The ABC should not be too much of a distraction for management. Is there a plan for WBA based on servicing a market?
What is the point of this company now? For me it is a balanced exposure to Australian Agriculture. The idea that they might grow cotton, walnuts, dorpas and almonds well. They do seem to have a strong operations team who are close to benchmark productivity per hectare and per megalitre. Will family farms outcompete long term in this game with strong commitment and less corporate overhead. In a drought, the more secure water in the Murrumbidgee basin should be a profitability lever. I can't see how cotton delivers this. Cotton is the buffer commodity (i.e. no drought premium) that WBA grow when there is water. There needs to be a core idea of servicing some market or other.
With Walnuts there should be some pricing power with their dominant/offseason position. Excuses about world commodity markets for Walnuts shows underinvestment in value chain relationships. With Ross Burling joining the board in Nov 2018 maybe we will see more developments in the nut side of the business.
$1.17 must be getting into breakup territory where there is value taking them over for the water? Robinsons have taught WBA to grow cotton. They are now settled into the Riverina from Tasmania. With a 180 year history I'd like to see a bit more of the marketing 'pluck' that founded the Walnut business. What are the gaps in nut value chains and how can WBA nimbly service these?
epeeist, the changes to this company over the past few/15 years have been broad and bold. I am still backing Chris Corrigan to keep a lid on corporate overheads (like $500K management flight costs and $2.8M executive compensation look big compared to a 2.1M HY Profit) and pull a new strategy out of the hat. Sentiment changing to buy at these levels.
WBA Price at posting:
$1.17 Sentiment: Hold Disclosure: Held
