Inghams looks like it could be in for a decent run in FY21, and hopefully a turning point from the recent years. For those who bought the September/October dips at around $3, well done as I reckon we may have passed through that point now.
Chanticleer / Financial Review had an article on the most 'undervalued' stocks of 2021 to watch based on price vs brokers consensus. Sure there are some issues with that metric, but AFR was pretty good at highlighting the pros and cons of it. Inghams ranked 32nd with price being 16% below the consensus brokers target price of $3.73. My personal intrinsic value calculation is perhaps a bit lower at around $3.60, but much of a muchness.
While the article talked about gold as the main area of consensus undervalued stocks, I thought the food and agriculture was more interesting. You have A2Milk (11th), Elders (12th), Tassals (18th), United Malt (23rd), Collins Food (28th), Inghams (32nd), Nufarm (38th), and Bega Cheese (45th) in the Top 50. Compare that to most shorted ASX stocks, and it's quite the situation: Tassals (2nd), Inghams (5th), and A2Milk (9th), with none others of note though.
If Inghams throws off +4% dividends, 2-3% EPS growth as expected, and 10-15% share price appreciation over the next year, won't be a bad year for shareholders.. let's see. Good luck.
ING Price at posting:
$3.17 Sentiment: Buy Disclosure: Held
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