fresh look

After my last post, I took 'a cold shower' and did some cold, hard numbers of SHV. I can't really attach the Revenue/cost/profit ratio analysis I did.

Suffice to say, SHV could only be called a 'speculative buy'. While its a relatively solid, food business, the debt ratio and ongoing CapX ups the risk profile....but if management is sensible, the return potential is huge....

Interesting facts: in 2003 SHV owned 1800 acres, managed 8000 acres and handled 2 800 metric tonnes of almonds....made 31 cents EPS with 35
million shares on issue...share price was between $3-4
In February 2012, SHV owns about 10 000 acres (not including long term lease), will have about 7 600 acres under management (including long term
lease) following the Olam contract and will handle 7 300 metric tonnes just from their own orchards..........made 22.3 cents EPS in 2011 with 56 milion
shares on issue.

SHV's best year was 2007 with revenue of 231m, they eked out a profit before tax margin of 17.3 cents for each dollar of revenue......for EPS of 71 cents.

SHV's worst year (by margins) was last financial...on revenue of about 255m, they made about 4.9 cents profit before tax of each revenue dollar (excluding accounting gimmicks)...and EPS of 22.3 cents

The profitability decline is due to almond price, exchange rate, less lucrative management fees and costs of holding almost half their 'owned orchards' which do not contribute any income....