The Select Harvests Limited (ASX: SHV) share price is up 5% after making a positive ASX announcement.
Select Harvests describes itself as a fully integrated almond business consisting of orchards (owned, leased, joint venture and managed), primary processing (hulling & shelling), secondary processing (blanching, roasting, slicing, dicing, meal), trading and consumer products (it provides the almonds for Lucky, Sunsol, Soland, NuVitality, Renshaw & Allinga Farms, as well as providing retail brands.
Why Investors Are Going Nuts For Select Harvest
Select Harvest announced that the almond producer’s 2019 harvest was completed late last week.
The ideal growing and dry harvesting conditions, new technology and improved horticultural practices have resulted in a relatively high-quality crop.
Select Harvest also said that the introduction of new processing technology has resulted in improved productivity in both the orchards and the Carina West processing facility.
The current high water prices and availability show that the decision for the company to purchase in advance all of its water requirements for this year’s crop has been prudent.
Select Harvests also said that its decision to invest in frost fans has had a very positive impact on volumes compared to last year when similar weather conditions were occurring.
Management said that 48% of the crop has already been processed with the company’s yield being at least 10% higher than industry benchmark volumes.
More than 60% of Select Harvests’ crop has been committed to sale and over 72% has been hedged to the US dollar, the FY19 average sale price is expected to be between $8.40 to $8.70 per kilo.
Select Harvests Managing Director Paul Thompson said: “It is always a bonus to have harvest completed before the Autumn rains…It is very pleasing to begin to see the benefits of our investments reflected in both our yield, crop quality and ultimately our financial returns.”
Whilst this is very pleasing news for Select Harvest, I think it’s better to invest in commodity businesses when they are at a low point, such as a couple of years ago. I would rather choose one of the rapid growth shares in the free report below at the current share prices.
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