ABB just announced the grain receivals for the season and they yet again were a record. ABB early last month also released their profit results for the year and despite the drought conditions they came in much better than expected.
ABB is not a short term stock and has been unloved by institutions to say the least but they have just announced a record grain receivals for this season we can expect a very healthy profit out come for this coming year. Unfortunatly no one seems to like AG companies no matter how well they are run.
Even when looking at the ratios ABB when compared to the AWB for this years numbers looks good. ABB asset backing per share is about twice what the AWB has. On a P/E ratio AWB is 28.1 .... ABB is 17.5. I expect ABB to be supported and gradually grind up over time above the $6.50 level. You have to compare ABB to AWB as they essentially in the same business ... different grain but the rest is the same. The relationship between their price has to be the same when looking at say the ASX to the SFE. Also any future merge or takeover has to be viewed in the same manner.
Given that we have had a rapid rise, it would maybe better to wait for a dip on this stock ... however when it was obvious the crop prospects looked good in Jul Aug with widespread rains ... the stock didn't take much notice. One was able to pick up the stock for $3.50 despite improved in conditions. They announced much better than expected half yearly results and the stock really didn't react. It goes on and on .....
As you can see it is thinly traded especially when compared to the AWB ... maybe wait for some correction given the lack of liquidity in this stock .... but I think certainly the outlook for 2004 is good. One must also remember most of the shareholders in the company are grain growers.
Be careful ... do your own research ...
Many unloved companies in the past have had stellar runs. I dont expect ABB to double but another 20 % ++ could be there over coming months. It however has run a long way so be careful ... stop loss and buy on dips.
Some unloved companies we have discussed on HC at length in the long distant past are CEY,RIC,SFE,CTX,COA ... all solid companies who a few years ago were unloved.
CEY from 50 cents to $2.80 in 3 1/2 years COA from 90 cents to $3.11 in 2 1/2 years CTX from $1- to $5- in 2 1/2 years RIC and SFE both over double in less than 2 years
One thing in common with all these companies ... they were well run ... most were profitable at the time they started their rallies and most also paid a dividend.
They are unlike 99 % of the companies discussed on HC ... most are at best purely spec .... maybe the pay off if you pick the right one ... HDR yep if you got in and out ... but the share price was 60 cents in HDR 12 months ago. We must have had 5,000 posts HDR this HDR that in the last month ... yes it has been exciting HDR up 50% in the month ... wonder how many posts on ABB in the last month ??? I shall check.
Sorry small gripe ... as to the rest of the worthless mining stocks or tiny tech or tiny oil stocks mentioned at length on HC what can one say.
Have fun
For ASIC please presume I hold a direct or indirect interest in all the companies mentioned ... except RIC ... past tense.
ABB Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
