I hear you about the liquidity. PGW is not a traders share. I would crash the market if I sold my total PGW stake in a hurry. And as you found out mike2020, with PGW, it can take as few as 10,000 shares to do that! Psychologically I get around this 'lack of liquidity' by imagining holding my shares right through the business cycle and thinking about those juicy dividends I will be raking in at the top. PGW has never been my biggest NZX shareholding. But I think PGW still holds the record for the largest dividend cheque from an operational business period that I have ever received. There may be no dividend this calendar year. But my hybrid capitalised earnings and dividend valuation as of now:
https://www.sharetrader.co.nz/showth...=1#post1043694
is telling me this share is worth $3.13, as a 'mid-point' business cycle valuation, based on my required gross yield of 9%. Granted of the five years I was using for business cycle valuation purposes 2021, 2022 and 2023 were exceptionally good. But with shares trading at $1.92 on the market today, that is a 39% discount to my fair value mid business cycle price. For a stable company in a steady sized but cyclical market, my 'rule of thumb' is that 'the bottom' is 20% below my mid business cycle fair valuation. That equates to $2.50. But on the market at $1.92, we are 23% below even that! According to the stockpicking competition, PGW shares have slumped 43.53% just this year. This makes it the worst performing share of all, below even Synlait and Rua Biosciences. This to me is crazy. The receivers are not barking at the PGW gate. Blame the Alan Lai fracas?
I disagree about the dividend being AWOL as far as we can forecast. Alan Lai is an international businessman and he needs cashflow from PGW to keep his other business interests humming. We know that PGW has the capacity, and banking syndicate approval for some level of dividend to be paid. So I think it will happen in the first half of CY2025, once the new Alan Lai lead board is in place.
If farmers need to keep their animals and crops alive, then they will be spending at retail, even if they have to go into debt to do so. If they can't afford to keep their animals, then it is off to the livestock yards with them and PGW clips the ticket. Real Estate does seem to be a perpetual thorn in the side of the PGW empire. But I did hear on the rural news this morning that the price for rural land for the three months to the end of March has not dropped as expected. So at least that is not a negative. It helps to think of PGW Real Estate as part of the old 'One PGW' plan. That is, it opens up cross selling opportunities to new farm owners, even if the Real Estate division is not profitable within itself right now.
The only thing that is stopping me buying even more PGW shares today is my self imposed rule of not being allowed to buy a second order of the same share twice in a row. I have to buy into a different share next, before I am 'allowed' another bite at PGW.
The cost cutting has started. Those expensive Santa Fes, are in the rear view mirror now, just like Christmas. Our local Ford dealer had a yard full of PGW branded Rangers a couple of months ago. PGW is keeping ahead of Farmlands. The new Farmlands Rangers are only making their way onto that same Ford yard now.
SNOOPY