The black soil of Ukraine still manages to give large harvests despite of wars, debts and inflation. To buy a Ukrainian agricultural and logistics company in the middle of a war was, in a way, an experiment to see if the investor fears were justified. I know that the only way for me to follow a company properly is to step in as a shareholder otherwise it would have been more clever to not do so and only to kep the data from an imaginary investment made.
I must however admit that in the last month or so... looking at the value I have invested I get a bit concerned regarding my own rationality. I mean... I had back then double the amount of money invested in Kernel as I had in MüRe, a solid German DAX company with low P/E and high dividend payments, and that is to be very frank not ok. It must be the inverse.
I have been thinking about how to deal with those matters that appears, almost exclusively, due to a share price drop, in one of my less solid companies, followed by an additional investment from me. When the share price then gets more stable again the invested amount is simply out of proportion.
Should one then sell off part of the investment in the less solid companies (for instance down to my favoured 2k €) and rebalance what comes out into the solid ones such as MüRe? In this situation I would then get out 3.8k € to rebalance and for my 2k € left in Kernel I would have a substantially lower share price in comparison to my initial investment that was made at 13.90 € and now I got, due to my additional investments, 8.52 € per share on average.
Anyway, those are the kind of thoughts circulating in my mind at the moment and I am very uncertain what to do because to sell off part of my holding would be like removing petals from my blooming flower and I think I would be annoyed with the gaps but I do not know because I have never sold off parts before.
Previously I thought that I would be disturbed if I bought more shares in companies where the share price had increased from my initial investment. I have now done exactly that with Talanx, Tessenderlo and MüRe without being disturbed so that "mental barrier" was obviously bunk and so maybe the petal flower thing will also be bunk...
Sorry for the delay and now we go back to the real business!
For the report in full please go here and to see my previous summary then click on Kernel operating report Q3 2015 and please click on analysis of Kernel 2014 to find out more about them.
The only graphic to show is the one below which shows very nice results for the full year. 12% more grain, 12% more bulk sunflower oil and 5% more bottled sunflower oil. The rest of the things have insignificant importance for the revenue. It will boil down to two things now and that is currency effects (which I always thought would be positive but that was not the case in the half year report with -73 million USD due to this reason, Kernel report Q2 2015) and the second is the world prices for grain and sunflower oil.
Conclusion: I am fairly certain that the full year for Kernel will this time show an acceptable profit based on the earnings as they were reported in Q2 and now here with these fully acceptable volume sales. What is maybe not so good is that the grain sales are getting flat and that has been the large driver of increased revenue for the last couple of years so something need to change to keep increasing the revenue even though I would take increased yearly earnings any time compared to increased yearly revenue. To give a face to the option it would be like picking IBM or Amazon. I will remain as a shareholder in Kernel and I will keep thinking about the petals.
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