Shares in ‘fruit and veg’ company Costa Group Holdings Ltd (ASX: CGC) are stuck in a trading halt pending an announcement.
About Costa Group
Costa is one of Australia’s largest horticulture and fresh produce suppliers; selling avocados, citrus, blueberries, mushrooms and tomatoes to the likes of Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Aldi.
In all, 80% of Costa’s profits are from the sales of fruit and vegetables, with the balance derived from logistics and international licensing agreements (blueberries).
Today’s Announcement
Costa has requested the ASX to place its shares in a ‘trading halt‘ as it is going to make an announcement in respect of its trading outlook.
The Rask video below explains what a sharemarket trading halt is:
While the company is yet to provide any details, it also said in this morning’s announcement it “expects to be in a position to make an announcement before the commencement of trading on Wednesday 23 October 2019.”
While I am completely speculating, my guess is that this will not be a positive update for shareholders. I say that because Costa has downgraded earnings guidance twice in the last 12 months (first in January this year and then again in May
), and while there is no news yet, typically, when a company places its shares in trading halt pending a trading update, it is not good news for shareholders.
It could well be a risky scenario for investors, and Costa is an agricultural company with a little too much debt for my liking.
What Now?
Not much. Investors can’t do anything whilst the shares are in a trading halt, so it’s wait and see. In the meantime, while you are waiting, you might want to have a look at one of the more reliable companies in the free report below.
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At the time of writing, David does not have a financial interest in any of the companies mentioned.
