MM’s thoughts on Elders (ELD) please
Hi James. Thank you for your insight. I like to increase my exposure to food and agricultural stocks. Please comment on the recent price action of ELD. On Friday's price would MM buy hold sell or avoid Elders!
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Answer
Hi John,
Elders is a favourite with many pundits at present but it keeps slipping lower having fallen well over 40% from its mid 2022 high. We wrote the below on the 8th of February:”
“Market perception is that Ag is very strong, and ELD is leveraged to that strength, a view that was being pushed by their Chairman at the end of last year, however, they’re now suggesting some weak undercurrents are at play, with potential margin pressure in generic crop protection commodities which may impact near-term earnings & livestock prices off 10-15%. When the market is bullish and long a stock and there is a shift in tone from the company, selling can be quiet aggressive, which is what we’ve seen in recent sessions.”
We don’t mind ELD into weakness but at this stage it would be scaled in buying as we still feel the markets “long & wrong” from higher levels i.e. further downside spikes cannot be discounted. They also need a CEO, and this search is still going. One that we like but see no need to rush in a buy just yet.
