Thanks for the broker report. I hadn’t seen it. Coincidentally it came out the same month I bought into the company.
It highlights some of the positives that have caught my eye, eg. management now has a clear focus.
It estimates EBIT of $7.9m in 2014, so my very rough EBIT estimate of ~$9m in 2015 (just from walnuts) might be somewhere in the right ballpark.
I agree with all you say about management. It is the major wild card in all this.
> “Would like to see a lot of skin in the game from MD and CFO.”
I agree. Why don’t they do this I wonder? Even issue themselves some out of the money options, exercisable at say 60c in 2015.
So WBA is far from a risk-free investment — untested management, uncertainty over walnut prices, water prices, $A, walnut blight etc.
Not risk free, but I think value for money for those who can tolerate some risk and uncertainty.
Above all else, what strikes me is just how much better placed this company is now compared to 18 months ago. As you and the broker’s report say, it’s now in control of its own destiny, having shaken off the all-too-heavy influence of Gunns and Tassal.
Art
WBA Price at posting:
46.9¢ Sentiment: LT Buy Disclosure: Held
