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Gold/Mining/Energy : SASKATCHEWAN WHEAT POOL ( SWP.B - TSE )
SWP 28.22-0.3%Oct 31 9:30 AM EST
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To: Triden who wrote (23)8/30/1998 9:10:00 PM
From: Glen McGlaughlin  Read Replies (2) of 47
 
Hi to all SWP enthusiasts.Comments made by yourself and Marcman have a lot of validity.I personally would not buy SWP until you see 4th qtr results which I predict will be down sharply from last year for the following reasons:
1. Grains volumes for fiscal 97/98 ending July 31/98 will be down at least 10% for SWP and the last qtr (4th) will see an even sharper decine because most of the grain was already moved into the system by the end of the 3rd qtr.(SWP still reported a net loss of $800,000 in the 3rd qtr).
2.New competitors arrived on the scene in 97/98 such as ConAgra and producer owned terminals at Moosimin and Watrous.These operators will further encroach on SWP's traditional market share.
3.Farm supply sales are showing much smaller margins,again due to competitive pressures.
4.The POOLS ambitious capital growth strategy in large terminals,hog production units etc is not likely going to show any bottom line in 97/98 since some of the elevators were still under construction at year-end.

For these reasons I an still not overly bullish on SWP even at $14,however if your time horizon is 2-3 years,$14 will look like a smart buy.
BOTTOM LINE : Watch for 4th qtr results which should be released the week of Sept 21-we could see a modest sell-off if earnings drop below $30 million. That may create a brief window in the $13 range which certainly would be an attractive point to get in or add to your position.

Just my personal opinion and nothing more!

GRM
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