Wheat futures in the US fell toward the $6.2 per bushel mark, heading toward the two-year low of $6 touched on May 2nd amid renewed expectations of abundant supply among the world’s top producers. After a long period of uncertainty, Turkish President Erdogan stated that Russia will extend the deal guaranteeing grain exports out of Ukrainian Black Sea ports for 60 days. Such developments will preserve Ukraine’s access to key foreign markets and increase price competition with other major producers. Adding to the bearish pressure, the USDA forecasted a drop in global demand for the upcoming marketing year due to lower feed and residual usage. Still, the body downgraded production from Russia and Ukraine due to the impact of the war between both countries, while lower yields pressured output forecasts in Australia.
Wheat feedstock price have tumbling, but due to forward contract, Mflour still unable to benefit from low input cost, lag time factor. The low input cost will likely only able to capitalize in next Q, widening profit margin.
Mflour just alike cement maker despite increase selling price but still only able to fetch small profit margin due to high input cost Mflour (wheat price) and for Cement (coal price). Recent Cement post leap up profit margin due to tumbling in coal price, its matter of time due for Mflour to post leap up profit margin due to tumbling in wheat price
Buy if you can afford it. Two points people missed - 1. Comparative earnings 2. Net Tangible Assets this quarter
Look at the earnings and compare. As for NTA, here is a simple explanation:
NTA refers to the total value of a company's tangible assets minus its liabilities. Tangible assets are physical assets that can be seen, touched, or measured and include items such as buildings, machinery, equipment, inventory, and land. Liabilities encompass the company's debts and obligations.
To calculate NTA, you subtract the total liabilities from the total tangible assets. The resulting figure represents the net value of the company's tangible assets after deducting its obligations. NTA provides insight into the tangible worth of a company and is often used in financial analysis and valuation.
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....