Summary
The fund managers believe that Elders Ltd has experienced significant volatility in its share price, currently around $6.63. In their opinion, the company's recent earnings downgrades stem from poor crop outlooks and declining livestock prices, which have negatively impacted profits. However, they note that recent acquisitions and business investments have shown promise, with strong seasonal conditions potentially supporting a return to the upper end of FY24 guidance. As Elders holds a dominant position in rural Australia, its vertical integration strategies and strong balance sheet provide a foundation for future growth. Despite recent challenges, the managers see potential for Elders to recover towards its mid-cycle value above $10, especially if weather conditions stabilize. They emphasize that unpredictable variables could continue to affect sales, but overall, the outlook remains cautiously optimistic for FY25 and beyond.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Source: Trading View
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Commentary From The Managers
Centennial Asset Management
18 July 2025
$6.63
Summary
- Centennial Asset Management notes that Elders has faced significant challenges recently, including a poor performance over the years.
- To maintain growth, Elders has had to acquire businesses, leading to declining returns.
- Adverse climate conditions have further impacted the company, with northern Australia experiencing excessive wetness and southern Australia being too dry.
- However, there are signs of improvement as northern Australia is starting to dry out, and southern regions have received some beneficial rainfall.
- This rain is significant for Elders, who operates in sectors such as livestock, financing, grains, and fertilizers.
- Additionally, real estate prices may benefit from increased rainfall and lower interest rates, potentially enhancing valuations for rural properties.
- Overall, Centennial Asset Management continues to hold their position in Elders due to these evolving conditions.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
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Commentary From The Managers
Centennial Asset Management
18 July 2025
$6.63
Summary
- Centennial Asset Management notes that Elders has faced significant challenges recently, including a poor performance over the years.
- To maintain growth, Elders has had to acquire businesses, leading to declining returns.
- Adverse climate conditions have further impacted the company, with northern Australia experiencing excessive wetness and southern Australia being too dry.
- However, there are signs of improvement as northern Australia is starting to dry out, and southern regions have received some beneficial rainfall.
- This rain is significant for Elders, who operates in sectors such as livestock, financing, grains, and fertilizers.
- Additionally, real estate prices may benefit from increased rainfall and lower interest rates, potentially enhancing valuations for rural properties.
- Overall, Centennial Asset Management continues to hold their position in Elders due to these evolving conditions.
Ausbil
31 July 2024
$9.37
Summary
- Elders (ELD) returned +16.7% for the month
- Strong seasonal conditions have underpinned a sharp turnaround in earnings momentum
- Recent acquisitions are performing better than expected
- Business investment and stronger YoY trends in livestock support ELD's growth
- Elders is positioned to hit the upper end of its FY24 guidance range
- Positive outlook for strong growth into FY25 and beyond
- Strong balance sheet and accretive M&A present upside to base-case earnings assumptions
Blackwattle Investment Partners
30 Apr 2024
$8.36
Summary
- Blackwattle Investment Partners continues to hold their position in Elders Ltd despite a recent 10% share price drop due to lowered FY24 earnings expectations.
- The initial investment was made in October last year when the Bureau of Meteorology's incorrect El Nino prediction led to a significant discount to intrinsic value.
- The BOM's subsequent reversal of its prediction acted as a catalyst for Elders' share price re-rating towards its typical midcycle valuation range.
- The recent earnings downgrade is attributed to lost sales from September, where farmers reacted to the BOM's incorrect guidance.
- Blackwattle expects the Elders share price to recover and track back towards its mid-cycle value, projected to be above $10.
- Elders is characterized as the 'Bunnings of the Bush', benefiting from its dominance in rural Australia and effective vertical integration strategies.
- The company is supported by top-tier management, enhancing its long-term growth prospects.
Oracle Advisory Group
31 Dec 2023
$7.39
Summary
- Oracle Advisory Group sold their investment due to recent deterioration in Elders’ main business segments.
- The crop outlook for the summer is poor, impacting expected revenue.
- There has been a notable decline in crop protection sales.
- Lower cattle and sheep prices have further affected profitability.
- Numerous unpredictable variables are influencing Elders’ sales performance.
- As a result, Oracle Advisory Group decided to move on from this position.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who has invested in Elders Ltd (ASX:ELD)?
Fund managers including Blackwattle Investment Partners, Ausbil, Oracle Advisory Group and Centennial Asset Management have invested in Elders Ltd (ASX:ELD).
Why have investment managers invested in Elders Ltd (ASX:ELD)?
Fund managers have invested in Elders Ltd due to its strong market position and growth potential in rural Australia. Despite recent challenges, including a share price drop and downgrades in earnings expectations, the company is viewed as fundamentally undervalued. Blackwattle Investment Partners highlighted that Elders' shares traded at a discount following incorrect weather predictions, which are expected to normalize, pushing prices back towards intrinsic value. Ausbil noted a recent turnaround in earnings momentum, supported by strong seasonal conditions and better-than-expected performance from acquisitions, positioning Elders for growth in FY25. Additionally, Centennial Asset Management pointed out the company's diverse operations in livestock, financing, and real estate, which can benefit from improving weather conditions and lower interest rates. Overall, fund managers see Elders as a quality business with significant upside potential.
What happened to Elders Ltd (ASX:ELD)?
In a recent webinar around July 2025, Centennial Asset Management discussed their investment in Elders Ltd, noting the company's challenging performance with a share price of approximately $6.63. They highlighted that Elders has struggled with declining returns and the need for acquisitions to sustain growth. The fund manager pointed out the adverse climate conditions affecting the company, with northern Australia experiencing excessive wetness and southern Australia too dry. However, they acknowledged a slight improvement in weather patterns, which could benefit Elders' operations in livestock, grains, and real estate, particularly with lower interest rates potentially boosting rural property valuations.