yes a lot of coincidences.But ultimately the price btw then and now is rags to riches story.If we keep our horizons a bit longer chances of losing money is negligible with a caveat of course that the company bounes back on performance.This market also is a interesting place.Underdogs like ICICI and Axis get 10% bumped up after declaring horrendous results and for cases like Avanti etc expectation is very high which eventually leads to disappointment.Ultimately we need to rely on earnings and some luck. But it could be volatile.
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This is bad news for the sector… would be eager to hear what some of the indian shrimp exporters have to say on this…
Nice observation, thanks for the great work !
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But the context as to y avanti fell down 50% should not be forgotten…chennai was badly hit by floods, nellore where waterbase is headquartered was hit badly… WB went on and announced that they had to incur loss of inventory + repair of fixed assets of around 18cr… So markets perceived a bad result from avanti too and that is y avanto shares went down by 50%… But avanti came back with a strong q3… Just putting things into perspective thats all
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Its on 26 May.
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The current collapse of farmed shrimp prices doesn’t surprise me, but it does shock me how much greed and how little common sense there is in an industry whose only chance to thrive in the future is with sustainable practices.
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Please paste the article
Shrimp prices are down but US exports from India up approx 25% YOY by volume from Jan-Mar 2018. Will it compensate for the lower prices. Seniors please share your views, Stock has corrected almost 30 % from all time highs. What will be the impact of the lower prices on industry in longer term.
Hope it wont turn out to be another Kaveri seeds for me.
Disc : Invested since last 4 years. ( 20% value of current portfolio)
@Rohitsharma - not invested in the stock though I have been studying it for some time. This is a cyclical industry and we are probably near the top of the cycle, going by most of the posts there seems to be a supply overhang and prices are correcting. To what extent they will correct one cannot say at this moment but these are clear negatives for the stock, which considering the industry it is in, is not cheaply priced at around 20PE.
On the positive side while industry is cyclical it is different from other commoditised industries in the sense that a lot of the capacity will be swing capacity, if price is not remunerative the farmer will just drop off shrimp and move to something else, so demand supply correction to my mind will happen faster than say it would happen in cyclicals like metals. Also since these guys are more into feed both the volume demand & the price will be less volatile than final product of shrimps. Also long term competitive structure and demand scenario are in favour of Indian companies and this is the best one of the lot.
Fundamentals aside, markets this year are going to be volatile with mid and small caps bearing the brunt of it. Since you invested 4 years ago, you are sitting on healthy profits, may be prudent to book some, with the option to re-enter at lower levels.
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Thanks for sharing your views. I will try to book some profits. I did the same mistake in kaveri seeds few years back(due to greed or may be I am not an expert in analysis). It fell down 60-70% from Highs and I came into losses while I was in huge profit. Selling a stock is more difficult than buying.
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I think too much analysis is being done on shrimp cycles and its effect on avanti. Avanti is a business led by capable promoters. There are statements that they would like to diversify into newer products like sea bass. So trust the promoters to take care of their business and create value.
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Well said rkoti… Avantis balance sheet, cash flows and business agility is far too big… People can try to time their entry and exit… I am reminded of WB quote… “The stock market is a place where wealth is transferred from impatient to patient investors”…
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Avanti share price struggled similar way in 2016 after split (face value Rs.10 to Rs.2). Later share price appreciated > 5x in no time. Avanti always reacted very strong for all bad/tough situations.
Disc: I am investor in AF for last 4 years and adding on every dip
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Yeah , but after that it showed v good earnings growth. If they can show similar set of earnings this time , stock is trading cheap. In the end , its always earnings which matter.
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There is a base effect in Avanti. That kind of growth is not perpetual.
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