The value is not 'in the acreage'.......it's in the whole mature almond orchard' which is a CAPEX creation
Just weeks ago, SHV paid about 20 million for only 1 500 acres of mature orchard.
It's difficult to value SHV's 15000 acres against Olams 30 000 because......SHV will only have about 6 000 mature orchard and Olam will only have about half mature...
And the orchards fit all the way in between the Capex and earnings stages.....eg. mature orchards are obviously massive cash cows with minimal ongoing cost
As better ways to value the stock....is traditional discount cashflow basis.......for example, the stock will probably earn at least 40 cents until 2013......and will probably earn that post 2013 even with loss of the contract
SHV Price at posting:
$2.25 Sentiment: None Disclosure: Held
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