to medium term before profits (hopefully) increase.

[King1212]

Chicken in a halt mode....good luck holders...not me..don't have any:sleep:

[Balance]

Chicken in a halt mode....good luck holders...not me..don't have any:sleep:

Some decent volume done leading to the trading halt - was word leaking out about what was happening behind the scenes?

[Stranger_Danger]

Profit warning, ahoy!, Private equity says, thanks for coming?

Just a guess...

[JayRiggs]

I'm guessing new chicken contracts to all KFCs in South America.

[Balance]

Profit warning, ahoy!, Private equity says, thanks for coming?

Just a guess...

Cannot see a profit warning myself as the company delivered its results and outlook less than 2 months ago and if it is, would be released by now with a trading halt.

Suspect it has more to do with a corporate deal - there was word of trade buyers interested when Tegel was put up for sale last year but they weren't convinced at that time of the export story.

Could be a health scare - needs the company to respond appropriately and not panic consumers.

Time will tell.

[King1212]

I'm guessing new chicken contracts to all KFCs in South America.

:D u funny alright...

[bull....]

might be to do with lost chickens

http://www.stuff.co.nz/world/australia/83290652/chickens-fly-off-truck-land-at-kfc-captured-on-film-by-vegan

[Gizzajob I can do that]

Ive noticed they have been advertising for chicken catchers recently and suspect they have developed the three legged chicken and now just have to catch it, lol

[Balance]

Ive noticed they have been advertising for chicken catchers recently and suspect they have developed the three legged chicken and now just have to catch it, lol

That's not as valuable these days as chickens with big voluminous double breasts :D

That's where the demand and higher price are.

[biker]

Approval for raw poultry exports to Austrayya

[percy]

Approval for raw poultry exports to Austrayya

Now that should be a significant opportunity for Tegel.

[Rep]

Now that should be a significant opportunity for Tegel.

If the Australians don't have throw up a similar access saga as they did with NZ grown apples and BS around fireblight

[Stranger_Danger]

Ah well, I got that wrong..... or I'm a few months early :)

[Snow Leopard]

Tegel get Raw Deal from Australia

Best Wishes
Paper Tiger

Disc: Bored reading Full Year Announcements. :mellow:

[percy]

Significant..
The word significant used in any announce is a give away buy signal.
Used once;buy
Used twice.Strong buy.
Used three times.Must buy.
What is interesting is today's Tegel announcement uses the word significant FIVE times.!!
You may laugh at the logic,but it really works.!

[Joshuatree]

Unfortunately your helpful post has come to late for many but all can add it to the list that indicates the prospectus was like dressing up a stinky old ram and selling it as lamb. Egg on face :t_up:

[noodles]

I think the announcement is great. Tegel already supply the fast growing Aldi andCostco supermarkets. Those relationships should help them grow fresh chicken sales. I do wonder about logistics however.

Additionally, RBD has just bought a heap of NSW KFC stores. Perhaps they can leverage their existing relationship there.

[Balance]

Significant..
The word significant used in any announce is a give away buy signal.
Used once;buy
Used twice.Strong buy.
Used three times.Must buy.
What is interesting is today's Tegel announcement uses the word significant FIVE times.!!
You may laugh at the logic,but it really works.!

Oz opening up completely to Tegel (given that Ingham is already supplying in Oz and is a competitor) is the equivalent of the apple market opening up to NZ a number of years ago - very significant indeed!

We saw the benefits to the apple industry in NZ.

Heard through the grapevine that Tegel is putting in a 'significant' number of new farms in New Plymouth area - at least a dozen.

[Biscuit]

.... I do wonder about logistics however....

I guess the logistics are: grow grain in Australia; truck it to port; ship it to New Zealand; truck it to farms; turn it into chicken; truck chickens to factory; truck product to port; ship to Australia; truck to shop ... and still be competitive. The wonders of globalization and modern transport systems.

[Balance]

I guess the logistics are: grow grain in Australia; truck it to port; ship it to New Zealand; truck it to farms; turn it into chicken; truck chickens to factory; truck product to port; ship to Australia; truck to shop ... and still be competitive. The wonders of globalization and modern transport systems.

Price of wheat down 56%, barley down 36% and price of corn down 46% in the last 5 years. Huge reductions in input costs.

Also, NZ enjoys one of the highest FCR in the world - mainly die to the fact that NZ is the ONLY country free of the three major bird viruses in the world.

http://pianz.org.nz/industry-issues/poultry-farming-facts-and-fallacies

“Birds do grow faster in New Zealand, so all the world is looking and would like to match the industry here, but they can’t,” Prof. Ravindran says.

[Biscuit]

Price of wheat down 56%, barley down 36% and price of corn down 46% in the last 5 years. Huge reductions in input costs.

Also, NZ enjoys one of the highest FCR in the world - mainly die to the fact that NZ is the ONLY country free of the three major bird viruses in the world.

http://pianz.org.nz/industry-issues/poultry-farming-facts-and-fallacies

“Birds do grow faster in New Zealand, so all the world is looking and would like to match the industry here, but they can’t,” Prof. Ravindran says.

NZ has not had a major outbreak of those diseases but that doesn't mean they are not here. Avian influenza is in the wild bird population in NZ. Expand the poultry industry and it is just a matter of time... make hay while the sun shines.I did a small research project with Tegel many years ago and was very impressed with the farms I saw then.

discl: not holding

[RGR367]

Price of wheat down 56%, barley down 36% and price of corn down 46% in the last 5 years. Huge reductions in input costs.

Also, NZ enjoys one of the highest FCR in the world - mainly die to the fact that NZ is the ONLY country free of the three major bird viruses in the world.

http://pianz.org.nz/industry-issues/poultry-farming-facts-and-fallacies

“Birds do grow faster in New Zealand, so all the world is looking and would like to match the industry here, but they can’t,” Prof. Ravindran says.

Thanks Balance. Good to know about hormones on NZ chickens but it would be nicer if we can have the latest research on feed formulations as the above is almost 5 years old.

[winner69]

Nothing to do with Tegal but I find this horrifying -

Baker said it needed to be kept in perspective. There were an estimated 70,000 cases of campylobacter a year in New Zealand - one of the highest rates in the world.

"We have very high rates due to contaminated chicken," he said.


http://www.stuff.co.nz/national/health/83338316/small-number-of-people-hit-by-outbreak-may-develop-autoimmune-disease

[Balance]

Nothing to do with Tegal but I find this horrifying -

Baker said it needed to be kept in perspective. There were an estimated 70,000 cases of campylobacter a year in New Zealand - one of the highest rates in the world.

"We have very high rates due to contaminated chicken," he said.

http://www.stuff.co.nz/national/health/83338316/small-number-of-people-hit-by-outbreak-may-develop-autoimmune-disease

Have to be so careful about handling food, especially seafood and chickens and taking extra care to make sure they are not off.

I remember an ex-colleague of mine eating week old chicken pizza and ending up in hospital for 2 weeks from food poisoning.

Then there are those who ate contaminated oysters from Korea at Eden park function and ended up in hospitals.

[mshierlaw]

Have to be so careful about handling food, especially seafood and chickens and taking extra care to make sure they are not off.

I remember an ex-colleague of mine eating week old chicken pizza and ending up in hospital for 2 weeks from food poisoning.

Then there are those who ate contaminated oysters from Korea at Eden park function and ended up in hospitals.

Chicken, yes - pathogens particularly camp are present in chicken. Seafood food poisoning is normally associated with toxins & not normally a food handling issue but a farming issue.

[Joshuatree]

Supermarket raw chicken is leakproof now; wrapping standards were upgraded and enforced a while back. To think it often used to drip onto ones other food items in the trolley; errrkk:scared:
Campylobacter spp. enumerated from drips trapped in leak-proof ... (https://www.google.co.nz/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjz3Jrwgc3OAhWFoJQKHQIiDWMQFggeMAA&url=http%3A%2F%2Fwww.foodsafety.govt.nz%2Felibrary %2Findustry%2Fcampylobacter-enumerated-from-research-projects%2FFW08028_Leak-proof_packaging_of_poultry_(generic)-V_7_Final_report.pdf&usg=AFQjCNErOLgJpRVFWJq_C8AO48ZjmUKliQ&sig2=Ra6il5fnzBNxFA9NMrzFFg)

[Balance]

Thanks Balance. Good to know about hormones on NZ chickens but it would be nicer if we can have the latest research on feed formulations as the above is almost 5 years old.

Unlike hi tech industries, one assumes that things do not change too dramatically one year to the next.

http://www.takaninifeeds.co.nz/poultry/

Pretty much the same 5 years ago - what goes into chicken feed these days - wheat, maize, barley and soya meal without the anti-biotics and growth hormones so common overseas.

[Joshuatree]

A snippet from John Ryders excellent Global newsletter. Bodes well for feed prices here.

"At the beginning of June, US stocks ofcorn were 4.72 billion bushels, the highestreading since 1988. Farmers also seededthe highest ever acreage of soybeans(83.7 million acres), as well as the fourthhighest acreage for corn (94.1 millionacres).
The outlook in other large producing nations and regions, like Russia, Ukraine and the EU, is alsopositive... and is expected to take total world grain production to 2.026 billion tonnes this year, withinventories reaching the highest level ever. "

[Out to lunch]

A snippet from John Ryders excellent Global newsletter. Bodes well for feed prices here.

"At the beginning of June, US stocks ofcorn were 4.72 billion bushels, the highestreading since 1988. Farmers also seededthe highest ever acreage of soybeans(83.7 million acres), as well as the fourthhighest acreage for corn (94.1 millionacres).
The outlook in other large producing nations and regions, like Russia, Ukraine and the EU, is alsopositive... and is expected to take total world grain production to 2.026 billion tonnes this year, withinventories reaching the highest level ever. "

In FY16 accounts it doesn't look like they hedge grain either, just FX and IRS.

[Valuegrowth]

World total grains production is now expected to be an all-time high in 2016/17. In addition, with large opening inventories, overall supply will surpass 2.5bn t for the first time. Grain yields also have increased.

A snippet from John Ryders excellent Global newsletter. Bodes well for feed prices here.

"At the beginning of June, US stocks ofcorn were 4.72 billion bushels, the highestreading since 1988. Farmers also seededthe highest ever acreage of soybeans(83.7 million acres), as well as the fourthhighest acreage for corn (94.1 millionacres).
The outlook in other large producing nations and regions, like Russia, Ukraine and the EU, is alsopositive... and is expected to take total world grain production to 2.026 billion tonnes this year, withinventories reaching the highest level ever. "

[Traderwannabe]

Does anyone know why this share has drifted lower?

[Joshuatree]

Was just asking the same question.No announcements since the positive one on Aug 18th; s/p drifted down ever since.
Consensus outperform T/P $2 on 4 traders. Close to 12 days of 500,000 or more shares sold this month already. Insto selling down maybe?

[Out to lunch]

Is there something I am missing? I know that Tegel are pretty unfavourably hedged for the recent upsides in the USD and lower feed costs, but this just means less upward pressure on the price.
The clearance for Aussie raw chicken market was probably overstated when the price went up, EBITDA isnt going to move huge on this.
Maybe some people are adjusting their valuation methods? Can't be Affinity right?

[Joshuatree]

Who/whats Affinity OtL?
A friend has mentioned the coming Ingham listing .Possibility of manipulating the TGH price down for a better entry to Ingham?

[RGR367]

On NBR pay wall now. And looking like the "indicative price range for the book build, which begins today, is $1.10 to $1.20 per share".

[Out to lunch]

Under a $600m valuation now. Still curious as to why the drop.


Who/whats Affinity OtL?
A friend has mentioned the coming Ingham listing .Possibility of manipulating the TGH price down for a better entry to Ingham?

Affinity is the private equity company that took this company public earlier this year. I know the other large holders, Claris, can't sell all of their holding.


Claris, the senior managers, and the directors who purchase Shares under the Offer are subject to escrow arrangements with Tegel under which they have agreed not to sell, transfer or otherwise dispose of their existing Shares (and any Shares issued to Claris or the senior managers under the subscription agreements referred to in Section 2.13.3) until at least the first day after the date on which Tegel releases to NZX its preliminary announcement of its financial results in respect of the financial year ended 30 April 2017. Claris is able to dispose of up to 50% of its Shares prior to this date if the volume weighted average price of Shares on any 10 consecutive NZX trading days following the date on which Tegel announces its results for the half year ending 23 October 2016 is at least 20% higher than the Final Price.

[Out to lunch]

On NBR pay wall now. And looking like the "indicative price range for the book build, which begins today, is $1.10 to $1.20 per share".

I think you're talking about NZ King Salmon not Tegel. You're close though, Tegel sells salmonella.

[JeremyALD]

Hi all

Further to the above has there been any news on this share to drive the slump? It's dropped 10% or so in 2 weeks.

I have to say I'm a bit confused by Tegels share price performance. It was listed at the lower side of guidance at $1.55, beat prospectus information and has had pretty good news flowing through since the listing, yet the share price hasn't gone anywhere. It has a decent chunk of my holdings, but I'm a little concerned there doesn't seem to be a lot of interest since its listing. I notice most analysts have it at $2 within the next 12 month?

P.S. long time lurker but finally joining in the fun!

[Leftfield]

Hi all

Further to the above has there been any news on this share to drive the slump? It's dropped 10% or so in 2 weeks.

I have to say I'm a bit confused by Tegels share price performance. It was listed at the lower side of guidance at $1.55, beat prospectus information and has had pretty good news flowing through since the listing, yet the share price hasn't gone anywhere. It has a decent chunk of my holdings, but I'm a little concerned there doesn't seem to be a lot of interest since its listing. I notice most analysts have it at $2 within the next 12 month?

P.S. long time lurker but finally joining in the fun!

Welcome to ST Jeremy. I suspect there will be a question mark over this SP for some time due to quite a few factors such as;
1.) Investors may be waiting to see more info on actual financial results (runs on the board) and updated predictions v prospectus.
2.) October is generally a 'low' or 'risky' period for many shares on the NZX and with the USA elections looking very unpredictable, many potential investors may be happy to sit and watch from the sidelines at this time.
3.) IPO's are no guarantee of ever increasing SP's. Indeed the market is littered with examples where IPO expectations are not met. Early posts on this thread show some of the misgivings on this IPO, and perhaps some of these chickens are coming home to roost!
4.) Lastly much depends on your investment time frame. If your time frame is is only 6 months, then you may be disappointed. However if it is 5 yrs, then the current SP may be just a short term glitch.

I wish you well with yr investment.

(Disc - not a holder. Watching from left field )

[mshierlaw]

Hi all

Further to the above has there been any news on this share to drive the slump? It's dropped 10% or so in 2 weeks.

I have to say I'm a bit confused by Tegels share price performance. It was listed at the lower side of guidance at $1.55, beat prospectus information and has had pretty good news flowing through since the listing, yet the share price hasn't gone anywhere. It has a decent chunk of my holdings, but I'm a little concerned there doesn't seem to be a lot of interest since its listing. I notice most analysts have it at $2 within the next 12 month?

P.S. long time lurker but finally joining in the fun!

Look back to recent sucessfull IPO's they all fell initially following listing: SCL, MEL (MELCA), MCY. Punters wanting to see pedigree before fronting up.

TGH share price now back to pre AUS fresh chicken anouncement levels. I could not see how this announcement justified a trading HALT.

DISC: stalking & becoming more tempted.

[Jantar]

Hi all

Further to the above has there been any news on this share to drive the slump? It's dropped 10% or so in 2 weeks.

I have to say I'm a bit confused by Tegels share price performance. It was listed at the lower side of guidance at $1.55, beat prospectus information and has had pretty good news flowing through since the listing, yet the share price hasn't gone anywhere. It has a decent chunk of my holdings, but I'm a little concerned there doesn't seem to be a lot of interest since its listing. I notice most analysts have it at $2 within the next 12 month?

P.S. long time lurker but finally joining in the fun! Maybe it will pickup in the future. I am another just watching from the sidelines as the EPS and PE only give this share a value of around $0.65 at present. After their next annual report we may see some more encouraging numbers, so I'll hold off till then.

[JeremyALD]

Thanks everyone, really appreciate the context. Makes a lot of sense now. I perhaps got a bit too excited by the AU fresh chicken announcement, but with "significant" opportunity written everywhere in the trading halt announcement it seemed tempting as a growth prospect!

[silverblizzard888]

At the end of the day you need to consider that this company is earning very low profits, saturated with debt and even if they are able to expand into different markets they may not be getting the best margins if expenses go up. You'd want to wait to see next financials and see if there are any improvements to warrant an investment, but as it stands this stock is overvalued for the value it will deliver for shareholders.

[Hectorplains]

At the end of the day you need to consider that this company is earning very low profits, saturated with debt and even if they are able to expand into different markets they may not be getting the best margins if expenses go up. You'd want to wait to see next financials and see if there are any improvements to warrant an investment, but as it stands this stock is overvalued for the value it will deliver for shareholders.

I agree that a lot hinges on them meeting their 2017 forecasts. However, from the IPO the Group repaid $130m debt. Their net debt is $120m, at a leverage ratio of 1.6 times. That's hardly what you'd call 'saturated' levels!

[percy]

Top NZ "brand" food producer.
Strong balance sheet.
Ratios are modest,and dividend yield is attractive.
Chicken consumption is growing.
Room for export growth.
Stable earner for long term investors.
Above posted 16-4-2016
Since then there has been very little news.
The "Room for export growth" is proving right with the very positive announcement that Tegel will be able to export fresh chicken to Australia.
The Ingham float does give investors another chanal to invest in the chicken market,and may be one of the reasons for recent sp weakness.
The agm on 19th October should give an update of trading.
The reasons I brought into TGH remain intact.

[winner69]

Yes Percy, there will be a couple of announcements coming up and they will be really positive ones.

ASM 19 October - good time to say trading has trading has been strong and all that stuff and H1 will be ahead of prospectus forecasts. Come early November another announcement giving by how much more (possibly lots)

So good H1 result late November and a bullish outlook for the full year .....and share price will be 190/200 in December and Claris will be able to hock off 1/2 their shares. The other 1/2 go after full year announcement.

That's the exit plan - by hook or by crook they will make it happen

Can't lose from here ......20% plus to be made in a few months .....no worries

[percy]

Yes Percy, there will be a couple of announcements coming up and they will be really positive ones.

ASM 19 October - good time to say trading has trading has been strong and all that stuff and H1 will be ahead of prospectus forecasts. Come early November another announcement giving by how much more (possibly lots)

So good H1 result late November and a bullish outlook for the full year .....and share price will be 190/200 in December and Claris will be able to hock off 1/2 their shares. The other 1/2 go after full year announcement.

That's the exit plan - by hook or by crook they will make it happen

Can't lose from here ......20% plus to be made in a few months .....no worries

Spot on.!
Means off course we are "well positioned".
Longer term I expect to hold this "consumer staple",for the very reasons I brought into it.

[winner69]

Spot on.!
Means off course we are "well positioned".
Longer term I expect to hold this "consumer staple",for the very reasons I brought into it.

Goodness gracious me - below $1.60 now

Lowest ever close was $1.58 - so could be a record of sorts today

Maybe all the good things percy and me were saying is a load of the proverbial

[winner69]

They say that consumer staples companies like Tegel are generally good investments - solid earners and non-cyclical

Every needs to buy the necessities of life eh is the reasoning

I went off believing that with Goldman Fielder - everybody needs their daily loaf and flour is an essential ingredient in many things

Now that wasn't a great investment

[Out to lunch]

Big volume today and another blow to the stock.

[percy]

Big volume today and another blow to the stock.

Yes a very large fall on big volumes is always a concern.

[McGinty]

Got out on close today.

This was meant to be a slow and boring stock in my long term portfolio, but too big of a fall on large volume for me not to do something. No news to back up the decline = follow the money (exiting the stock in this case).

Will watch from the sidelines now.

[winner69]

Record low that 155 and previous lowest close was 158

ASX still got a more hours to go and price still falling - but on pathetic volumes

And some of us were all so bullish this morning

[JeremyALD]

Record low that 155 and previous lowest close was 158

ASX still got a more hours to go and price still falling - but on pathetic volumes

And some of us were all so bullish this morning

Probably not a bad buy to be honest. I think people are seeing the drop and are panicking given this is supposed to be a slow moving stock and its recently slumped. Everyone selling this at the moment will be making a loss on the stock so I think I'll weather the storm unless it drops below $1.40 then I'll start to get worried. I don't see any reason to be concerned reading over the annual report and guidance announcements.

[percy]

Got out on close today.

This was meant to be a slow and boring stock in my long term portfolio, but too big of a fall on large volume for me not to do something. No news to back up the decline = follow the money (exiting the stock in this case).

Will watch from the sidelines now.
Maybe the right course of action.?
I will wait a month for the agm.
I never like buying/selling without a company announcement to base my decision on.
So far the only announcement has been the very positive one about them being able to sell fresh chicken into Australia.
Currently about 5% of our portfolio.

[winner69]

Last June the price spiked down this low it was back up in the 160's in a day or two

[McGinty]

Maybe the right course of action.?
I will wait a month for the agm.
I never like buying/selling without a company announcement to base my decision on.
So far the only announcement has been the very positive one about them being able to sell fresh chicken into Australia.
Currently about 5% of our portfolio.

Time will tell if I have made the right decision, and selling at a loss is never easy but sometimes necessary to preserve capital.
Listening to the market in the past has rewarded me a lot more than it's taken, and in TGH's case if I'm wrong I can always buy back in.
Will be interesting to see if something comes out from all this downward pressure on the price, otherwise look forward to reading the AGM presentation.

[trader_jackson]

I don't mean to get all excited or go on the offensive, but while we're at it, I thought we could take a look at Dick Smith's positives (at IPO):

One of the top retailers in Australasia.
Strong balance sheet.
Ratios are modest,and dividend yield is attractive.
Retail sales are growing.
Room for off shore growth.
Stable earner for long term investors.

I realize some of the things above could be 'hotly' debated, but I think my point is made... as always DYOR.


$1.55 ... we all know why that was... people did not want to pay a cent premium for this... speaks a million word of what the market thinks of the company... could be good for punters wanting to make a quick buck as I would imagine some will simply buy in for the dividend yield, even if the share price went nowhere.




IPO was set at the rock bottom of the range, and yet just over 2 weeks later it looks like we'll soon be there anyway...

$1.60 and decreasing, despite NZX 50 almost reaching a record, and interest rates expected to remain low (which should make companies with a 'good' dividend yield even more attractive)

Well done to the staggers... and best of luck to the holders

Well... not even half a year since my posts above and TGH isn't looking to fabulous...

I would have thought TGH would be more of a 'safe haven' during times of volatility, not one of the stocks most affected by it.

If it slips below listing price (ie 1 more cent down)... things will get "extremely interesting" (will it bounce or will it crash further)

Lets hope that TGH's "unique position" allows them to deliver on their ambitious export plans... and pay an ok dividend

On another note, anyone watching the Inghams IPO? (could be good for comparative purposes)

Disclosure: not holding, and have no intention to

[Valuegrowth]

How can we measure performance of a company within the short period? We should study its performance at least for a period of five years.

On what basis we buy stocks?

On valuation
On the basis of creating long term share holder value
On the basis of creating positive cash flow for number of years
On growth
On trend etc………………………………

What type of strategy and criteria we have?

How about its business model?

For me this is a long term play and it is wise to buy on the basis of value and future outlook. More we know the company more we will benefit in the future. Currently, I have kept this under my radar. It is wise to buy any stock after doing some good research.

[JeremyALD]

Well... not even half a year since my posts above and TGH isn't looking to fabulous...

I would have thought TGH would be more of a 'safe haven' during times of volatility, not one of the stocks most affected by it.

If it slips below listing price (ie 1 more cent down)... things will get "extremely interesting" (will it bounce or will it crash further)

Lets hope that TGH's "unique position" allows them to deliver on their ambitious export plans... and pay an ok dividend

On another note, anyone watching the Inghams IPO? (could be good for comparative purposes)

Disclosure: not holding, and have no intention to

Lets not forget it was 1.78 a couple of weeks ago so it's not like things have been dire since the listing. It has consistently been above 1.60 until this week. I don't think people ever expected Tegel to take off after the listing but all things considered it seems like a sensible enough investment. Time will tell.

[Snow Leopard]

Enjoy your gloat tj.
Obviously it is not something I would ever do :p.

But, I still do not see any particular attraction to this share even at this price which I guess is getting down to the range from the valuation I did.

Best Wishes
Paper Tiger

[percy]

More fun than a Briscoes one day sale.
Over 2 mil shares traded at $1.55 already this morning.

[RGR367]

I think you're talking about NZ King Salmon not Tegel. You're close though, Tegel sells salmonella.

Yeah. Sorry about that. Cannot do the correction then as by the time I noticed it I was already slapped a 1 week ban that just ended today :ohmy: Anyway you got the vibes. Thanks too.

[RGR367]

No substantial change and/or announcement since IPO as far as I’m concerned so we’re just being given another change to buy some more at the current price of 155. I’m certainly doubling up on what I got initially. Sold out on RBD so what I got from frying is just going to killing those chicken instead :p

[JeremyALD]

More fun than a Briscoes one day sale.
Over 2 mil shares traded at $1.55 already this morning.

Are you buying anymore Percy? I'm tempted as I could average down. What's the lowest you could see this going based on fundamentals?

[winner69]

Are you buying anymore Percy? I'm tempted as I could average down. What's the lowest you could see this going based on fundamentals?

$1.55 I reckon

[percy]

Are you buying anymore Percy? I'm tempted as I could average down. What's the lowest you could see this going based on fundamentals?

No I am not buying.The wife and I both got reasonable allocations at the IPO,.I then brought more on market.taking our holdings to where I wanted,about 5%.I would consider buying more once there are more runs on the board,in a year or twos time.
I have seen two brokers research on TGH ,with target prices between $1.90 and just over $2.I think they are correct.
Averaging down is dangerous.May be safer paying a bit more once the selling pressre is over.It looks as though a fund manager is doing a quarterly book balance.Maybe they are getting a good allocation,or being an underwriter for Inghams float.
I would repeat the Tegel brand is No.1 and well repected.The chicken market is growing.The fresh chicken to Australia was a pleasant surprise,and the ratios are very modest;with a FY17 PE of 12.9 and a gross yield of 7.2%.

[percy]

$1.55 I reckon

I tend to agree.
Very surprised that it has come back to this price with no news.
That only took a minute to be proved wrong $1.54...lol.

Hello,hello,I wonder whether the seller is buying EVO..!!???????????? .lol.
Disc.I hold both.

[winner69]

I tend to agree.
Very surprised that it has come back to this price with no news.
That only took a minute to be proved wrong $1.54...lol.

Hello,hello,I wonder whether the seller is buying EVO..!!???????????? .lol.
Disc.I hold both.

We were both wrong with that 155 percy

Percy, maybe we both losing our mojo with our predictions like that?

But then again a lot of selling today and a 150 close. Wonder what sellers motivation is? Surely can't go any lower - 140 odd wouldn't look good

[percy]

We were both wrong with that 155 percy

Percy, maybe we both losing our mojo with our predictions like that?

But then again a lot of selling today and a 150 close. Wonder what sellers motivation is? Surely can't go any lower - 140 odd wouldn't look good

We should know better????
I can only guess the big seller has spooked the market.Ever one now thinks the seller knows something we do not know.?Possible,yet somehow I don't think so.But no news can make people see shadows,like the sp falling below the 100 day EMA..
Maybe a lot of truth the market overshoots,and undershoots.!
Great for traders.
A couple of days ago the agm was only a month away,now it has stretched out to be four weeks away..lol.

[RGR367]

We were both wrong with that 155 percy

Percy, maybe we both losing our mojo with our predictions like that?

But then again a lot of selling today and a 150 close. Wonder what sellers motivation is? Surely can't go any lower - 140 odd wouldn't look good

Not really. Just made that price as the sign post to get my order hit at 150. Though happy about it, I'll be really worried too if it continues to hit 140 soon.

[kiwidollabill]

Puzzled by the sp drop also.

IMO the biggest long (5-10yr) risk I see for TGH is the international grain price. It's been at the floor for the last 5years and due for a rebalance - though how near that is I'm not sure as there is still a glut in supply. Know of a few importers who have found it profitable to import grain all the way from Bulgaria.... TGH may hedge the $ (and that is the other risk with it being traded in USD) but with razor thin margins it wouldn't take a massive swing in these input cost to do some massive damage to the balance sheet.

Disc: Not a holder....

[trader_jackson]

$1.50... wow, on heavy volume to... seems as soon as it went under $1.55, it was a straight staircase down... but stepping closer to Paper Tigers valuation?

[Valuegrowth]

If we know their business very well and their business model, we should not worry about volatility in stock prices.

Are they going to have strong balance sheet in the future?

How about their market share here and abroad in the coming years?

Can they generate strong cash flow in the coming years?


Not really. Just made that price as the sign post to get my order hit at 150. Though happy about it, I'll be really worried too if it continues to hit 140 soon.

[percy]

Maybe the vendor(s) have read the announcement Proten put out not so long ago?
TGH may have been guzumped on the fresh to Australia plan. :p

Nip over to Unlisted and have a read:
http://www.unlisted.co.nz/uPublic/unlisted.mt_announcement.showannouncement?p_announ cement_id=2841
( :confused: hope that link works...)

Thanks for the link.
That announcement was 7th August when TGH's sp was $1.63. The sp then advanced to $1.78 on 19th August before it started to drop.

[percy]

If we know their business very well and their business model, we should not worry about volatility in stock prices.

Are they going to have strong balance sheet in the future?

How about their market share here and abroad in the coming years?

Can they generate strong cash flow in the coming years?



Yes,
Yes,
and Yes.

[Valuegrowth]

Yes,
Yes,
and Yes.
I have seen some worst drop in stocks. Later they rebounded strongly breaking not only 52 weeks high but also all time high. If a company has strong fundamentals it is better to ignore short term gyrations. Market will recognize later.

Factors to watch:

Lower grain price
Their market share
New markets
Future outlook

Finally, globally chicken stocks have more legs and their major uptrend is very strong. In addition,it is wise to guard our portfolio with some defensive stocks as well. In my portfolio, I have kept some defensive cash cows.

[percy]

I have seen some worst drop in stocks. Later they rebounded strongly breaking not only 52 weeks high but also all time high. If a company has strong fundamentals it is better to ignore short term gyrations. Market will recognize later.

Factors to watch:

Lower grain price
Their market share
New markets
Future outlook

Finally, globally chicken stocks have more legs and their major uptrend is very strong. In addition,it is wise to guard our portfolio with some defensive stocks as well. In my portfolio, I have kept some defensive cash cows.
Again,yes,yes,yes.
Agree with your factors to watch and general comments.

[winner69]

Hope Aleida has started - and getting ready to pump out some good news

Job really about schmoozing up to analysts / fundies though - sounds almost indecent eh


https://www.nzx.com/companies/TGH/announcements/290045

[Valuegrowth]

Thank you percy.

How about TGH today? Up by more than 0.67% on a above average volume. Similarly, there were good demand for different type of food stocks including chicken stocks globally.



Day's Range:
1.50 - 1.51


52wk Range:
1.50 - 1.80


Volume:
2,067,878


Avg Vol (3m):
689,627




Again,yes,yes,yes.
Agree with your factors to watch and general comments.

[percy]

Some days I am slow.Other days I am very slow.Today I was extremly slow.!!
Rang my broker this morning enquiring about the Ingham's IPO.He had no details yet,but thought the intos may have been driving TGH sp lower, so as to make Ingham's strike price lower. He told me to add to our TGH holding.Told him I would see what happened this afternoon.!..lol.
sp up 6 cents or 4%.So have the pass the parcel intos shot themselves in the foot?

[iceman]

Rang my broker this morning enquiring about the Ingham's IPO.He had no details yet,but thought the intos may have been driving TGH sp lower, so as to make Ingham's strike price lower.

That's basically the same as they say in an article in the NBR today.

[BlackCross]

The buildup has stoked concerns over a glut of meat, poultry and other agricultural products in the U.S. Producers are on track to send a record number of hogs and chickens to slaughter this year, and beef production is rapidly increasing. Dairy farmers are spoiling excess milk in their fields as warehouses pile up excess (http://www.wsj.com/articles/food-price-deflation-cheers-consumers-hurts-farmers-grocers-and-restaurants-1472490823) cheese (http://www.wsj.com/articles/dairy-farmers-seek-u-s-help-to-cut-into-cheese-glut-1471026524?tesla=y). Also, corn, soybean and wheat growers are preparing for a fourth consecutive year of bumper harvests (http://www.wsj.com/articles/corn-soybean-prices-fall-as-u-s-production-forecasts-top-expectations-1473698369)this fall....

http://www.wsj.com/articles/cattle-hog-prices-fall-to-multiyear-lows-on-production-concerns-1475516851

[winner69]

Back to $1.50 - that was a short burst of enthusiasm wasn't it getting to $1.60

Surely can't go any lower - they will not it will they .....but their job of getting it up to $1.90 in December sothey can start selling is getting harder and harder as sentiment sours

[kiora]

Back to $1.50 - that was a short burst of enthusiasm wasn't it getting to $1.60

Surely can't go any lower - they will not it will they .....but their job of getting it up to $1.90 in December sothey can start selling is getting harder and harder as sentiment sours

Half price chicken legs for $4.99 = half price shares?

[Lola]

Above posted 16-4-2016
Since then there has been very little news.
The "Room for export growth" is proving right with the very positive announcement that Tegel will be able to export fresh chicken to Australia.
The Ingham float does give investors another chanal to invest in the chicken market,and may be one of the reasons for recent sp weakness.
The agm on 19th October should give an update of trading.
The reasons I brought into TGH remain intact.

Well your reasons are still valid...just as those that stayed out of the IPO and the secondary market to date because this is another Aussie based Private Equity transaction are equally , if not now more so, valid.

[percy]

Well your reasons are still valid...just as those that stayed out of the IPO and the secondary market to date because this is another Aussie based Private Equity transaction are equally , if not now more so, valid.

Yes,no,yes no.maybe..!!
I may make a decision on the 19th.
Until that time I just don't know.!!

[Beagle]

Seems sentiment has really turned foul on this one and its hard to see the SP taking flight until the Inghams float is done and dusted.
Private equity tapping the market for so much in such a short space of time on both sides of the Tasman in this sector almost makes me wonder what they know about this sector that punters don't ?

[winner69]

Seems sentiment has really turned foul on this one and its hard to see the SP taking flight until the Inghams float is done and dusted.
Private equity tapping the market for so much in such a short space of time on both sides of the Tasman in this sector almost makes me wonder what they know about this sector that punters don't ?

Jeez, the 145 close wasn't even the low of the day

Maybe was overvalued at IPO time?

But I'm sure they will pull out all stops to see share price is up near 190/200 after next results announcement

[JeremyALD]

Hopefully the shareholders meeting can turn around the worrying sentiment building. What's the expected dividend percentage for Tegel?

[Beagle]

http://www.smh.com.au/business/markets/focus-on-costs-will-determine-success-of-tpgs-ingham-float-fund-managers-say-20160930-grscgg.html

Any of this sound familiar ? Tegal promotors also sold and leased back significant property before floating.

With the float not set down until November and such a large capital raise on the cards there appears to be plenty of scope for Tegal shareholders to have their feathers ruffled as a byproduct of this Ingham float process.

[winner69]

Hopefully the shareholders meeting can turn around the worrying sentiment building. What's the expected dividend percentage for Tegel?

They said over 7% at $1.55

[winner69]

Want 17 times profit for Inghams - that makes TGH cheap as

[percy]

Want 17 times profit for Inghams - that makes TGH cheap as

Agree.
Just for the record SCL was floated off by a private equity firm in July 2014 at $1.60 a share.
Interesting enough the sp did not go above IPO price until April 2015.
Maybe some IPOs just take a little time to gain traction?
I remain "well positioned."

[winner69]

Agree.
Just for the record SCL was floated off by a private equity firm in July 2014 at $1.60 a share.
Interesting enough the sp did not go above IPO price until April 2015.
Maybe some IPOs just take a little time to gain traction?
I remain "well positioned."

Interesting that the promoters are using Costa Foods as a great example of what happens with IPO

Costa their Scales and great IPO - Inghams their Tegal bound to be as well

But then those TPG guys dressed up Meyer to look like Jennifer and that wasn't the flashiest outcome (Jennifer did OK though)

Danger then is is if Inghams are failure Tegel will be tarred with same brush?

[percy]

Interesting that the promoters are using Costa Foods as a great example of what happens with IPO

Costa their Scales and great IPO - Inghams their Tegal bound to be as well

But then those TPG guys dressed up Meyer to look like Jennifer and that wasn't the flashiest outcome (Jennifer did OK though)

Danger then is is if Inghams are failure Tegel will be tarred with same brush?

Yes yes yes always a lot of noise.
Look I could have gone on and on and on about SCL.I was a SCL shareholder when South Canterbury Finance were the major shareholder.
You would have had to been mad or a Percy to have go near them after that carry on.
As for Meyer and Dick Smith I think I ,and a number of others, posted that they were a train wreck in slow motion.

[Lola]

Agree.
Just for the record SCL was floated off by a private equity firm in July 2014 at $1.60 a share.
Interesting enough the sp did not go above IPO price until April 2015.
Maybe some IPOs just take a little time to gain traction?
I remain "well positioned."

Correct but the vendors were largely NZ based . FTX, TGH were from across the ditch. Say no more. Except to say there will be more.

[janner]

Yes yes yes always a lot of noise.
Look I could have gone on and on and on about SCL.I was a SCL shareholder when South Canterbury Finance were the major shareholder.
You would have had to been mad or a Percy to have go near them after that carry on.
As for Meyer and Dick Smith I think I ,and a number of others, posted that they were a train wreck in slow motion.

I am in.. :-)))

Says nothing does it.. ?? DYOR..

[percy]

Correct but the vendors were largely NZ based . FTX, TGH were from across the ditch. Say no more. Except to say there will be more.

Now that post is a bit of a conversation stopper.!!!..
I guess your next post will start;"But wait there's more."
I don't look forward to it.!!...lol.

[Beagle]

Want 17 times profit for Inghams - that makes TGH cheap as

Lets see what PE these private equity guys really get.

The other thing about forecasts, companies build credibility over time as you know, over many years in fact. Just because the promotors issue a forecast, (huge vested interest anyone ?), doesn't mean its credible.
I for one treat private equity vendor issued forecasts with extreme caution.

I'm interested in Tegal at the right price in due course...but I am cautious and would prefer to see if they can lay a golden egg or two and actually meet next year's forecast first.

[Master98]

One question,from ASB security site NTA is -25cents,i think the private equity firm in order to push down IPO price to $1.55 they have to increase debt leve,seems quite tricky.

[winner69]

One question,from ASB security site NTA is -25cents,i think the private equity firm in order to push down IPO price to $1.55 they have to increase debt leve,seems quite tricky.

Outfits like Tegel have heaps of intangibles - quite often the value of the 'brand' per se

I dont think they have a need to increase debt (in the foreseeable future)

[mshierlaw]

Still stalking, still interested.

8351

[trader_jackson]

"Inghams Group's initial public offering price range has been set at 13.5-times to 15.5-times forecast profit, sources told Street Talk"

"The company is preparing to come to market with $98.8 million in proforma net profit after tax in the 2017 financial year, up 18.9 per cent on last year. That IPO price range values Inghams' equity at up to $1.53 billion."

Read more: http://www.afr.com/street-talk/inghams-group-priced-at-135times-to-155-times-forecast-profit-20161011-grzw9c#ixzz4MkwW2ubT

I think Tegel was listed at 15.0? (rock bottom of their range)

If Ingham was listed, like Tegel, at rock bottom of the indicative range, would a ratio of 13.5 implying Tegel to be priced at just under $1.40?
If I have done my math/thinking right (may not have!) Tegel could be still trading at a "reasonable" premium, despite falling under listing price.

Disclosure: Getting more attractive now that we're under $1.50, but still not sure so am not holding.

[Beagle]

Interesting article on NBR behind the paywall about the chicken glut in N.Z. at present. Makes me wonder if its really any different to any other form of commodity / agri stock. I use a standard PE ratio of 10 for agri stocks and that's held me in good stead over time. I suppose one could attribute a slightly higher PE because of population growth and maybe a continued shift toward more white meat over more expensive red meat.

Maybe a PE of 12 - 13 is reasonable...but who can say reliably what the E will be !

[BlackCross]

Why chicken is about to get pricey

Chicken prices are expected to rise.By Christopher Adams

Enjoy cheap chicken prices while they last.
That's the message consumers can take from a sharebroker's report that says a glut in New Zealand's favourite meat will shortly come to an end.
Average prices for fresh chicken pieces were 9 per cent lower in August than in March, according to the First NZ Capital research.
And whole frozen chickens were.........read on....

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11727574

[winner69]

Why chicken is about to get pricey

Chicken prices are expected to rise.By Christopher Adams

Enjoy cheap chicken prices while they last.
That's the message consumers can take from a sharebroker's report that says a glut in New Zealand's favourite meat will shortly come to an end.
Average prices for fresh chicken pieces were 9 per cent lower in August than in March, according to the First NZ Capital research.
And whole frozen chickens were.........read on....

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11727574


Lot of words before you get to the important part -


The shares recently traded at $1.47.

"In our view this represents a buying opportunity," said First NZ, which has a target price of $2.10 on the stock.

Jeez - potential 40% gain with hardly any risk

They will make sure its over $2.00 by the New Year

[Master98]

Jeez - potential 40% gain with hardly any risk

They will make sure its over $2.00 by the New Year
Jeez-historically the numbers you put across a few stocks hardly get right.BE CAUTION!!

[percy]

Lot of words before you get to the important part -


The shares recently traded at $1.47.

"In our view this represents a buying opportunity," said First NZ, which has a target price of $2.10 on the stock.

Jeez - potential 40% gain with hardly any risk

They will make sure its over $2.00 by the New Year

Maybe closer to 50% should you include a dividend.

[winner69]

Jeez-historically the numbers you put across a few stocks hardly get right.BE CAUTION!!

I won't get offended but no need to shout (caps)

Prices often get close to where I reckon ..... Can't win them all eh

Vested interest - maybe too excited sometimes, probably from knowing and being swayed by too many guru analysts

At least I am not too outrageous this time around - First NZ Capital and percy seem to be more bullish ....maybe caution is needed

[h2so4]

One of the metrics I like about Tegal is the consistent low wage and salaries cost when expressed as a percentage of revenue.
2016 23% and only varied one or two % over the last 5 years except for 2012 28%

[Master98]

I won't get offended but no need to shout (caps)

Prices often get close to where I reckon ..... Can't win them all eh

Vested interest - maybe too excited sometimes, probably from knowing and being swayed by too many guru analysts

At least I am not too outrageous this time around - First NZ Capital and percy seem to be more bullish ....maybe caution is needed
No intention to offend you, just kind of sense of humor, generally sp running below ipo longer and deeper will be more diffcult to recover, thats why be caution.

[winner69]

No intention to offend you, just kind of sense of humor, generally sp running below ipo longer and deeper will be more diffcult to recover, thats why be caution.

OK, just misunderstood

Claris / Affinity must be getting a bit worried - long it stays under IPO price not a good look

From an old article "The private equity firm will be allowed to sell up to 50 percent of its remaining stake before then if Tegel's shares spend 10 straight trading days at least 20 percent higher than the offer price, once the first-half results are posted."

Whatever that means but they will be desperate to get the share price up to $1.86 by hook or my crook. Plenty of good news story coming up I reckon

[Master98]

OK, just misunderstood

Affinity must be getting a bit worried - long it stays under IPO price not a good look

From an old article "The private equity firm will be allowed to sell up to 50 percent of its remaining stake before then if Tegel's shares spend 10 straight trading days at least 20 percent higher than the offer price, once the first-half results are posted."

Whatever that means but they will be desperate to get the share price up to $1.86 by hook or my crook. Plenty of good news story coming up I reckon
Good luck to you, do watcing but not yet convinced me dip my toe in until Inghams ipo price be setted.

[JeremyALD]

Given the sudden drop and fall from grace it's started to hold up pretty well so I think it will start to creep up again. The Shareholders meeting next week should answer a lot of questions and I could see it regaining some steam then. In saying that I can't see this going much past $1.60 until the Inghams float is over.

[BlackCross]

Lot of words before you get to the important part -

The shares recently traded at $1.47.

"In our view this represents a buying opportunity," said First NZ, which has a target price of $2.10 on the stock.

Jeez - potential 40% gain with hardly any risk

They will make sure its over $2.00 by the New Year

Isn't there an option for those that floated the company to be able to sell a shed load of shares once the price reaches around the $1.80 mark?

[777]

Isn't there an option for those that floated the company to be able to sell a shed load of shares once the price reaches around the $1.80 mark?


Covered in winners post #488

[winner69]

From the IPO docs

Claris, the senior managers, and the directors who purchase Shares under the Offer are subject to escrow arrangements with Tegel under which they have agreed not to sell, transfer or otherwise dispose of their existing Shares (and any Shares issued to Claris or the senior managers under the subscription agreements referred to in Section 2.13.3) until at least the first day after the date on which Tegel releases to NZX its preliminary announcement of its financial results in respect of the financial year ended 30 April 2017.Claris is able to dispose of up to 50% of its Shares prior to this date if the volume weighted average price of Shares on any 10 consecutive NZX trading days following the date on which Tegel announces its results for the half year ending 23 October 2016 is at least 20% higher than the Final Price.

[Ace]

Why chicken is about to get pricey

Chicken prices are expected to rise.By Christopher Adams

Enjoy cheap chicken prices while they last.
That's the message consumers can take from a sharebroker's report that says a glut in New Zealand's favourite meat will shortly come to an end.
Average prices for fresh chicken pieces were 9 per cent lower in August than in March, according to the First NZ Capital research.
And whole frozen chickens were.........read on....

http://m.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11727574


I just read an article in stuff which had a different headline, came across it on facebook.

Chicken the cheapest it has been since 2007

Chicken prices have fallen to their lowest level in nearly a decade.
A kilogram of chicken breasts fell to $13.52 in September, having peaked at $16.60 in late 2014.
Statistics New Zealand said last month's fall in chicken prices meant they had dropped for each of the last 16 months, and were now at their lowest level since October, 2007.
Poultry Industry Association executive director Michael Brooks said the general drop in chicken prices was the result of expansion in the local industry, as the chicken you buy in New Zealand was locally produced.
"With supply decisions being made one to two years ahead, temporary periods of under- or over-supply can occur and affect prices accordingly," Brooks said.

Don't really keep tabs on TGL here's the link for the article, it's from stuff lol http://www.stuff.co.nz/business/85287860/chicken-the-cheapest-it-has-been-since-2007

[BlackCross]

"Covered in winners post #488"

Sorry I bothered.

[trader_jackson]

So when Tegel went through the whole IPO thingy, did the PE firm that listed it disclose that there had been years of oversupply in the market (leading to weak prices that will recover... in theory [hopefully?]) or was this just brushed under the mat while we focus on the ever increasing export opportunities Tegel has to offer?

(I have probably missed something so please excuse my ignorance if this is the case)

[winner69]

So when Tegel went through the whole IPO thingy, did the PE firm that listed it disclose that there had been years of oversupply in the market (leading to weak prices that will recover... in theory [hopefully?]) or was this just brushed under the mat while we focus on the ever increasing export opportunities Tegel has to offer?

(I have probably missed something so please excuse my ignorance if this is the case)

Mentioned a few times

Said Fy16 growth would be 'partly offset by the mix effect of increased volumes on major contracts and a supply / demand imbalance on certain products in the domestic channel during FY2016F which is forecast to rebalance in FY2017F"

So all above board and honky dory - punters were told

You should read their book - quite educational even if you not interested in buying Tegel shares today

[Sideshow Bob]

http://www.stuff.co.nz/business/85294875/chicken-factory-versus-trampoline-centre-in-court-battle-after-odour-complaints

[percy]

Well I hope the agm tucka is a bit more exciting than the speeches.
"On track to achieve their PFI forecast for the full FY17,and will update the market on the first half of those results in mid December."
Well looks as though the divie is still on track to be paid in January.

[JayRiggs]

I went to the AGM today.
The tucka certainly did not disappoint! A wide variety of chickens on offering.
There were: various nuggets, golden crumbed tenders, panko & quinoa crumbed tenders, chicken fries, lime and chilli chicken kebabs with an assortment of sauces.
It was all very greasy and I think they ran out of napkins, because I couldn't find any to wipe my filthy hands.

Will post more about the meeting later today.

[JeremyALD]

Would love to hear your thoughts on ghe meeting Percy!

[Beagle]

http://www.sharechat.co.nz/article/df6ef380/tegel-shareholders-express-concern-at-escrow-shares-and-weaker-share-price.html

Hard to soar like an eagle when its so heavily weighed down with escrow shares for Africa...

[JayRiggs]

My observations from the Tegel AGM.

They were about to play a video about Tegel's story in the middle of CEO Phil Hand's presentation, but the tech guys couldn't get the video going - there was no sound. After about a 1 minute silence, someone in the back got impatient, muttered he was deaf and told Phil Hand to move on.
Phil Hand was shaking his head at the tech guys in disappointment and moved on with the meeting.

Questions asked by shareholders.
A question about Ighams IPO and how this is affecting the Tegel share price, it's been heading down. And what are you going to do about Ighams and other competition?
James Odgen: Tegel has been dealing with competition for many years and will continue to do so. We aren't in a position to comment on Ighams IPO, Ighams are just doing their own thing. The NZX has gone down by about 7.9% since early September, so it isn't just Tegel share price going down.

The guy replies, but Tegel shares have fallen by about 20%, more than the NZX!
James Odgen: No, Tegel hasn't gone down by that much.
James then tells the shareholder to see one of the Tegel guys for a broker report to assure him of Tegel's worth.
Then they moved on.

A lady asked about chicken feet.
Before her question, she said she paid $1.68 for her shares and was happy with paying a higher price (presumably because she's happy with the company).

What happened to the Tegel chicken feet?
Phil Hand: We are still selling chicken feet. It is a valuable revenue stream.

Will you be exporting chicken feet to Hong Kong?
Phil Hand: Yes that is on the plan.

The lady then goes on to say, don't add condiments to the chicken feet, because chinese people prefer plainer chicken feet.
And if you want the right chicken feet to sell to chinese, check the chicken feet in Hong Kong yumchar, make sure they aren't too big or too small.
James Odgen: I'll get you to meet with a products exec after morning tea to discuss this.
Drew a few laughs in the room.

A shareholder expressed concern about the Affinity excrow of shares, how Affinity will be allowed to sell when it goes over WVAP $1.86 for 10 consecutive trading days after the half year result. And if this sell off will affect the Tegel share price.
James Odgen clarifies the shares escrow period. Afinity own 45.8% and are happy with the company. They won't neccessarily sell their shares when it goes over $1.86.

Another shareholder questioned why Kang Tok Yew and Brett Sutton, why do they not personally hold shares in Tegel?
Kang Tok Yew explains because himself and Brett are fund managers in Affinity and there is a rule in place that doesn't allow them to personally hold shares in Tegel to prevent conflict of interest with shareholders. Otherwise, they would own Tegel shares.

After question/answer time, the tech guys got the video going. Phil Hand comments that the AV guys are doing a great job. A hint of sarcasm? Good that the tech guys sorted it in the end anyway, saved a bit of embarassment of their earlier blunder.
It was a nice video. Gave a good overview of the Tegel story with pretty pictures of their products. 95% brand awareness in NZ and 35% of shoppers will go for Tegel products before their competitor's. All their birds are not caged, free to roam about in the shed or free range outside in the paddock. No birds are injected with hormones too.