MARC HASENFUSS: Not chicken feed
The relentless focus on costs, production efficiencies, cash flow generation and gaining market share makes Astral a really tough old bird
Shares in Astral Foods, the "big bird" of the JSE’s food sector, have already soared, eagle-like, boosted by a series of uplifting trading updates. Of course, Astral — which is headed by the unflappable Chris Schutte — is a different beast to the market’s other poultry producers. The relentless focus on costs, production efficiencies, cash flow generation and gaining market share makes Astral a really tough old bird, and this might make long-term investors less fretful about the inevitable downturn in the poultry cycle. I imagine there are many punters morbidly reassessing why they did not pick upast ral shares a year ago at about R150/share (they now trade at about R315). In early 2016, the shares even ducked under R100. Those investors hoping they might get a second bite at sumptuous poultry sector profits by buying into smaller commodity player Quantum Foods have probably left it a little late too — though the value proposition, on paper, remains fairly compelling. Quantum skitte...
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