Tassal's move into prawn production is starting to sound like a shrewd diversification. The news of tainted prawns from Thailand is also good news.
I vaguely remember reading on another post here how a HC contributor asked the Managing Director about the exports to China and apparently being told that those fish could be diverted to Vietnam without too much trouble. Exports are only about a fifth of sales. There may be a prawn execution risk, but risk is evident in the growth strategies of all companies.
I have read here that the shorters are expecting to make a profit if just one of the risk factors turns negative. However the opposite side of the argument is just as convincing. What if just *one* of the risk factors suddenly disappears? The China trade dispute ends... There is good news about prawn tonnage number -- which seems to be ahead of schedule... The $AU drops and Tassal salmon is cheape..r. It would have quite an impact in a positive way as these negative factors seem to already been built in to the share price. Unlike with A2M where a foreseeable profit downgrade probably *should* have been built in to a share price sitting near twelve month highs, shorters are shorting TGR which is closer to twelve month lows than highs; and expectations are already low. It is no wonder we're starting to see "Change of Director's Interests Notice" annnouncements recently. And as the ex-Tassal employee wrote on a previous thread, if there were production issues he would have heard of it through his ex-employee contacts in Tasmania. I'd say things are looking good overall. As I wrote, we just need production to continue to grow and when one outstanding risk factor disappears, this company will start appearing on investors' radars again.
TGR Price at posting:
$3.35 Sentiment: Buy Disclosure: Held
