Farmer Fred - they haven't done anything that has worked IMO. They are playing the distraction card, and thumbing their rosary beads hoping things will work out somehow. This year's financials for the (old) Graincorp business are based on a year when receivals were nearly exactly the average of the last ten years. GNC is worth about $4 per share IMO. The high Aussie may come down and provide a little bit extra in years to come. A bumper harvest will help if it comes. However through the cycle $4 seems about right at present.
However sadly the level of competition is intensifying, and AWB, GNC and other competitors will beat each other over the heads, invest more capital and get less return.
Grain farmers are getting bigger scaled, and have more access to info than ever before - getting harder to treat them like mushrooms.
Nobody knows what the share price will do, and how long reality will take to settle in, but I can follow the financials and see the trends. I do not believe in turnarounds unless I see evidence of something turning around. The recent acquisition is designed to get management higher pay as much as anything else IMO. And in NSW they pay better than anywhere else in Aus. Another competitive disadvantage for GNC.
Soon management will be strutting the globe distracted by the brewing industry and frequent flyer points. I'd love to be part of the beer tasting part of that picture.
Excuse my negativity - but I am . . . negative.
GNC Price at posting:
$6.04 Sentiment: ST Sell Disclosure: Held
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