Agree about the undervaluation, however to say the price is
slipping due to a slowdown in the chemical
cycle does nothing to
address the issue of the effect of foot and mouth
disease in europe.
Nufarm
has a number of operations in europe, most of the chemicals
are used in the rural sector, with farms being
heavy users. Given that the
countryside in the u.k and possibly soon
europe/already? are virtual
no go areas surely there will be a big drop in
sales of fertilisers etc.
The industrial
chemical division, will probably not be effected
by foot and mouth, but the crop protection
buisnesses will be, and it is
crop protection which gives nufarm most of its
profit.
On the plus side nufarm is a worldwide buisness, is growing
nicely
and foot and mouth will not last forever. If i
wasnt already overweight in nufarm
shares i would be seriously looking at snapping
some up once the price stops
falling.
nick
The stock closed Friday at
$2.90. Why so cheap? Because of the current slowdown in the chemical cycle..
This variable will undoubtedly reverse. They always have. That's why
$2.90 a share is cheap for a stock with an intrinsic value of $8 to $9.
Cheers
Peter
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