BUY HOLD SELL – Elders (ASX: ELD)
Elders (ELD) plummeted on the release of results on November 14 (Monday). Down 22.9% on the day of the release. Henry bought it as a trade feeling the sell-off was overdone in the short term.
Some bullet points:
- Announced the retirement of their long-time CEO next year, who has been a mainstay for the company for over a decade.
- Sales increased 35% to $3.4bn.
- Underlying EBIT increased 23% to $232.1m missing brokers’ forecasts causing the stock price to drop.
- Outlook remained positive with favourable trading conditions expected to continue with high demand in the first half of FY23.
- Short term the recent extreme rainfall across the eastern states has created uncertainty in the affected regions and may not yield a full harvest.
- Strong demand in chemicals and fertiliser is expected to continue.
- Cattle and Sheep prices are expected to soften in the medium term.
- Wool demand remains strong from China and other Asian nations.
- Elders Board Chair has commented that “Australian agriculture is in a strong position. Good seasonal conditions, strong commodity prices, and record demand for Australian agricultural products are all contributing to a very favourable production environment and a sense of confidence and excitement for the years ahead”.