Just a quick summary of what I understand on Graincorp.
1) They relayed a profit upgrade last Wednesday. Yes, a rare profit upgrade in this environment. I believe it was > 80% above consensus estimates.
2) They are taking market share away from AWB. AWB lost their bulk wheat monopoly.
3) If ABB is taken over by the Canadian mob, instos. and investors who want similar direct exposure may have to turn to AWB or GNC.
4) Depending on the funds raised, the balance sheet of GNC will look much better.
5) This is a volume driven business, not a price driven business. Whilst the price of wheat/ grains will no doubt have an effect on the volumes produced, it is more stable and less volatile than soft commodity producers.
As for valuations, please contact your professional adviser to discuss. I'm posting here to talk about fundamentals and will not provide price valuations.
GNC Price at posting:
$6.26 Sentiment: LT Buy Disclosure: Held
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