Scales - SCL

[Beagle]

https://www.nzx.com/files/attachments/259943.pdf

Sold out and not inclined to reinvest anytime soon after reading Trading Update :

1. Crop size similar to last 2 years - so yield per acreage has dropped as acquisition of Longview increased orchards planted by 8%.

2. Packout for exports expected to be lower than the 81% (exceptional) in 2016 - average is 75%. So potential for volume of exports to drop by 7.6%.

3. Pricing in line with expectations - word is that Chile has been flooding the market with apples so prices for some varieties (eg. Royal Gala) are down on last year. Not sure how exposed Mr Apple is to royal gala market.

So am expecting full year results NOT to surprise on the upside this year and an agricultural stock trading on a PER of around 13X to me is not compelling when earnings are likely to decrease.

As usual, DYOR.

Great post mate. I sold out about a year ago from memory at around $3.30. Very good well managed company that continues to trade at about 110% of fair value, is my assessment of things.

[Balance]

Great post mate. I sold out about a year ago from memory at around $3.30. Very good well managed company that continues to trade at about 110% of fair value, is my assessment of things.

Market will always pay for quality - so 10% of fair value is not unreasonable.

[Sideshow Bob]

http://viewer.zmags.com/publication/11542123#/11542123/14

Article further to meeting

[TheHunter]

https://www.nzx.com/companies/SCL/announcements/304863, more positive vertical integration :t_up:

[Joshuatree]

Yep food production and marketing in a great cycle atm.SCL adding value throughout the chain from seed to mouth.

[macduffy]

No mention of how the acquisirion was financed - but presumably not through a material issue of shares?

[Joshuatree]

Good to see them branching out from Apples and Avos too

"OceanAir specialises in sea and air freight for perishable produce, specifically Kiwifruit and Avocadoexports, which account for about 50% of its activity. "

[janner]

No mention of how the acquisirion was financed - but presumably not through a material issue of shares?

283405 @ $3.423 Part payment

[TheHunter]

No mention of how the acquisirion was financed - but presumably not through a material issue of shares?

No, this would be required to be announced to the market.

[janner]

NZX.com.. It is on there ..

[TheHunter]

NZX.com.. It is on there ..

Then yes***,teaches me for assuming one has already looked!:laugh::laugh:

[janner]

My only concern with this addition to a very good company, is that this new addition has as it's main business.
Export of Avo' and Kiwi fruit.. Seasonal...
Which I know does not mean that all apples etc. go out in a few weeks.. Just a thought..

All will be revealed in due time. :-)))

Disc. Hold and happy.

[macduffy]

NZX.com.. It is on there ..

Thanks, janner. I hadn't looked beyond the acquisition announcement and the "remains confidential" bit. So we're left wondering just how "partial" was the equity part of the consideration?

[Sideshow Bob]

Would be looking to work in/merge with Balance Logistics based in Chch, so then have more coverage through AKL and Oz for airfreight etc.

A lot of airfreight out of NZ has some seasonal basis to it, Balance also do a lot of stone fruit.

[Golfer01]

Would be looking to work in/merge with Balance Logistics based in Chch, so then have more coverage through AKL and Oz for airfreight etc.

A lot of airfreight out of NZ has some seasonal basis to it, Balance also do a lot of stone fruit.

Spot on Sideshow Bob. Ocean Air is a logistics provider/intl forwarder. Although some exposure to seasonal commodities through harvest volumes they have no exposure to commodity prices. Providing logistics and related documentation services for their customer base (import & export). I see the acquisition to compliment Scales Logistics and Balance Cargo with a greater presence in the North Island to better handle their existing business and increase their customer base.

[winner69]

Turners and Growers had a bad 1/2 year and said this -

Pipfruit
In the Pipfruit division, weather events impacted on the timing of harvests and the volume and quality of fruit harvested from the New Zealand orchards. Inclement weather also affected third party growing partners in New Zealand and internationally, leading to an overall decrease in the volume of fruit available.

Does this imply anything at all for Scales?

Scales did say things were going OK at the ASM so must still be going to plan?

I have no idea so just asking

[macduffy]

Turners and Growers had a bad 1/2 year and said this -

Pipfruit
In the Pipfruit division, weather events impacted on the timing of harvests and the volume and quality of fruit harvested from the New Zealand orchards. Inclement weather also affected third party growing partners in New Zealand and internationally, leading to an overall decrease in the volume of fruit available.

Does this imply anything at all for Scales?

Scales did say things were going OK at the ASM so must still be going to plan?

I have no idea so just asking

Hard to say, but one would think that there must be an impact to some extent. The absence of any SCL update implies that it's not material but T&G's comment is a reminder about the potential hazards of land-based investing.

Disc: A small holding in an over-diversified portfolio.

[Lewylewylewy]

Love this company, but don't understand the price given the weather we've been having (I was hoping for a drop so I can enter again). Now there's a report come out about food (fruit) prices dropping, specifically avo's (something like 1/3 price drop from my skim read).

Maybe the buy in opportunity will come after their next report?

[janner]

Love this company, but don't understand the price given the weather we've been having (I was hoping for a drop so I can enter again). Now there's a report come out about food (fruit) prices dropping, specifically avo's (something like 1/3 price drop from my skim read).

Maybe the buy in opportunity will come after their next report?

To the best of my knowledge SCL do not grow Avo's.. A lower price will mean greater opportunities for the export/freight divisions..

[percy]

To the best of my knowledge SCL do not grow Avo's.. A lower price will mean greater opportunities for the export/freight divisions..

Seeka are big in Avocados.

[janner]

Seeka are big in Avocados.

Don't hold Seeka :-))))

Put them in touch with SCL Export/Freight ..

[ShouldHaveHeld]

oh man, what is going on here!? sellers drying up :O

[bull....]

oh man, what is going on here!? sellers drying up :O

its been going sideways for nearly 2 yrs so maybe its breaking out? if you look at a chart here you can see -

big charts

[janner]

Beg to differ...Aug 17 2015 $1.99 Aug 16 2017 $3.61 Hardly a side ways movement..

One year yes..

Disc. Small Holding

[bull....]

Beg to differ...Aug 17 2015 $1.99 Aug 16 2017 $3.61 Hardly a side ways movement..

One year yes..

Disc. Small Holding

okay it not 2 yr more like 1.5yr (my nearly 2 was a bit exaggerated ) april 2.16 to now it has gone sideways and under performed the index.
Over the last week it looks like it is breaking out of the 1.5 yr range but it still is under performing the index so one could argue it has more upside just to equal the index performance last 1.5 yr.

[janner]

okay it not 2 yr more like 1.5yr (my nearly 2 was a bit exaggerated ) april 2.16 to now it has gone sideways and under performed the index.
Over the last week it looks like it is breaking out of the 1.5 yr range but it still is under performing the index so one could argue it has more upside just to equal the index performance last 1.5 yr.

Nearly .. 1.5 years.. :-)))

However.. Will agree that it is lagging.. 11/08/17 A strong Bullish Engulfing Pattern.

Disc. Small holding.

[Balance]

https://www.nzx.com/companies/SCL/announcements/306020

First significant fall in profit in a while.

Best is over for SCL for now?

[Well Endowed]

I think any company with cyclical weather dependent harvests is going to struggle to post linear year after year gains. I still think the future prospects still look pretty good.

[percy]

I think any company with cyclical weather dependent harvests is going to struggle to post linear year after year gains. I still think the future prospects still look pretty good.

Agree.
Makes the current PE of 13.36 look high.a

[Balance]

Agree.
Makes the current PE of 13.36 look high.a

The big unsaid is what has been happening with apple supply from places like Chile - this was a huge issue in the past and is becoming a big issue again.

[bull....]

https://www.nzx.com/companies/SCL/announcements/306020

First significant fall in profit in a while.

Best is over for SCL for now?

was telegraphed in june so no surprise

[Ace]

was telegraphed in june so no surprise

Exactly, this was all quite expected, a pretty hefty fall - although profit guidance reaffirmed and within targets, nothing out of the ordinary.


The big unsaid is what has been happening with apple supply from places like Chile - this was a huge issue in the past and is becoming a big issue again.
I think it's not so much the demand of the apples, which may be the case with Chile that have fallen - moreso the production, packout rates, and 'unforeseen' weather circumstances increasing costs and decreasing efficiency. Can't really help the weather, I do hope however that having multiple 'cyclones' thundering through our apple producing regions doesn't become the norm.

[bull....]

hefty fall alright for something well telegraphed , must be to do with the technicals lol

anyway reason i liked it from the start were growth which could be made in logistics and storage also now appealing is the china market opportunity for which they will need to buy more apple supply

[winner69]

hefty fall alright for something well telegraphed , must be to do with the technicals lol

anyway reason i liked it from the start were growth which could be made in logistics and storage also now appealing is the china market opportunity for which they will need to buy more apple supply

Not really a hefty fall ...just a tad of record(?) highs

Reaffirming guidance means H2 is going to be at least as good or heaps better than last year .....when H1 was down 14%

Seems to be trend these days with many companies saying H2 is going to be great ...and not delivering on it

At least Scales have already made most of the years profit

[Beagle]

Agree.
Makes the current PE of 13.36 look high.a

http://www.4-traders.com/SCALES-CORP-LTD-21021561/financials/

Analysts have it valued at $3.78 but I am with you, this is too rich for my blood.
Forecast eps for FY18 is 25.5 cps. I would ascribe a PE of no more than 10 to any agricultural cyclical stock but other parts of their business like pet food, liquid storage, coolstore e.t.c. get's me to about 12 - 12.5 overall. I continue to see fair value around $3.20 and believe this got ahead of itself.

[bull....]

http://www.4-traders.com/SCALES-CORP-LTD-21021561/financials/

Analysts have it valued at $3.78 but I am with you, this is too rich for my blood.
Forecast eps for FY18 is 25.5 cps. I would ascribe a PE of no more than 10 to any agricultural cyclical stock but other parts of their business like pet food, liquid storage, coolstore e.t.c. get's me to about 12 - 12.5 overall. I continue to see fair value around $3.20 and believe this got ahead of itself.

i brought some more today looks cheap down the track with more bolt ons

[winner69]

Share price 340 a year ago and 340 today so probably priced about right (averaged about 340 the who year as well)

One day (sometime) it'll get to 400

[bull....]

http://www.4-traders.com/SCALES-CORP-LTD-21021561/financials/

Analysts have it valued at $3.78 but I am with you, this is too rich for my blood.
Forecast eps for FY18 is 25.5 cps. I would ascribe a PE of no more than 10 to any agricultural cyclical stock but other parts of their business like pet food, liquid storage, coolstore e.t.c. get's me to about 12 - 12.5 overall. I continue to see fair value around $3.20 and believe this got ahead of itself.

I find produce companies in nz are priced relativly low when compared to aus companies one of my favourites being costa grp au trades on a 28 pe so with companies in nz trading on like 8 - 12 odd i find them cheap in comparison with much bigger yields

[stoploss]

I think we have a lesson on the PE story with TIL & BWX ......

[bull....]

looks like buyers a getting a bargain well telegraphed profit affected by possibly one of events next yr could be better maybe

[bull....]

i brought some more today looks cheap down the track with more bolt ons

further to my point if investors listen to there investor call

http://scalescorporation.co.nz/wp-content/uploads/2017/08/Scales-Corporation-Limited-Interim-Results-Call-456630-240817.mp3

you will here in Q&A they are looking at opportunities right now possibly in ag that may be a new product? makes sense as it would further diversify the business. In comparison to other produce companies scales lacks this feature as many others have multi ag products in there portfolio.

there china aspirations will need way more volume if they are serious , consumers in china are growing in there purchase of fruit each yr but looks like prices are low but anyway they would need more orchards to get the volume and scale to keep there costs down to make this a good market so they need to buy more hopefully in different parts of the country to spread geo risk.

Also they say petfood market looks good for them to enter eg canned petfood a potential 500m local market? to take a slice from and not taking account of exports later on

http://www.mbie.govt.nz/info-services/sectors-industries/food-beverage/documents-image-library/Investment%20opportunities%20in%20the%20Petfood%20 industry%20-PDF%201.6%20MB.pdf

Logistics purchase recently of ocean air - avos, kiwifruit dont they need a bigger presence in tauranga then the heart of this production in nz or maybe they are going to purchase avo orchards ?


Anyway I think some people are being short sighted by not thinking as this as a growth stock

[Well Endowed]

Agree entirely bull. thanks for the info.

[Biscuit]

Also they say petfood market looks good for them to enter eg canned petfood a potential 500m local market? to take a slice from and not taking account of exports later on

http://www.mbie.govt.nz/info-services/sectors-industries/food-beverage/documents-image-library/Investment%20opportunities%20in%20the%20Petfood%20 industry%20-PDF%201.6%20MB.pdf



Hope they have not relied on that very out of date report! No mention even of EBOS who have been making moves into this area since 2014...

[bull....]

Hope they have not relied on that very out of date report! No mention even of EBOS who have been making moves into this area since 2014...

old report that mbie one yes, petfood market is way bigger now plenty of room for more players even with a good player like ebos who obviously entered due to the potential

[axe]

andy's spot is bottom left of top pic :) https://www.stuff.co.nz/business/farming/opinion/96242427/fear-not-farmers-technology-and-burger-disruption-will-not-destroy-the-vuca-world

[percy]

Bit surprised to see managing director, Andy Borland, has sold all his shares in SCL,without any comment here.

[bull....]

Bit surprised to see managing director, Andy Borland, has sold all his shares in SCL,without any comment here.

further down the page your see he owns all his shares in his family trust, so most likely sold ones he owns personally

[Balance]

Writing is on the wall. Good strategy to follow management and directors. Too many examples of management getting out at the top.

[winner69]

further down the page your see he owns all his shares in his family trust, so most likely sold ones he owns personally

Possibly his LTI shares so don't blame him

Wanted some cash to put into Metro Glass ...sees that as a better investment

[percy]

Possibly his LTI shares so don't blame him

Wanted some cash to put into Metro Glass ...sees that as a better investment

Very much doubt it.
He does in fact have a history of making sensible decisions.

[Beagle]

Regarding Borland's sale he still has 1,950,000 shares as Trustee for his family trust so maybe they needed a new deck for the family batch ?
I still feel fair value is around $3.20.

[bull....]

Possibly his LTI shares so don't blame him

Wanted some cash to put into Metro Glass ...sees that as a better investment

or perhaps getting ready for retirement? maybe some other posters should email him about the best retirement village

[percy]

Mr.Apple building a deck too.?

[Snow Leopard]

Mr.Apple building a deck too.?

Reckon they are setting up a new business?

Andrew & Andrew Deckers Ltd - Custom Made Apple Wood Decks.

Best Wishes
Paper Tiger

[winner69]

Mr.Apple building a deck too.?

........with flash glass balustrades I reckon

[Dust]

Surely 2 hurricanes could hurt the world's biggest apple exporter. Could potentially have positive impact on our earnings

[bull....]

holding support , looks like a lot of accumulation occurring

[bull....]

sitting just above the top of the range again , will it breakout this time? ( did ya know the longer a consolidation lasts the stronger the eventual breakout )

all that accumulation around 3.40 odd could make those buyers look very clever in hindsight once we takeoff

[winner69]

I'm still waiting for 4 bucks

Been ages waiting

[bull....]

I'm still waiting for 4 bucks

Been ages waiting

like watching paint dry for sure has been one of those put in the bottom draw ones fore nearly 2 years lol might take an announcement of further aquisitions to get to your 4 ?

[bull....]

sitting just above the top of the range again , will it breakout this time? ( did ya know the longer a consolidation lasts the stronger the eventual breakout )

all that accumulation around 3.40 odd could make those buyers look very clever in hindsight once we takeoff

is it SCALES time.... THIS TIME

[Well Endowed]

the bid offer is um what say, reasonably wide at the moment (3.63 -$4), could we hit $4 today :eek2:

[TheHunter]

the bid offer is um what say, reasonably wide at the moment (3.63 -$4), could we hit $4 today :eek2:

Wow, don't see that every day!

[bull....]

Wow, don't see that every day!

might see that $4 soon very cheap stock once more acquisitions are done and has great div

[Well Endowed]

$3.70, Finally broken through the range!

[bull....]

$3.70, Finally broken through the range!

looking good range breakout implies over $4 so technicals and fundamentals probably lining up .... waiting for some announcements soon hopefully

[Well Endowed]

baby steps, has been range-bound with a $3.60 cap for some time. now at $3.71, all time high

[bull....]

been doing some research into china potential recently let you know soon

[Joshuatree]

Scales’ Vision:
To be the foremost investor in, and grower of, New Zealand agribusinesses byleveraging our unique insights, experience and access to collaborativesynergies.



Seeking to extend agribusiness reach through disciplined and patient investment.
Believe most consistent returns are achieved through fully vertically integrated businesses.
Developing and growing an expanding network in Asia and, in particular, China.
Our expanding international networks coupled with strong ties to China uniquely position us to
add value to the export programmes of prospective targets.
Our long-term goal:
To generate a long-run average 15% Return on Capital Employed across ourportfolio.*

[bull....]

Scales’ Vision:
To be the foremost investor in, and grower of, New Zealand agribusinesses byleveraging our unique insights, experience and access to collaborativesynergies.


Seeking to extend agribusiness reach through disciplined and patient investment.
Believe most consistent returns are achieved through fully vertically integrated businesses.
Developing and growing an expanding network in Asia and, in particular, China.
Our expanding international networks coupled with strong ties to China uniquely position us to
add value to the export programmes of prospective targets.
Our long-term goal:
To generate a long-run average 15% Return on Capital Employed across ourportfolio.*




exciting stuff a , definately one to hold for a longer time frame , do ya hold ?

see fruit imports thru shenzhen are up double digits on last yr, shenzhen is the biggest port of entry for fruit so chinese consumption of fruit definetly increasing.
like i say if scales wants to be serious player in china they will need alot more volume so they have to aquire more volume.

[Joshuatree]

Yep still holding. bull .Got itchy to sell as price went over some valns and the herd sold out/down, and how many more near perfect seasons will we get before a bad one hits weatherise? Food is a great sector though to be in atm and possible price tension and benefits with the 15% chinese holder. Another new high $3.80 atm:eek2:

Thanks for the shenzhen info, my daughter is in china atm and she notes the standard of living is high and everyone seems to have late model cars in Nanchang. Unpolluted safe NZ food highly desired .

[bull....]

Yep still holding. bull .Got itchy to sell as price went over some valns and the herd sold out/down, and how many more near perfect seasons will we get before a bad one hits weatherise? Food is a great sector though to be in atm and possible price tension and benefits with the 15% chinese holder. Another new high $3.80 atm:eek2:

Thanks for the shenzhen info, my daughter is in china atm and she notes the standard of living is high and everyone seems to have late model cars in Nanchang. Unpolluted safe NZ food highly desired .

the chinese substantial buyer ,

China Resources Ng Fung Limited ("CR Ng Fung”) is the leading food enterprise under China Resources Limited which is, with public ownership, an enterprise group and also one of the Top 500 global corporations, and an integrated food group containing food research and development, production, processing, wholesale, retail, transportation, and international trade. The main businesses include rice, meats, fruits and vegetables, frozen foods, import foods, and modern agriculture industry.

probably see why they want scales

[TheHunter]

Not the only NZ company they own a decent portion of either

[bull....]

Not the only NZ company they own a decent portion of either

those chinese buyers are smart cookies , although they might want to launch a takeover quickly before winston changes the rules

[Yoda]

If they make a profit of 60 mil, that makes an EPS OF 42. So would make a PE of 9 at the current price ?

[Snow Leopard]

If they make a profit of 60 mil, that makes an EPS OF 42. So would make a PE of 9 at the current price ?

That is, in the near future at least, very unlikely.

Best Wishes
Paper Tiger

[bull....]

If they make a profit of 60 mil, that makes an EPS OF 42. So would make a PE of 9 at the current price ?

yes share is very cheap looking ahead and im guessing here scales might be takeover before new laws come in to affect ... just guessing

[TheHunter]

If they make a profit of 60 mil, that makes an EPS OF 42. So would make a PE of 9 at the current price ?

Hmmm do you mean EBITDA of $60m..?

[Yoda]

Hmmm do you mean EBITDA of $60m..?
Thanks all..
yes Hunter, rookie mistake, thanks mate . I should be looking at the net profit , which if we take EBITDA AT 20% will give us about 48 mil possibly. So EPS of say 34 ? . So that would make a current PE of about 11.3 at todays price on the possible end of year earnings.
A. SP of $5 would equate to a PE of about 15

does that sound fair? This really isnt my forte so just learning.

[Snow Leopard]

Thanks all..
yes Hunter, rookie mistake, thanks mate . I should be looking at the net profit , which if we take EBITDA AT 20% will give us about 48 mil possibly. So EPS of say 34 ? . So that would make a current PE of about 11.3 at todays price on the possible end of year earnings.
A. SP of $5 would equate to a PE of about 15

does that sound fair? This really isnt my forte so just learning.

Expect an EPS of $0.23.

Best Wishes
Paper Tiger

[bull....]

think you should factor in assumption for acquisitions to come ( use the longview as a example ) it will change your figures dramatically.

anyway checkout my other favourite costa grp au has a pe of 31 similar pe for other similar companies around and you can see why overseas investors view a pe of 15 - 16 as cheap.

locals view pe.s as expensive , overseas people see as cheap

[Well Endowed]

I agree Bull. Plenty of interest (takeovers/ acquisitions) in other agri plays in Aussie with much higher PEs. The steady plod towards $4 is continuing..

[bull....]

I agree Bull. Plenty of interest (takeovers/ acquisitions) in other agri plays in Aussie with much higher PEs. The steady plod towards $4 is continuing..

the aussies are well used to stocks with higher pe ratio as they know if earnings grow strongly todays pe will be low later on.

and yes ag stocks are very in demand countries are trying to secure supply

[percy]

think you should factor in assumption for acquisitions to come ( use the longview as a example ) it will change your figures dramatically.

anyway checkout my other favourite costa grp au has a pe of 31 similar pe for other similar companies around and you can see why overseas investors view a pe of 15 - 16 as cheap.

locals view pe.s as expensive , overseas people see as cheap

Is this better known as the "bigger fool " theory?.
Maybe best left to the Aussies!

[bull....]

Is this better known as the "bigger fool " theory?.
Maybe best left to the Aussies!

actually if you didnt buy atm when it had a pe of 100 at 50c of the top of my head you are indeed a fool if you think just because a pe is high it the shares wont keep going up , a nother classic is amazon pe of over 200 at less than 100 now 1000, so bigger fool theory works well indeed .... if im right the aussies and oveerseas people being buying atm all the way up...

[percy]

actually if you didnt buy atm when it had a pe of 100 at 50c of the top of my head you are indeed a fool if you think just because a pe is high it the shares wont keep going up , a nother classic is amazon pe of over 200 at less than 100 now 1000, so bigger fool theory works well indeed .... if im right the aussies and oveerseas people being buying atm all the way up...

Happy to leave them to the bigger fools.

[Beagle]

Expect an EPS of $0.23.

Best Wishes
Paper Tiger

PE of 17 for what is ostensibly an argi company ??????? What does the stripy one know that the tri coloured furry one doesn't ?

[percy]

From www.4-traders.com
...............2015.....2016....2017.....2018..... 2019.
eps..........27.9.......27........23.1.....26.1... ...27.6.
So 2019 eps will be lower than 2015's..!!

[bull....]

From www.4-traders.com (http://www.4-traders.com)
...............2015.....2016....2017.....2018..... 2019.
eps..........27.9.......27........23.1.....26.1... ...27.6.
So 2019 eps will be lower than 2015's..!!

obviously a poor site lol

[bull....]

scl the next atm i reckon

[percy]

obviously a poor site lol

Yeah right.!?
No wonder I miss so many great opportunities.!!..lol.

[bull....]

Yeah right.!?
No wonder I miss so many great opportunities.!!..lol.

i can see why following a site like that lol try asb and there morningstar anaalysis so muchhhhh better lol

[Snow Leopard]

... What does the stripy one know that the tri coloured furry one doesn't ?

One hell of a lot :t_up:

But the vice versa is equally as true :t_up: :t_up:.


As to why the Scales SP is where it is and rising strongly, the brokers have a $4 ish target on it.

On pure fundamentals and conservative future growth then a current Tiger value is $3.025.
Add in some optimism and the CTV is $3.253.
Add in the China takeover factor and up it again.

Best Wishes
Paper Tiger

[TheHunter]

scl the next atm i reckon

Easy now, plenty of growth already factored into current SP...

Also remember the CEO sold $750k of shares @3.41 recently.. Also no new material info/update to earnings (required to disclose), guidance was re-affirmed recently.

SP is now above FV by my calcs.

[Beagle]

One hell of a lot :t_up:

But the vice versa is equally as true :t_up: :t_up:.


As to why the Scales SP is where it is and rising strongly, the brokers have a $4 ish target on it.

On pure fundamentals and conservative future growth then a current Tiger value is $3.025.
Add in some optimism and the CTV is $3.253.
Add in the China takeover factor and up it again.

Best Wishes
Paper Tiger
Hmmmm...there must be a lot of hungry fruit loving Chinese is all I can say to explain the current SP. Its not supported on earnings for what is ostensibly an agri company in my opinion...either that or the company is flagrantly abusing its obligations of continuous disclosure of all material information which could be actionable.
Funnily enough I am on record several times as seeing it around $3.20 myself so we're basically on the same page in terms of our thinking based on known fundmental information. Wonder how Mr Peter's might react to a takeover of a N.Z. controlled primary producer ???? Chances of getting OIO approval for that would be very very slim I would have thought. Disc: I will stick with biting real apples and leave biting the share register at the current price to others.

[bull....]

:)





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0.195283



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5.018








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intrinsic value of stock

$5.596621







Guess everyone has different valuations of a stock a number of posters say it is overvalued over $3 my valuation gives a value of $5.59 so it is cheap based on future value.

[Snow Leopard]

:)



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d1
0.18

0.169811



g2
15%

d2
0.207

0.195283
<< ?


g3
10%

d3
0.2277

0.214811
<< ?


gn
5%

d4
0.239085

0.225472
<< ?





d5
0.25095

0.236698
<< ?
















5.018








pv
4.554545
<< ?















intrinsic value of stock

$5.596621







Guess everyone has different valuations of a stock a number of posters say it is overvalued over $3 my valuation gives a value of $5.59 so it is cheap based on future value.

For the year one your discount amount A1 is the one year discount factor: Df
for year two: A2 = Df2 [i.e Df * Df]
for year three A3 = Df3
etc.

I am going to say that your 5.018 is suspect and the discounting of that to pv is definitely incorrect.

So you may want to rework it [this may help: http://pages.stern.nyu.edu/~adamodar/pdfiles/valn2ed/ch13.pdf (page 11 on)]
Best Wishes
Paper Tiger

[winner69]

Hey bull...

Using your growth assumption and a 10% discount rate I get $3.99 (same model)

Cool eh

[bull....]

For the year one your discount amount A1 is the one year discount factor: Df
for year two: A2 = Df2 [i.e Df * Df]
for year three A3 = Df3
etc.

I am going to say that your 5.018 is suspect and the discounting of that to pv is definitely incorrect.

So you may want to rework it [this may help: http://pages.stern.nyu.edu/~adamodar/pdfiles/valn2ed/ch13.pdf (page 11 on)]
Best Wishes
Paper Tiger

was in a rush so quickly typed put some stuff , yea dont know where 5.01 came from? and i forgot to put my ^ function in the calc for pv that all , anyway the instrinsic should have been 4.15 so still undervalued on this assumption based on current info.

[bull....]

Hey bull...

Using your growth assumption and a 10% discount rate I get $3.99 (same model)

Cool eh

i got anywhere between 4 - 10 playing with figures lol but nothing like 3

[Ace]

As Roger/Beagle and others will know, I'm a SCL bull and I've rooted for it at the ST meeting earlier in the year.
Despite those facts, I do agree with what others have said and that is, currently SCL is nearly if not in the range of being fully valued on a fundamental basis - and on a DCF model, of course this does depend on the assumptions and discount rates applied, which can vary based on ones tolerance to risk. I have been told that SCL and RYM have been suggested as 'safe-havens' with current political uncertainty and stands to benefit from a weakening NZD should a certain political event occur. SCL does have it's merits depending on your investing goals, it was and still remains a solid company with sound prospects.

That being said, up up and away... I don't mind the 'meteor'ic rises.

[winner69]

was in a rush so quickly typed put some stuff , yea dont know where 5.01 came from? and i forgot to put my ^ function in the calc for pv that all , anyway the instrinsic should have been 4.15 so still undervalued on this assumption based on current info.

your 4.15 and my 3.99 pretty close ....just the roundings

So not far of a 'fair' value then

[bull....]

your 4.15 and my 3.99 pretty close ....just the roundings

So not far of a 'fair' value then

yes based on current assumptions , doesnt take account of the recent nz dollar drop though and any aquisitions that might happen or govt developments etc so i would expect upside to these assumptions at some stage.

[BeeBop]

I sold using a 10% discount rate as I had decided it was well enough valued for the time being (I also had a $4 value on it using the GGM amongst other measures).....now down to only three individual holdings in my NZ portfolio. Will put the funds from this into Milford’s diversified income portfolio - a park-up for the future but still returning more than my actual discount rate of 4.3% before tax (property portfolio).

[bull....]

I sold using a 10% discount rate as I had decided it was well enough valued for the time being (I also had a $4 value on it using the GGM amongst other measures).....now down to only three individual holdings in my NZ portfolio. Will put the funds from this into Milford’s diversified income portfolio - a park-up for the future but still returning more than my actual discount rate of 4.3% before tax (property portfolio).

im holding still looks cheap

[Beagle]

As Roger/Beagle and others will know, I'm a SCL bull and I've rooted for it at the ST meeting earlier in the year.
Despite those facts, I do agree with what others have said and that is, currently SCL is nearly if not in the range of being fully valued on a fundamental basis - and on a DCF model, of course this does depend on the assumptions and discount rates applied, which can vary based on ones tolerance to risk. I have been told that SCL and RYM have been suggested as 'safe-havens' with current political uncertainty and stands to benefit from a weakening NZD should a certain political event occur. SCL does have it's merits depending on your investing goals, it was and still remains a solid company with sound prospects.

That being said, up up and away... I don't mind the 'meteor'ic rises.

Kudos to you and one or two others. I do indeed recall several attending our annual meeting in Auckland were keen on Scales including you so you've aced this :) The hound sticks with his fundamental valuation at $3.20 despite admitting to a real fondness for fresh juicy apples. Over priced shares are in abundance on the NZX and there's only a small number of shares trading SUMwhat below fair value.

[Oliver Mander]

Kudos to you and one or two others. I do indeed recall several attending our annual meeting in Auckland were keen on Scales including you so you've aced this :) The hound sticks with his fundamental valuation at $3.20 despite admitting to a real fondness for fresh juicy apples. Over priced shares are in abundance on the NZX and there's only a small number of shares trading SUMwhat below fair value.

Interesting, Beagle. Have run my own rule over this during the week, and came up with an initial valuation of $3.21. We must drink from the same foodbowl...
Does look like a solid, well-run organisation though. Bit of risk driven by exchange rate volatility...

[bull....]

guess all the just over $3 dollar valuation people have sold , are in disbelief off a price closer to $4 will probably have a coronary when it hits $5. suggestion would be go over your analysis check what you have done wrong and dont second guess the market.

[James108]

guess all the just over $3 dollar valuation people have sold , are in disbelief off a price closer to $4 will probably have a coronary when it hits $5. suggestion would be go over your analysis check what you have done wrong and dont second guess the market.

In your analysis did you take into account the cash investment it takes to generate the growth? Did you take into account debt at all?

My value from DCF is far less than yours. I suspect you need to revisit your model.

Still a holder though.

[bull....]

In your analysis did you take into account the cash investment it takes to generate the growth? Did you take into account debt at all?

My value from DCF is far less than yours. I suspect you need to revisit your model.

Still a holder though.

the example i posted is a dividend discount model not a dcf model. The current market price supports my model valuation not some other posters dcf models.

All models have an element of subjectivity its a matter of finding the one that works for the stock.

[macduffy]

the example i posted is a dividend discount model not a dcf model. The current market price supports my model valuation not some other posters dcf models.

All models have an element of subjectivity its a matter of finding the one that works for the stock.

Very true. As the saying goes - Rubbish in equals rubbish out.

;)

[bull....]

wonder if scales would be interested buyer

https://www.nzx.com/companies/TGG/announcements/308691

[bull....]

see borland was selling between 16 - 20, his selling virtually halted the share price appreciation

[TheHunter]

see borland was selling between 16 - 20, his selling virtually halted the share price appreciation

Or fundamental analysis just says its trading at fair value, Believe borland sold a lot earlier and still went higher than current prices.

[bull....]

Or fundamental analysis just says its trading at fair value, Believe borland sold a lot earlier and still went higher than current prices.

looks like wants to go higher , my valuation is still over 4 . at the moment big swings between 3.70 - 3.90 accumulation? chinese takeover lol before foreign buyer prohibited?

[Joshuatree]

Asia particularily China is insatiable for safe unpolluted food atm, its a theme sector thats a good place to be Foreign buyers are subject to scrutiny and rejection by the overseas blah blah dept beyond 20% i think can't remember specifics but as i keep going on about it creates price tension.

[Pricey]

Sold out at $3.90 a couple of weeks ago, didn't expect it to creep back to these highs! My immediate reaction was that it was associated with THL's new Chinese substantial shareholder (i.e. reminding about SCL's own Chinese investment).

[dumbfounded]

Sold out at $3.90 a couple of weeks ago, didn't expect it to creep back to these highs! My immediate reaction was that it was associated with THL's new Chinese substantial shareholder (i.e. reminding about SCL's own Chinese investment).

Me too; I thought the weather wasn't good but still the SP went up. Darn!

[macduffy]

This morning's Rural Report on NZR talked about damage to apple crops in Nelson and Hawkes Bay, allegedly caused by a dodgy batch of fungicide.

http://www.radionz.co.nz/national/programmes/ruralnews/audio/2018619810/morning-rural-news-for-31-october-2017

[bull....]

the chinese say weather is good this time of year

[bull....]

very exciting development

https://www.nzx.com/announcements/309766

[axe]

yes - could be a sign for more M and A activity by SCL. Good to see more expertise added to the board.
Divvy b4 xmas not to far away.


very exciting development

https://www.nzx.com/announcements/309766

[janner]

very exciting development

https://www.nzx.com/announcements/309766

The last thing NZ needs as a country is more acquisition from China IMO.


"Ms Chen is the Investment Director of the Corporate Development Department at China Resources Enterprise, Limited, with responsibility for M&A initiation and execution in the Asia Pacific region."


Disc. Minor holding.

[RTM]

The last thing NZ needs as a country is more acquisition from China IMO.

Or anyone else for that matter.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11940047
Another one gone. I remember hearing a talk by someone who said Kiwi's have the Triple B Syndrome, or something like that.....Beach house, Boat and Beamer. No drive to go on and create truly great and big companies for NZ. No matter how they dress these losses to NZ up, overseas share holders are always going to get the cream, even if employment does stay in NZ.
NZ ends up being poorer. And we're led from the top with the government selling our power stations.

[Dust]

The last thing NZ needs as a country is more acquisition from China IMO.


"Ms Chen is the Investment Director of the Corporate Development Department at China Resources Enterprise, Limited, with responsibility for M&A initiation and execution in the Asia Pacific region."


Disc. Minor holding.

I disagree

Try a couple of commutes on wellington's railway network and you'll be begging for it to be acquired by anyone that's more competent

Edit:typo

[janner]

Or anyone else for that matter.

In full agreement RTM.

[bull....]

The last thing NZ needs as a country is more acquisition from China IMO.


"Ms Chen is the Investment Director of the Corporate Development Department at China Resources Enterprise, Limited, with responsibility for M&A initiation and execution in the Asia Pacific region."


Disc. Minor holding.

CRE' s food division is one of the largest Chinese foodstuff suppliers in Hong Kong expanding its presence in the China market by relying on the “五豐 Ng Fung” brand' s reputation in China. ( ng fung is the owner of shares in scales )

there food division ( fruit and veges) is mainly represented in Guangdong and Fujian provinces.

A seat on the board usually offers more insight into a company for a large shareholder ..... so watch da space

[Snow Leopard]

very exciting development

https://www.nzx.com/announcements/309766

http://images5.fanpop.com/image/photos/25400000/Adorable-tiger-sleeping-save-the-tigers-25418803-504-312.jpg

[janner]

Ng Fung will set the price and to whom we will sell if they take control.

Making their profit in China..

[bull....]

Ng Fung will set the price and to whom we will sell if they take control.

Making their profit in China..

scales would struggle getting into china big time without ng fung , when you consider china is one of the worlds biggest exporters of apples

[janner]

scales would struggle getting into china big time without ng fung , when you consider china is one of the worlds biggest exporters of apples

That does not alter my statement though. They will set the price and to whom. Profit going to China ( Or maybe BVI etc ).

[GTM 3442]

Ng Fung will set the price and to whom we will sell if they take control.

Making their profit in China..

One of the things about vertical integration in an international organization is that you can decide where to take whatever profit you decide to make.

[bull....]

borland sold more shares , only 1.5m to go lol giving them away expensive retirement unit to be funded? who knows obviously raising money for something

[bull....]

pesky seller still around,
anyway anyone in cgc.au costa grp the premier performing fruit grp its only on a pe of 39 and has outperformed any stock in the same category by far

[bull....]

must be due there dec update soon?

[bull....]

excellent announcement at the top end of forecasts and a 12.5% increase in dividend.

https://www.nzx.com/announcements/311430

cANT WAIT TO HEAR ABOUT ANY AQUISITIONS NEXT YEAR

[bull....]

forgot to say have to adjust my ddm probably looks better now after the update

[winner69]

Sad you talking to yourself bull

Share price headed well over 4 bucks on that announcement, Been a while but worth the wait.

Wasn’t that long ago any announcement from Scales was met with delight and we discussed the news for days.

What’s happened everybody sold out and no cheerleaders left?

Glad I held even though been boring as doing so .....wasn’t swayed when somebody told me to f### off this thread and leave it to them Scales success. Never mind, I’m pretty thick

Where you seeing it going now bull.

[bull....]

Sad you talking to yourself bull

Share price headed well over 4 bucks on that announcement, Been a while but worth the wait.

Wasn’t that long ago any announcement from Scales was met with delight and we discussed the news for days.

What’s happened everybody sold out and no cheerleaders left?

Glad I held even though been boring as doing so .....wasn’t swayed when somebody told me to f### off this thread and leave it to them Scales success. Never mind, I’m pretty thick

Where you seeing it going now bull.

So is the life of a trader , talking to ones self most days - anyway hoping it does a costa grp share price wise and company wise

[thestg]

What’s happened everybody sold out and no cheerleaders left?

.

I'm still in. Returned 53% (Capital + Divs) to me over the last 3 years. Every time I sold down the price kept rising, so bought back in & price still kept rising. Nice share to hold & it is almost at that $4.00 mark.

[macduffy]

I'm still in too and see no reason for cheerleading while the company's performance and shareprice speak for themselves.

But cheers anyway!

:)

[Ace]

I'm still in too - always enjoyed a fundamentally sound company. Glad to see many of us support SCL - I did think the thread was a bit neglected on the ST forums.

[Snow Leopard]

Bought shares between 20-Jan-2015 & 10-Jul-2015 average price paid $1.593
Sold about 15% of holding at $3.50 in Mar-2017

Currently my second largest holding on the NZX.

[IAK]

Steady as she goes.

Average buy in price $2.28. Third largest holding.

[percy]

Interesting.?
..............................2017................ ............2018
eps Craigs.................23 cents.....................25cents
eps growth Craigs......-15%............................8.2%
eps.4-traders..............23.1cents................... 26.6 cents
eps growth.4-traders.. -14.5%.........................15%
So Craigs have eps growth of 8.2% while 4-traders have 15%
Therefore on Craigs figures, the current PE of 16.64 is twice their projected growth rate.?

[bull....]

Interesting.?
..............................2017................ ............2018
eps Craigs.................23 cents.....................25cents
eps growth Craigs......-15%............................8.2%
eps.4-traders..............23.1cents................... 26.6 cents
eps growth.4-traders.. -14.5%.........................15%
So Craigs have eps growth of 8.2% while 4-traders have 15%
Therefore on Craigs figures, the current PE of 16.64 is twice their projected growth rate.?

havent craigs always been behind the 8 ball on this stock? anyway none of the est yake account of an acquisition next year

actually 4 traders looks like next years figures are even below what scales have said they will earn next year? if im right go figure? then craigs is ? my figures are above all theres agood year next at the top of there guidance puts them on a 13.5 pe add in an aquisition and even cheaper

[bull....]

hope mr borland buying himself a nice xmas present with his recent sales , gave someone else a nice present

[percy]

Perhaps he agrees with Craigs.?.....lol.

[sb9]

Good company and everything going to plan.

I used to be one of cheerleaders for this one having bought around 1.43 or so in 2014 and got out last year at 3.50, the return was great and I thought it was time to move on. No regrets whatsoever, good luck to current holders.

[percy]

Good company and everything going to plan.

I used to be one of cheerleaders for this one having bought around 1.43 or so in 2014 and got out last year at 3.50, the return was great and I thought it was time to move on. No regrets whatsoever, good luck to current holders.

I too did very well with SCL.
I looked the numbers again this morning with the view of buying back in.
I however decided against it.

[winner69]

hope mr borland buying himself a nice xmas present with his recent sales , gave someone else a nice present

On fire eh bull

This is going to be one of the fastest buses on the NZX over the next few months

[bull....]

On fire eh bull

This is going to be one of the fastest buses on the NZX over the next few months

im praying , anyway if you compare dividends scales 19c/yr at $4.15 and seeka 20c/yr at $5.30 so on a div comparison who do you thinks more attracctive

[bull....]

big trade went through and an undisclosed buyer now waiting

[winner69]

big trade went through and an undisclosed buyer now waiting

I reckon 450 sooner than we think .....and then we start talking 5 bucks

Fast bus this one.

[TheHunter]

im praying , anyway if you compare dividends scales 19c/yr at $4.15 and seeka 20c/yr at $5.30 so on a div comparison who do you thinks more attracctive

I believe on a EPS basis this is a bit misleading however...

Fantastic company scales - consistently delivering with a great divi. Very comfortable that this has reached my target value and sold. Good luck to all holders, your money is in great hands!

[bull....]

I believe on a EPS basis this is a bit misleading however...

Fantastic company scales - consistently delivering with a great divi. Very comfortable that this has reached my target value and sold. Good luck to all holders, your money is in great hands!

were you the 700k share odd seller?

[bull....]

I reckon 450 sooner than we think .....and then we start talking 5 bucks

Fast bus this one.

heres hoping , chinese buyers might get us there?

[Joshuatree]

Just hope the water prob in Hawkesbay doesn't morph into a full blown drought.

[bull....]

Just hope the water prob in Hawkesbay doesn't morph into a full blown drought.

good irrigation methods protect them,

anyway was thinking the dry winter and warm spring would have been good for pollination ya know tight bloom and strong bud burst would have had the bees working hard.
looks like a hot summer coming should be good for sugar and colour in the apples = good size fruit.

im not a expert be good if anyone in hawkes bay can confirm how good pollination went? im assuming it was good based on there forecast

[alistar_mid]

havent craigs always been behind the 8 ball on this stock? anyway none of the est yake account of an acquisition next year

actually 4 traders looks like next years figures are even below what scales have said they will earn next year? if im right go figure? then craigs is ? my figures are above all theres agood year next at the top of there guidance puts them on a 13.5 pe add in an aquisition and even cheaper

lol, my mate at craigs got me onto it at $1.42 back in Jan 15...

[Joshuatree]

Been a fantastic season for stonefruit/cherries atp and prob for apples too. Extra rain earlier in the year was great too but need to keep a weather eye out on possible drought developing in hawkesbay for one, this could cause water/irrigation issues if its a bad one. We have had 3 incredible seasons in a row; a weather event will arrive sooner or later.

[janner]

heres hoping , chinese buyers might get us there?

A mess of pottage springs to mind...

[Joshuatree]

Napier already having drought issues (http://www.radionz.co.nz/national/programmes/thepanel/audio/2018624275/napier-already-having-drought-issues)

[bull....]

A mess of pottage springs to mind...

lol yes we are all allowed to dream of possibilities, i would certainly hope chinese buyers paid well in excess of current prices

[Ace]

Been a fantastic season for stonefruit/cherries atp and prob for apples too. Extra rain earlier in the year was great too but need to keep a weather eye out on possible drought developing in hawkesbay for one, this could cause water/irrigation issues if its a bad one. We have had 3 incredible seasons in a row; a weather event will arrive sooner or later.

We've already had our weather event this year with the heavy rains and the dual cyclones - fingers crossed that was the worst of it. Scales, or Mr. Apple performed well given those circumstances. I'm hoping the weather will be in our favor this season.

[bull....]

good thing about scales div is paid in january , helps pay for xmas celebrations

[janner]

good thing about scales div is paid in january , helps pay for xmas celebrations

News of a DRP would be a good Christmas present to go with that dividend ..

[macduffy]

News of a DRP would be a good Christmas present to go with that dividend ..

Yes, as long as SCL has a profitable use for the additional capital. Otherwise, it's just diluting everyone's holding.

[janner]

Yes, as long as SCL has a profitable use for the additional capital. Otherwise, it's just diluting everyone's holding.

Agree. I feel sure that SCL have growth in mind. It can always be used to reduce debt.

[winner69]

Yes, as long as SCL has a profitable use for the additional capital. Otherwise, it's just diluting everyone's holding.


Those who take up DRP increase share of company at expense of those who take the cash (get diluted) .....yes?

[macduffy]

Those who take up DRP increase share of company at expense of those who take the cash (get diluted) .....yes?

Yes. But the earnings per share - all shares - also gets diluted, so, theoretically, the value of the shares will decline.

On another point, I wouldn't be encouraging SCL to increase capital merely to reduce debt - unless of course the level of debt becomes a problem.

[bull....]

chart shows a little resistance at 4.30 on the hourlies a bust thru could reach top of bollingers at 4.40, so looks the chart

[janner]

On another point, I wouldn't be encouraging SCL to increase capital merely to reduce debt - unless of course the level of debt becomes a problem.

Two ways of looking at that .

Reducing debt is always a good thing.. Also gives more capital for when opportunity presents it self..

That is if it is a growth company. Which I feel SCL is.

[axe]

There could be an on-market buyback of the DRP shares rather than issuance of new ones.
Gives holders the choice to take the DRP if they wish but doesn't dilute holders who don't participate.


Yes. But the earnings per share - all shares - also gets diluted, so, theoretically, the value of the shares will decline.

On another point, I wouldn't be encouraging SCL to increase capital merely to reduce debt - unless of course the level of debt becomes a problem.

[bull....]

ill be hoping they issue lots of shares for a really big aquisition

[Beagle]

I too did very well with SCL.
I looked the numbers again this morning with the view of buying back in.
I however decided against it.

Yeap me too. After weighing (sorry couldn't resist), everything up carefully I think its more than fully priced but remember it fondly for the juicy profits already enjoyed.

[bull....]

yes you should try not to dwell on a stock when you make a mistake , i my self can attest it is not good for the heart having made many a mistake over time anyway ill be enjoying some xmas turkey on scales and be praying for $6 next year

[macduffy]

yes you should try not to dwell on a stock when you make a mistake , i my self can attest it is not good for the heart having made many a mistake over time anyway ill be enjoying some xmas turkey on scales and be praying for $6 next year

Food for thought! But is prayer really a good investment strategy?

;)

I hold SCL.

[bull....]

Food for thought! But is prayer really a good investment strategy?

;)

I hold SCL.

i always like to pay homage to the market gods and pray for good fortune the coming year

[bull....]

I reckon 450 sooner than we think .....and then we start talking 5 bucks

Fast bus this one.

your 4.50 is actually the top of the bollinger band on the quarterly time frame according to big charts which means possible it could reach it by end of the year? must have been where you got the figure a winner?

[thestg]

Contaminated spray may cost region’s apple exporters $3m
By Doug Laing
doug.laing@hbtoday.co.nz

REMOVED: The imported Mancozeb has been withdrawn from sale after russet was discovered in Royal Gala crop.

The apple industry is still not sure of the cost of a fungicide contamination which has threatened to destroy 35ha of apples in Hawke’s Bay and lop several million dollars off the value of the export harvest.

[RTM]

Contaminated spray may cost region’s apple exporters $3m
By Doug Laing
doug.laing@hbtoday.co.nz

REMOVED: The imported Mancozeb has been withdrawn from sale after russet was discovered in Royal Gala crop.

The apple industry is still not sure of the cost of a fungicide contamination which has threatened to destroy 35ha of apples in Hawke’s Bay and lop several million dollars off the value of the export harvest.

Thanks...here is the link for those interested:
http://www.nzherald.co.nz/the-country/news/article.cfm?c_id=16&objectid=11957081

And to put it into perspective............

"With almost 10,000ha of apple orchard nationwide, the area affected represents about 1.85 per cent, which Mr Pollard said may be the equivalent of stock lost most years because of hail damage, and some of the loss is being minimised by thinning.
But based on the value of last year's exports — about $800 million — export market losses in Hawke's Bay could be about $3 million."

Lets hope for no hail damage this year, that will compensate for it.

[bull....]

updated me model get $4.70 , $5.88 assuming current growth continues

[bull....]

wow i was just reading afr and see that if you had invested $1000 in westfield in 1960 it is worth 440 million today:scared: not a bad investment for 50yrs

lets hope i make that with scales in 50yrs :t_up:

[bull....]

big volumes buying yesterday , people still see value at this price - seeka 20c div $5.75 scales 19c $4.35 people might say well spark is 25c at $3.70 better , well no spark is not a growth company like seeka and scales if your buying seeka or scales and they are both growing at the same rate my comparison of divs is relativant.

[bull....]

im hoping as the share price keeps rising that the company takes advantage of this to issue shares for nice big juicy acquisition

[gbogo]

that would be a-peeling...

[bull....]

that would be a-peeling...

they were saying in a conference call they were looking at some really appealing stuff?

[Well Endowed]

Wasn't there talk of some sort of canning/processing option in the pet food area?

[winner69]

they were saying in a conference call they were looking at some really appealing stuff?

We got to $4.50 mate

That's good eh .... suppose we now look forward to $5 ...sooner than later / earlier than expected

I'm glad I didn't take that advice from a poster to f@## off this thread a few years ago and leave it to the believers to enjoy ... a lot of the believers seem to have deserted the ship

I'll keep chatting to you bull --- rather lonely on here otherwise eh

[bull....]

We got to $4.50 mate

That's good eh .... suppose we now look forward to $5 ...sooner than later / earlier than expected

I'm glad I didn't take that advice from a poster to f@## off this thread a few years ago and leave it to the believers to enjoy ... a lot of the believers seem to have deserted the ship

I'll keep chatting to you bull --- rather lonely on here otherwise eh

4.50 yes and big volumes again today at 4.50 someone sees good value still just like me , how about that salt funds who sold heaps recently ( obviously to some happy chappy now ) they must be throwing the xmas toys at the plonker who said sell.

you should post more on here good knowledgable person you are

[bull....]

thought my upgraded model of 4.70 was good but i see credit suisse upgraded there target price for scales to $5 yesterday explains the big volumes and confirms its still under valued in analyst eyes

[Joshuatree]

Keep talking it up guys, use your illusion, manifest, manifest.:D

[bull....]

Keep talking it up guys, use your illusion, manifest, manifest.:D

only highlighting how under valued it was , now analysts are upgrading the companies just confirms it still is under valued :t_up:

[Joshuatree]

Still waaaaaaay undervalued!!!(inserts grain of salt). Personally im holding SCL but pigging out on strawbs ,apricots and Nectos atm.And guttsing out on Cherries those big black taste sensations with a surface tension that creates a great bite.

[winner69]

only highlighting how under valued it was , now analysts are upgrading the companies just confirms it still is under valued :t_up:

You use the ddm model eh .....I’ve got a DCF model running for Scales

Just updated it

Base scenario gives a value of $5.11 which is pretty good

Worst case assumptions comes out at $4.23 and an optimistic scenario is $5.68

So pretty comfortable with current price and can’t see why it shouldn’t get over 5 bucks sometime soon.

Cheers

[Joshuatree]

$5 Feb 6th

[bull....]

2 analysts following scales on reuters just updated to buy and outperform ratings with target above current price

[Joshuatree]

2 analysts on 4traders updatedwith $4.60 av, one $5 one $4.20 . 1 outperform, 1 buy.

[bull....]

2 analysts on 4traders updatedwith $4.60 av, one $5 one $4.20 . 1 outperform, 1 buy.

who had 4.20 ? they may need to look at there analysis? 4.60 close yesterday everyone else weighted closer to 5 they risk looking behind the 8 ball

[couta1]

Well done to holders, but at it's current PE I wouldn't touch it with a barge poll, no margin of safety at current prices. PS-Had a passing thought about collecting the 9c Jan divvy when it was $4.30 ish but yeah nah, not now.

[bull....]

Well done to holders, but at it's current PE I wouldn't touch it with a barge poll, no margin of safety at current prices. PS-Had a passing thought about collecting the 9c Jan divvy when it was $4.30 ish but yeah nah, not now.

you shouldnt be looking at current pe , it is irrellevant , if you wish to use this metric use one for future years which if its a growth company ( like scales ) will be substantially less , gootaa remeber your buying future earnings.
in fact dear i say scales is a better prospect than your spark as far as divs go as in future divs from scales could be substantailly higher than spark ue to the fact ones a growth company the other struggling to maintain equilibrium.

[bull....]

https://www.investopedia.com/terms/f/forwardpe.asp

explains why you should use forward pe , not current pe

[macduffy]

https://www.investopedia.com/terms/f/forwardpe.asp

explains why you should use forward pe , not current pe

True enough. The tricky part is estimating forward earnings.

;)

[bull....]

True enough. The tricky part is estimating forward earnings.

;)

agree , generally asumptions could be made on past growth rates , forward looking assumptions on demand and world growth , stock markets , aquisitions , etc etc anyway shouldnt use it in isolation.

[winner69]

Close at 477 eh bull ....ALL TIME RECORD HIGH

Amazing the lack of excitment on this thread eh ...the previous cheerleaders got off the bus just as it sped up.

Still a fair way to go I reckon .....even if it there isn't any corporate activity in the wind.

[winner69]

Still reckon 511/568 is fair range

[couta1]

you shouldnt be looking at current pe , it is irrellevant , if you wish to use this metric use one for future years which if its a growth company ( like scales ) will be substantially less , gootaa remeber your buying future earnings.
in fact dear i say scales is a better prospect than your spark as far as divs go as in future divs from scales could be substantailly higher than spark ue to the fact ones a growth company the other struggling to maintain equilibrium. PE thoughts aside, SCL has a lot more risk than SPK which acts more like a hedge fund, the dividend would need a huge kick in the pants to get near SPK( Nearly double based on current SP) I don't want all my money in what I consider high risk stocks ie currency/weather/various fruit diseases/certain insect risks etc

[macduffy]

Close at 477 eh bull ....ALL TIME RECORD HIGH

Amazing the lack of excitment on this thread eh ...the previous cheerleaders got off the bus just as it sped up.

Still a fair way to go I reckon .....even if it there isn't any corporate activity in the wind.

Still here, winner. Just wondering how much more juice can be squeezed out of the humble apple. (Yes, there are other ingredients in the pie but apple is the main one!)

[Joshuatree]

Oh my golly this is about the third stock i hold at new highs atm . Having a G&T for this new norm. How many times have i thought, time to sell lol.

[RupertBear]

Oh my golly this is about the third stock i hold at new highs atm . Having a G&T for this new norm. How many times have i thought, time to sell lol.

Well done :) I thought about selling so many times that I did...at $3.50 :( freeking typical :rolleyes:

[percy]

Well done :) I thought about selling so many times that I did...at $3.50 :( freeking typical :rolleyes:

Don't every worry about that,so long as the stock you brought, performs better than the one you sold.!

[RupertBear]

Don't every worry about that,so long as the stock you brought, performs better than the one you sold.!

Thanks Percy good point, nibbled a few PPH instead so cant complain :)

[bull....]

Still reckon 511/568 is fair range

its xmas week be nice eh a 5

[winner69]

Another RECORD CLOSE eh bull

It’ll be 5 bucks by Christmas

That’ll be good.

[bull....]

was that a doji star close?

[winner69]

was that a doji star close?

That’s a good sign isn’t it?

Wouldn’t want an Abandoned Baby would we

[carrom74]

some justification with regards to the improved market update.Having said that SCL is a weather dependent company too...

http://www.freshplaza.com/article/186689/Failed-apple-harvest-in-Europe-wont-be-compensated-for-by-global-production

New Zealand
"With an increase of 30,000 tonnes the harvest is 570,000 tonnes thanks to good cultivation conditions. In the wake of the production the export will also continue to rise and reach 380,000 tonnes. Due to the improved prices the export to Europe will increase. The export to Asia is expected to remain stable".

[winner69]

some justification with regards to the improved market update.Having said that SCL is a weather dependent company too...

http://www.freshplaza.com/article/186689/Failed-apple-harvest-in-Europe-wont-be-compensated-for-by-global-production

New Zealand
"With an increase of 30,000 tonnes the harvest is 570,000 tonnes thanks to good cultivation conditions. In the wake of the production the export will also continue to rise and reach 380,000 tonnes. Due to the improved prices the export to Europe will increase. The export to Asia is expected to remain stable".

Geoffrey Palmer an ex PM once said New Zealand 'is an irredeemably pluvial country’

That’s good enough for me.

[gbogo]

I gather SCL will be high in the Top 5 picks for 2018 for a large broker - these are in the NZ Herald this weekend, I think?

[IAK]

Fruit growers turn to robots to solve labour shortage.



http://www.newshub.co.nz/home/new-zealand/2018/01/fruit-growers-turn-to-robots-to-solve-labour-shortage.html

[LAC]

Fruit growers turn to robots to solve labour shortage.



http://www.newshub.co.nz/home/new-zealand/2018/01/fruit-growers-turn-to-robots-to-solve-labour-shortage.html

Wow that is impressive, I just hope they stay in NZ and dont get bought out:(

[IAK]

Divie in the bank - nice 😀

[winner69]

Getting close to 10% of highs

Might let it go a bit more before evicting it from the portfolio....but too much more

Been a great ride over the last few years

Bull me old mate ...suppose you have already sold out (in the 470s?) you canny bastard. Good on you, well done

[bull....]

Getting close to 10% of highs

Might let it go a bit more before evicting it from the portfolio....but too much more

Been a great ride over the last few years

Bull me old mate ...suppose you have already sold out (in the 470s?) you canny bastard. Good on you, well done

yes sad to say i have departed the register , not a reflection on the company just my belief that a correction was due , so will be actively watching still.

[winner69]

yes sad to say i have departed the register , not a reflection on the company just my belief that a correction was due , so will be actively watching still.

Not sad mate are you, you should be happy with the dosh

Thought you would’ve been gone as your trading timeframe is much shorter than mine. I’ll probably be gone soon as well but you never know.

[bull....]

Not sad mate are you, you should be happy with the dosh

Thought you would’ve been gone as your trading timeframe is much shorter than mine. I’ll probably be gone soon as well but you never know.

always looking for the next great thing us gamblers lol ... anyway im sure your long term pile of dosh is looking pretty good even after a correction.

[bull....]

see on the news golden bay apples? was hammered by the storm , how scales go?

[lawson]

I don't know but Golden Bay Apples growers are in Motueka, Riwaka, Nelson etc and that area seemed to get hit hardest. Scales Apples are grown in Hawkes Bay don't think it copped it so bad afaik

[Joshuatree]

No probs and Golden delicious are a very minor variety any ways these days as i understand it

Hawke's Bay misses out on full force of Gita (http://www.nzherald.co.nz/hawkes-bay-today/news/article.cfm?c_id=1503462&objectid=11998405)

[bull....]

great result in a challenging year , shame there not seeing hardly any growth in ebitda for next year

[Balance]

great result in a challenging year , shame there not seeing hardly any growth in ebitda for next year


Chilean fruit crops having a huge impact on prices in China.

NZ cherry growers have had a bad season.

Watch the Chilean apple crop carefully as 2017 was adversely impacted.

[winner69]

No bull.. not great as the Chairman said ‘very satisfactory’

Pretty ho hum is my view

Probably another year of going nowhere

That Costa in Aussie on fire

[bull....]

No bull.. not great as the Chairman said ‘very satisfactory’

Pretty ho hum is my view

Probably another year of going nowhere

That Costa in Aussie on fire

that costa is da bomb :t_up: be $10 soon i reckon lol

[winner69]

Scales doing well with their pet food ....selling heaps more but margins look to be under pressure

[Sideshow Bob]

Scales doing well with their pet food ....selling heaps more but margins look to be under pressure

Prices being paid to suppliers higher over the past two years - but hope they covered currency at the start of the season.

[Balance]

No bull.. not great as the Chairman said ‘very satisfactory’

Pretty ho hum is my view

Probably another year of going nowhere

That Costa in Aussie on fire

Stock on a PE of 19.3X.

Gross dividend yield of 5.9%.

Too high a multiple and too low a dividend (as an agricultural stock exposure) for me, especially with no growth and Chilean competition becoming stronger.

[macduffy]

Stock on a PE of 19.3X.

Gross dividend yield of 5.9%.

Too high a multiple and too low a dividend (as an agricultural stock exposure) for me, especially with no growth and Chilean competition becoming stronger.

I agree, Balance. More downside risk rhan upside from here, I reckon.

[percy]

From www.4-traders.com
...............2015.....2016....2017.....2018..... 2019.
eps..........27.9.......27........23.1.....26.1... ...27.6.
So 2019 eps will be lower than 2015's..!!

Above posted 11-10-2017
Not too far out.
Actual 2017 eps were 22.6. not 23.1.

[Balance]

Above posted 11-10-2017
Not too far out.
Actual 2017 eps were 22.6. not 23.1.

Does not look like 2018 is going to deliver 26.1 eps?

Debt level has increased and increased dividends will be via higher debt level too this year.

[Beagle]

Stock on a PE of 19.3X.

Gross dividend yield of 5.9%.

Too high a multiple and too low a dividend (as an agricultural stock exposure) for me, especially with no growth and Chilean competition becoming stronger.

I agree. Those multiples are anything but compelling for what is primarily an agri stock. Happy to eat their apples though :)

[Balance]

I agree. Those multiples are anything but compelling for what is primarily an agri stock. Happy to eat their apples though :)

Happy to eat NZ apples - the best in the world.

The Australians cannot figure out how our apples are so much better (juicier, sweeter and crispier) than theirs now that they get NZ apples over there.

I told them that it's all due to the fair dinkum soil, climate and weather we get over here.

[IAK]

Bought into this company soon after listing, Quite happy to hold for the dividend yield.

Disc. Investor

[bull....]

think you should factor in assumption for acquisitions to come ( use the longview as a example ) it will change your figures dramatically.

anyway checkout my other favourite costa grp au has a pe of 31 similar pe for other similar companies around and you can see why overseas investors view a pe of 15 - 16 as cheap.

locals view pe.s as expensive , overseas people see as cheap

pe last yr 31 now 21 just goes to show high pe now can mean jack in the future when a company grows

[Beagle]

Yeah its growing apples but you must be reading a different presentation that the rest of us because it isn't growing EPS and neither is it forecasting too.
PE's don't contract when EPS reduces, they expand ! http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/SCL/314829/275361.pdf - see page 4 ...these are NOT compelling numbers for any Bull...pretty compelling if you're a Bear though.

[Joshuatree]

Possible expansion into forestry as the govt s 1 billion trees plan takes shape. Good macro opps out there. Growing pine seedlings, etc.

[Well Endowed]

Not sure how far through the harvest they'd be, but looks like some fairly brutal weather in the Hawkes Bay

https://www.stuff.co.nz/national/102084519/live-heavy-rain-brings-flooding-evacuations

[Balance]

Not sure how far through the harvest they'd be, but looks like some fairly brutal weather in the Hawkes Bay

https://www.stuff.co.nz/national/102084519/live-heavy-rain-brings-flooding-evacuations

Will be covered by insurance?

[Well Endowed]

would insurance cover crop that is harvestable but lower grade due to skin imperfections, bruising etc?

edit: I'm not familiar with commercial fruitcrop insurance, but was of the understanding premiums were reasonably expensive (equating atleast 15% of total crop price each harvest). I'd have guessed if any insurance was in place it might be more for total loss rather than reduced quality?

[pierre]

would insurance cover crop that is harvestable but lower grade due to skin imperfections, bruising etc?

edit: I'm not familiar with commercial fruitcrop insurance, but was of the understanding premiums were reasonably expensive (equating atleast 15% of total crop price each harvest). I'd have guessed if any insurance was in place it might be more for total loss rather than reduced quality?

If there is any insurance, let's hope that it wasn't placed with CBL!