"Friday evening, country pub, four mates. We're talking about sporting injuries, teenage kids, whether we'll ever see our cheekbones again, that kind of thing. There's a farmer at the bar telling his mates how he's getting twenty, thirty pounds ..."
Present margins in the feed division seem nearer 1%!The retail,agricultural supplies & pets, business makes nearer 5% net.Making around 2% overall.
Falling prices of raw materials for feed probably impact on margins because in a highly competitive market Wynnstay has to cut its own prices before its own more expensive raw materials has worked through the system.Hopefully we will see a modest recovery to 2%!
I have held an investment here since 2004 at a sub £2 purchase price.I sold about a third at a higher price than presently;I agree it was probably over valued.It represents about 2% of my equity portfolio and will retain for the present as I think it is a decent business but I agree present growth prospects are limited.
I have to say I strongly disagree with you. I found it a very lightweight article of little merit.
You however raise some good points. All commodity companies carry some risk and the biggest risks are volatility and falling demand. Low milk prices have meant that farmers have been reducing their input costs. This has resulted in demand for compound feed probably falling by 10% this year as farmers switch to straights and forage (pasture and silage). At the same time the cost of components for compound feed such as soya and milling wheat have been volatile making compound feed even less attractive to cash-strapped farmers.
Even the retail shops face the same pressures as the high street as farmers can order over the internet. I'd agree that Wynnstay does have some natural resilience but like NWF and Carr's Group it needs a steady flow of acquisitions to generate any growth. Bombproof may just be a euphemism for dull with limited growth prospects.
I would recommend reading Richard Beddard's (Share Sleuth) excellent article on Wynnstay published on this site on 8th July.
As usual, I agree with most of Richard's opinions but I wonder if the suggestion that the business is "virtually bomb proof" is just a little over the top. As Richard shows, management has done an excellent job in making the company as resilient as possible but I wonder if any company with an operating margin of around 2% can be regarded as virtually bomb-proof as this type of margin does not allow much room for error or just bad luck. The uninspiring return on capital employed (under 10% for the past couple of years) may reflect this low operating margin. The article also suggests that 55% of farmers' incomes may come from subsidies and that Brexit might have an impact on this. My guess is that Brexit may well be significant since the EU has a reputation of being very generous with its subsidies for farmers, so I do not believe that Brexit will help Wynnstay's already anaemic prospects for profit growth. My opinion is that Wynnstay is, intrinsically, not a virtually bomb-proof company but would agree that management is doing a good job.
Read VSA Capital's note on WYNNSTAY GROUP, out this morning, by visiting https://www.research-tree.com/company/GB0034212331
"With extremely tough conditions across the UK agricultural sector at the moment, this month we took the opportunity to visit some of the operations of one of the UK-listed agricultural input companies at the centre of the storm, Wynnstay Group (WYN LN)...."
"Steadyish growth in profit has earned Wynnstay a reliable reputation. A closer look at the numbers reinforces it. This is going to be a fairly speculative post, as I havenât yet read Wynnstayâs older annual reports. Iâve just sucked the data out ..."
It is a very good business but the farming market is fairly tough at the moment so probably best not to make a major purchase until you see how the market fairs.I have a reasonable size holding by my standards but it was in the main bought around 11 years ago so stand me at a much lower price.
Its competitors NWF & Carr's are also good companies-oddly the only three market listed farm supplies business cover over lapping areas.I am also have been a shareholder in NWF for many years and admit not buying Carr's was mistake esp as I live in Cumbria....
You will find details on the company website.For the record around 1% of the shares are owned by Directors,about 50%+ owned by local farmers/customers in its area of operation(it was a farmers Co-op for the first 75 years of its life until early 1990s when it became a PLC first listed on OFEX/Plus Markets before moving to AIM),around 25% owned by larger institutions/funds,the remaining 20% or so owned by unconnected private investors,smaller institutional holders,employees etc.
Decent performance especially as core market is difficult at the moment:I don't see any obvious reason for an increase in share price which reflects the present value at the moment but this is a very good business with excellent prospects and I am happy to stay invested in companies like Wynnstay.
Another sound performance,present low milk prices perhaps a concern if they persist for the dairy related business.Otherwise business in this well diversified company seems good.
Shares are probably not cheap @ PE of around 15 & lowish yield but this is a quality company and will continue to hold.
Shorting a rising stock....is much worse when it is done by your resident posters that seemingly are your buddies and convince 'long' holders to give up!
What many pi's fail to grasp is the extent that shorting is taking place. Often we tend to think that the 'shorter' is done with and we expect the stock to now rise, now that 'he' is out of the way? You'd be wrong in many instances, for 'he' the shorter, is often followed by others that 'help' keep the stock down !
Some stocks fall after GOOD NEWS! ....IS it just normal levels of profit taking? Yes, imo....
...BUT the underlying reason for many pi's taking early profits, is simply they are afraid they'll be left in paper losses!
Thus, if the stock, after 'good news' is then shorted, then kiss good bye to this stock reaching new highs in the very near term!
We can't both WIN !
The 'shorts' therefore 'win' their bets, whereas the 'longs' lose the best part of their investment, possibly for some time to come......and just when you thought this couldn't go any lower, THEY'LL SHORT THE STOCK AGAIN !
Why is this? They both can't win...the money has to come from somewhere?
Thanks for all your support. We are now at 4,378 votes!
AND SOARING !
(that's A LOT of irate investors!)
Investors are saying something? They are voting in their thousands !
Bookmark the links if you wish to 'pass the LINK/s on'.... or read later?
BE A PART OF IT
# The big problem with shorting is that THEY (the shorters) WOULD most likely lose most of their money IF they just 'bet' on the price going down without trying to 'help' it down?
So, there is the 'catch 22' scenario. No one would know of an RNS to be released that will contain BAD NEWS, if they did and then 'shorted' the stock, then they are guilty of 'insider trading'.
The only sure way to short a stock and WIN is to spread dis-information to defame the company with help from other posters that are in concert with them. To ENSURE that they don't lose the biggest part of their 'short', ironically, then, they must deramp with (seemingly) believable posts.
When the pro's do it, they simply get the media or well known 'crooked' tipsters, analysts or brokers to do it for them. (say no more). .They're all in cahoots with each other!
The campaign against shorting is for the benefit of the 'cheated' investors that cannot control their investments due to the dirty tricks played out by co-ordinated deramping in order to tank the sp to abnormally low levels.
When the campaign is complete, the results will be reviewed by Govt legislators re- further action! The branch of the FSA ie FCA will be asked by Davide Serra to conduct an investigation into short selling practices, with the view to either:- an outright ban on short selling, or at the very least to be better and more vigorously regulated !
The HMGovt epetition is a regulated and monitored site with legal authority that will NOT under any circumstances allow any auspicious individuals to prevent 'others' from casting their free votes. Discussions of which are freely entered into with individual viewpoints.
My impression of this company is that its diverse business units are each hostage to fortune to either the weather or commodity prices but, when blended together, produce financial results which have shown steady growth. However, I reckon the current extended period of cold weather will provide a challenge even to Wynnstay as it must surely hit the company's country store business and, to a lesser extent, the pet products business, both of which provide a significant contribution to profits. I heard an interview on Radio 4 yesterday in which a garden centre owner was talking about a 50% fall in what he would normally expect from "outside" sales since the start of the calendar year owing to the cold weather, although the inside cafe was still doing well. I know that Wynnstay country stores are not garden centres but I guess bad weather would tend to reduce footfall for all rural stores. At least the currently high animal feed prices should safeguard margins on that side of the business and I wait with interest for the next set of results which I have a feeling might be a bit worse that the market currently expects, perhaps explaining the ongoing share price adjustment. However, I think the company is a good long term bet and anticipate becoming a shareholder soon.
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