SHV vs Almond Price + a downgrade, page-4

lightforce
when you have a different view to a long holder, it oesnt man you are a shorter. Take me for instance, I like the stock conceptually but as indicated earlier and confirmed by Canncord. SHVs SP and valuation sensitivities to the AUD almond price is significant .
Now why would you sell is your next question, because the market is about relative value and one generally tries to by things with more than a 7% upside and worsening sentiment.
SHV has good NTA, but this can change based on medium term almond price and I stock out of favour can trade significantly below NTA ( AVG traded at less 50% of its NTA for years due to margin compression in the wine industry and MGX trades 38% below it current NTA which is mostly cash. a medium term price of 7 aud and a cost base of circa 5.50 ( excluding corporate costs will make margins thin, dividends fall drastically and cash flow reduce. changing the pace of LT growth without increasing leverage. Don't be fooled by the historic SP, Look at IO , oil gold, uranium and many other commodities to see what can happen to company margins and SPs. At a production cost of 5.50, and all in costs closer to 6 including corporate, margins at 7 will be very thin