all of this talk of El Nino and we are gong to fry is of course absolute nonsense when it comes to Graincorp
why OK - these are the reasons.
El Nino = less rainfall on the east coats. So ??? what is the issue? The excessive rainfall in 2021 and 2022 was extremely disruptive - but this did not effect the value of Graincorp
1 - it is not about the rainfall now, or even in 6 months time, its about the ground water - the soil in the grain growing areas is damp, if not wet. These conditions are actually better for planting. So on this basis another year of high yields. Plants are pretty smart in knowing how to grow, probably smarter than a lot of these financial Anal ists .
2- So if the East coast dries up (after two years of extreme drought which is unlikely anyway) - what about Victoria and the QLD growing areas?
3- Graincorp is well diversified, and also has the insurance deal to back them up.
4- Graincorp value is not about all the product they handle - they possess considerable assets in the Port and Transport infrastructure. This is value that can only appreciate. But of course they do need to generate cashflow. But take into consideration 2018-2021 when nothing was moving - Graincorp still survived by making themselves meaner and leaner. Which has now flowed onto current exceptional productivity
My thoughts are that GC are about 20% undervalued, and being 'dull and boring' off the radar. Anything sub $7 is a steal
cheers all Ports
GNC Price at posting:
$6.88 Sentiment: Buy Disclosure: Held
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