quote:
Originally posted by Mick100
Quote:
quote:Originally posted by Snoopy
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At those profit levels the forward PER improves to around 7.6-9.3 at today' share prices. That is probably reasonable at the top of the business cycle, for a cyclical business. So I see no compelling reason why the PGW share price should go higher from here.
SNOOPY
discl: hold PGW
As usual, your getting bogged down in the details and missing the big picture again Snoopy. What do you think is going to happen to food prices when a big chunk of the world's arable land is being used to grow crops for bio fuel production? The main source of protien in asian diets comes from chicken. What do you think is going to happen to food prices if every last chicken is wiped out by bird flu? What do you think the growing middle class (now 200m in china) are going to spend more money on than they did previously? And remember that china's ag productivity levels are already quite high so there's not alot of scope for increased production domestically. Where are they going to get the food from which meets their newly aquired tastes?
World food prices are going to be heading north in my opinion and although NZ is no longer the cheapest producer of meat and dairy products it is still a more efficient producer than most other countries in the world. PGW has the lions share of farm retail business so they do stand to benifit from rising world food prices.
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