Ruralco Holdings Ltd

           RHL Dividend Details
 
Long term potential: The shares of Ruralco Holdings Ltd (ASX: RHL) delivered a negative year to date returns of over 1.42% (as at November 18, 2015). The full year highlights showcased sales revenue of $1.6 billion indicating an 18% increase over FY14’s revenue of $1.4 billion. RHL reported that it witnessed 19% rise in its gross profit of $307.0 million over prior corresponding period (pcp). The reported net profit after tax of $14.1million was a 33% increase and the underlying net profit after tax of $18.7million was a 15% increase on the pcp. Final dividend of 7 cents was slightly below 8 cents of FY14. 18% surge in underlying earnings before interest expense, tax and depreciation of $51.2million was another key factor. The impact from Total Eden led the water supplies gross profit surge by 83%.
 

FY 2015 performance (Source: Company Reports)
 
The group enhanced its market cap by six fold over the last ten years as well as diversified its presence in new sectors like grain marketing, water products and solutions, live export and financial services. The group’s sales revenue rose by 36% yoy to $742.8 million in the first half of 2015 as the group’s network expansion efforts paid off, while its gross profit rose by 30% yoy to $149.7 million. The expansion into new sectors coupled with existing sectors growth offset Chinese dairy market volatility and decreased first quarter Indonesian permit provisions. As per the company’s outlook, opportunities are expected to arise from the live export business scaling up to a two vessel model from January 2016 with the opening of new markets into China. Moreover, the group intends to leverage the demand for Australian agribusiness from Asia in the long term. Seasonal conditions in certain regions are going to affect cash flows of some farmers letting a drop in demand for inputs but at the same time falling Australian dollar would continue to drive the export of agricultural commodities. RHL estimates continued demand for its meat and livestock in the coming periods. The group has a decent dividend yield of 4.7% and based on the foregoing, we give a “BUY” recommendation on the stock at the current price of  $3.51
 
 
RHL Daily Chart (Source: Thomson Reuters)
 

Australian Agricultural Company Ltd

     AAC Details
 
Ongoing volumes and growth: Australian Agricultural Company Ltd (ASX: AAC) estimates an operating EBITDA in the range of $8 to $12 million during first half of 2016, against a loss of $8.4 million in 1H15. AAC reported that it witnessed a better meat sales prices and volumes during the period from prior corresponding period. Livingstone Beef improved daily throughput which would further enhance the group’s performance during the period. Rising Australian Agricultural company’s produced cattle enhanced the group’s overall supply chain performance as well, wherein the Grassfed to Grainfed & Northern Beef generated more than 150% surge.
 

Improving performance (Source: Company Reports)
 
The shares of Australian Agricultural Company surged over 3.96% in the last four weeks (as of November 18, 2015), despite falling over 1.70% during this year to date. We believe the stock has the potential to deliver further growth, given the ongoing rise in beef volumes and prices which would enhance its earnings. Investors looking for high potential stocks at bargain prices can consider adding AAC in their portfolio. We give a “BUY” recommendation for the stock at the current price of $1.49
 
 

 

Webster Ltd

WBA Dividend Details
 
Bargain Opportunity: Webster Limited (ASX: WBA) recently reported a weak walnut operating business and estimates its walnut yields decrease by over 20% during 2016 as compared to FY15. Therefore, the shares of Webster plunged over 12.41% in the last four weeks alone (as of November 18, 2015). On the other hand, the group harvested over 3,100 hectares of irrigated summer crop at Kooba which delivered solid cotton and corn yields. The group estimates cotton production of >100,000 bales and already implemented a forward sales of 40% of budgeted production at major premiums.
 

Webster Agriculture Locations (Source: Company Reports)
 
WBA estimates its NPAT in FY16 to be in line with FY15 performance. We believe that the recent correction in the stock placed it at reasonable levels and this may be considered as a bargain opportunity given WBA’s internal efforts to sustain growth. Based on the foregoing, we give a “BUY” recommendation at the current stock price of  $1.22
 
 
WBA Daily Chart (Source: Thomson Reuters)
 

Rural Funds Group

       RFF Dividend Details
 
Boosting capital position: Rural Funds Group (ASX: RFF) reported an entitlement offer of 2 new units for every 13 existing units at an issue price of $1.10 per new unit for over 20.37 million units. Accordingly, the group estimates to receive gross proceeds of over $22.4 million and intends to divert these funds to buy Kerarbury and Kamelda properties and water entitlements. Moreover, the group’s debt facilities would be drawn to offer funding for the almond orchard development. Meanwhile, the group developed a solid portfolio of agricultural assets having an adjusted total asset value of $262 million (based on FY15 annual report) and a weighted average term of 12.2 years, which generated an investment yield of 7.8%, as per the year-end unit price of $1.10 during FY15.
 

Assets and Counterparts (Source: Company Reports)
 
The group is continuously building its portfolio and acquired Tocabil Station at Hillston, NSW as well as made a 22 year lease agreement with Olam Orchards Australia. Accordingly, the development of a 600 hectare almond orchard by Olam on Tocabil would transform a $5.2 million mixed farm into a $32.1 million almond, cropping and grazing asset. The group also improved its distribution growth estimates to 4% per annum in FY16, as compared to earlier 3% per annum estimates. Accordingly, the shares of RFF generated a year to date returns of over 31.47% and rallied 1.95% in the last four weeks alone (as of November 18, 2015). Still the stock is trading at reasonable valuation with outstanding dividend yield. We give a “BUY” recommendation on the stock at the current stock price of  $1.30
 
 

---

Disclaimer
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people.Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376).The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation.Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product.The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.
Copyright
Copyright © 2014 Kalkine Pty Ltd ABN 34 154 808 312. No part of this website, or its content, may be reproduced in any form without the prior consent of Kalkine Pty Ltd.
Kalkine is a trading name of Kalkine Pty Ltd ABN 34 154 808 312, which holds Australian Financial Services Licence No. 425376.