Over 25-yrs in Global Materials & Soft Commodities

Charles Spencer

Equity Bottom-Up

We are adding <a href="https://www.smartkarma.com/entities/14292" target="_blank" data-smartkarma-citation="entities:14292:1">Select Harvests Ltd (SHV AU)</a> to a list of commodity shares that we believe have the potential to double within five years. Despite SHV's strong rally this past week, which was due to a jump in almond prices following frost in California, we would continue to buy and recommend holding on for much more upside in the years ahead.   Looking five years out we forecast a combination of strong volume growth, plus a modest recovery in pricing, to double Revenues towards A$500mn, drive Net Profits towards A$100mn and more than double the share price towards A$13/share.The risks appear mostly from a fade in the almond price rally, which would result in a continuation of SHV's weak current earnings and limited valuation support.

We are adding Select Harvests Ltd (SHV AU) to a list of commodity shares that we believe have the potential to double within five years. Despite SHV's strong rally this past week, which was due to a jump in almond prices following frost in California, we would continue to buy and recommend holding on for much more upside in the years ahead.   Looking five years out we forecast a combination of strong volume growth, plus a modest recovery in pricing, to double Revenues towards A$500mn, drive Net Profits towards A$100mn and more than double the share price towards A$13/share.The risks appear mostly from a fade in the almond price rally, which would result in a continuation of SHV's weak current earnings and limited valuation support.

Select Harvests Ltd: Pricing + Growth; Adding to Our List of Five Year Doubles

SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

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Long Term Returns of Temasek’s Major SGX-listed Investments

APAC Ex-Japan & China Corporates Analyst, Finsights Research

Nandini Vijayaraghavan, CFA

APAC Ex-Japan & China Corporates Analyst

Finsights Research

Our core competencies include counterparty analysis and credit rating of corporates, banks and government linked entities, debt structuring, credit risk management, and penning financial and investment research.

Counterparty & Credit Analysis

Thematic (Sector/Industry)

<blockquote class="">Blessed are those who can laugh at themselves, for they shall never cease to be amused.</blockquote> As an analyst, five analytical practices that are common place but need to be changed, in my view are<ul class=""><li>Focussing on accounting profits as opposed to cash flows</li><li>Inconsistent treatment of on-balance sheet and off-balance sheet debt</li><li>Deducting readily marketable inventory from debt, thereby under-stating financial leverage</li><li>Focussing on share of net income rather than dividends from associates and</li><li>Companies maintaining investment portfolios that are opaque and which often generate lower returns than that of the core business and weighted average cost of capital</li></ul>Read the unabridged insight for an analysis of and real-life examples of the above-mentioned issues.

Blessed are those who can laugh at themselves, for they shall never cease to be amused. As an analyst, five analytical practices that are common place but need to be changed, in my view areFocussing on accounting profits as opposed to cash flowsInconsistent treatment of on-balance sheet and off-balance sheet debtDeducting readily marketable inventory from debt, thereby under-stating financial leverageFocussing on share of net income rather than dividends from associates andCompanies maintaining investment portfolios that are opaque and which often generate lower returns than that of the core business and weighted average cost of capitalRead the unabridged insight for an analysis of and real-life examples of the above-mentioned issues.

Institutionalised Quirks for Analysts to Ponder

Equity Sectors Booked Gains Across the Board in October

10 Biggest US Exposure Plays Generated 35.6% YTD Weighted Returns

Singapore

Olam Group Ltd operates as a food and agri-business company. The Company supplies food ingredients, feed, fibre, and edible oil. Olam Group serves customers worldwide.

Through our purpose to ‘Re-imagine Global Agriculture and Food Systems’, Olam aims to address the many challenges involved in meeting the needs of a growing global population, while achieving positive impact for farming communities, our planet and all our stakeholders. 

Headquartered and listed in Singapore, Olam currently ranks among the top 30 largest primary listed companies in terms of market capitalisation on SGX-ST.

More information on Olam can be found at www.olamgroup.com. 
	 	 
Olam is located at 7 Straits View, Marina One East Tower #20-01, Singapore 018936. Telephone: +65 63394100, Facsimile: +65 63399755.

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Olam Group (OLG SP)

Select Harvests Ltd: Pricing + Growth; Adding to Our List of Five Year Doubles

We are adding Select Harvests Ltd (SHV AU) to a list of commodity shares that we believe have the potential to double within five years....

Charles Spencer

Long Term Returns of Temasek’s Major SGX-listed Investments

Singapore Exchange Ltd (SGX)

Institutionalised Quirks for Analysts to Ponder

Blessed are those who can laugh at themselves, for they shall never cease to be amused. As an analyst, five analytical practices that are common...

Nandini Vijayaraghavan, CFA

Equity Sectors Booked Gains Across the Board in October

Singapore Exchange Ltd (SGX)

10 Biggest US Exposure Plays Generated 35.6% YTD Weighted Returns

Singapore Exchange Ltd (SGX)

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