Fund Manager Summary on Select Harvests Ltd (ASX:SHV)
Select Harvests Ltd (ASX:SHV) has garnered a consensus view suggesting a positive outlook amid improving market fundamentals, despite recent share price volatility. Fund managers highlight that while Select Harvest's almond prices are projected to rise, driven by strong global demand and tightening supply—particularly from the US—the company faces near-term challenges, including frost damage impacting crop volumes and rising input costs. The company's recent refinancing and balanced operations position it well for the future, with decreased net debt and improved processing capabilities boosting profitability. With a target price suggesting potential upside, managed production levels, a favorable cost position compared to competitors, and strategic initiatives aimed at enhancing operational efficiency, Select Harvest is well-placed to benefit from anticipated higher almond prices while remaining watchful of market pressures and operational risks.
Commentary From The Managers
There are 7 insights from 3 fund managers regarding their investment in Select Harvests Ltd (ASX:SHV) available on Thesis Tracker.
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Updates are made available to members within 12 hours of being released. The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Tamim Funds Management
30 Nov 2025
$4.58
Summary
- Select Harvests (ASX: SHV) is an integrated almond grower-processor focusing on horticulture, processing, and sales.
- Management highlights from FY25 include stronger macro demand, shrinking US supply, and Australian cost competitiveness.
- Recent self-help initiatives have improved processing capacity, pricing discipline, and cash conversion, resulting in a profit of A$31.8m and A$118.6m in operating cash flows.
- For FY26, key near-term challenges include variable crop volumes, higher water and input costs, bee availability in South Australia, and lease renegotiations.
- Some challenges are expected to be resolved in the upcoming months, reducing risk for the upcoming harvest.
- The company’s capital plan focuses on lower gearing, with dividends expected to resume in 2H26, alongside asset replacement and targeted growth capex (kernel recovery, new shakers).
- The outlook is bullish on prices at $11/kg and margin upside if volumes recover; disciplined cash management and value chain capture should drive further earnings and de-risking opportunities.
- A normalized harvest of 29k tonnes at current or elevated pricing is projected to deliver Ebitda of $120m to $150m, potentially doubling the stock from the entry price of $3.85.
Collins St Asset Management
30 Sept 2025
$4.03
Summary
- Collins St Asset Management continues to hold an investment in Select Harvests (ASX:SHV) due to its strong market position in the almond industry.
- Select Harvests is a Victoria-based company involved in the growth, processing, packaging, and sale of almonds and related products.
- The Fund has increased its investment in Select Harvests in recent months, driven by global demand and structural changes in the US almond industry.
- Significant factors include reduced new plantings, removal of older orchards, and water availability in the US, which are expected to support strong prices in the future.
- According to the latest market update, Select Harvests processed the 2025 almond crop at its Carina West facility, estimating a final crop size of 24,700 metric tons.
- This crop size is within the forecast range but below the midpoint, indicating market stability.
- Global almond prices have improved since the July USDA report, which forecast a US crop of 3 billion pounds, the largest producer globally.
- Despite initial price softening, prices are recovering towards pre-forecast levels, supported by a smaller marketable crop than anticipated.
- Select Harvests is strategically selling the remainder of the 2025 crop, with pricing approximately 1.5% below midyear forecasts.
- The expected average crop price is between A$10.14/kg and A$10.20/kg, reflecting positive market sentiment.
- The industry anticipates the US crop will reach 2.8 billion pounds, which Select Harvests views as favorable for prices over the next 12 months.
- Select Harvests has net debt of $80m and gearing at 15%, representing a 50% reduction in debt compared to the prior year.
Perpetual Asset Management
31 July 2025
$3.44
Summary
- Perpetual Asset Management notes that Select Harvests’ share price declined in July due to a drop in the spot almond price.
- The decline was influenced by a better-than-expected USDA crop estimate of 3 billion pounds.
- Industry experts have raised concerns about the accuracy of this estimate, suggesting a more realistic crop size of 2.65-2.8 billion pounds.
- This revision is attributed to significant tree removal and orchard abandonments following years of weak almond prices.
- Perpetual Asset Management believes Select Harvests is well-positioned for a period of stronger almond prices.
- The company benefits from tariff-favoured access to the Chinese market.
- Post-capital raise, the company’s balance sheet is stable, and management is focused on enhancing operating efficiency.
Perpetual Asset Management
30 June 2025
$4.11
Summary
- Select Harvests detracted from performance over the quarter (-17.3%), with share price pressure despite improving market fundamentals.
- In April, the company lifted its forecast almond price to $10.35/kg, driven by strong demand and tighter global supply, particularly from California.
- This increase was offset by a downgrade to its 2025 crop size due to frost damage and lower yields in some varieties.
- Although volumes are expected to be lower, management remains confident that higher prices will help mitigate the impact.
- Approximately two-thirds of the crop remains unsold, with most currency exposure already hedged.
- The company continues to manage operations and the balance sheet conservatively, with recent refinancing reducing funding risks.
- Despite near-term uncertainty around pricing and tariffs, the broader outlook remains positive, supported by strong demand, limited supply, and progress in improving margins and reducing debt.
Collins St Asset Management
30 June 2025
$4.11
Summary
- Select Harvest (ASX:SHV) is a Victorian-based company involved in growing, processing, packaging, and selling almonds and their by-products.
- Collins St Asset Management became interested in SHV due to signs of a turnaround in the almond industry after an eight-year bear market.
- Despite consistent and growing demand for almonds, a previous glut of supply led to falling almond prices.
- Recent improvements in almond prices, rising from $4 to $7.50 since 2022, have not yet been reflected in SHV's share price.
- Almond prices remain below the global average cost of production, indicating a need for either demand to fall or prices to rise.
- SHV is one of the few producers currently making a profit at the existing prices, with an average cost of production of $6.77/kg.
- Compared to California's average cost of production of $8.70/kg, SHV has a competitive advantage.
- The Australian almond market has gained importance, especially during the US and China tariff war.
- To strengthen its balance sheet after a period of low prices, SHV raised $80 million in late 2024, alleviating concerns about its financial health.
- Collins St Asset Management believes SHV is well-positioned to benefit from expected higher almond prices in the coming years.
- Currently trading on a forward cash flow multiple of 58x, SHV should ideally be trading at 10x, suggesting a potential share price closer to $6.80.
- If almond prices continue to rise, SHV could attract market multiples of 15-20x.
Perpetual Asset Management
31 May 2025
$4.51
Summary
- Perpetual Asset Management notes that Select Harvests detracted from relative performance over May, with a decline of -8.8%.
- The company released its first-half results for FY25, indicating a full-year result largely in line with market expectations.
- A prior update in April highlighted a lower-than-expected crop size.
- Approximately 60% of the current almond crop is committed for sale at attractive prices.
- The remainder of the crop is expected to support further debt reduction by year-end.
- The refinancing of debt facilities has mitigated short-term funding risks.
- Working capital cycles remain seasonally predictable.
- The outlook for global pricing in the short and medium term is highly favourable.
- Recent planted acreage reductions in California indicate a constrained supply outlook.
Perpetual Asset Management
31 Mar 2025
$4.97
Summary
- Perpetual Asset Management notes that Select Harvests contributed positively to portfolio performance in March, with a stock price increase of +9.0%.
- Almond prices have surged due to strong global demand and lower than expected supply in California.
- Variable weather during the Californian almond bloom for the 2025 crop has increased the likelihood of depressed global supply.
- Despite potential reversals in short-term supply disruptions, reduction in planted almond acreage in the US is expected to support favorable pricing for Select Harvest over the medium term.
- China remains a key import market, meaning that any tariffs on US almond exports to China could provide a tailwind to Select Harvest pricing realization.
- During March, Select Harvests held a management briefing and site visit to discuss plans for maximizing almond production yields, increasing processing capacity, and optimizing costs.
- Through these business improvement initiatives, Select Harvest is well positioned to benefit from the favorable pricing environment.
The completeness, accuracy or current status of the investments referenced are not guaranteed.
Frequently Asked Questions
Who is investing in Select Harvests Ltd (ASX:SHV)?
Fund managers including Collins St Asset Management, Perpetual Asset Management and Tamim Funds Management have invested in Select Harvests Ltd (ASX:SHV).
Why do fund managers invest in Select Harvests Ltd?
Fund managers invest in Select Harvests Ltd primarily due to its strong position in the almond market, characterized by a competitive cost structure and robust demand. Despite lower yields from recent frost damage, improving almond prices reflect favorable supply dynamics, especially against declining US production. The company’s strategic initiatives have enhanced efficiency, driving profitability and cash flow generation. Additionally, with reduced debt and plans for future growth, Select Harvests offers an attractive risk/reward profile, positioning it well for potential price appreciation.
What happened to Select Harvests Ltd (ASX:SHV)?
Fund managers are investing in Select Harvests Ltd (ASX: SHV) due to increasing global demand for almonds and structural shifts in the U.S. market leading to reduced supply and higher prices. The company showcases strong cash flow and profitability, underpinned by cost competitiveness in Australia and enhanced processing capabilities. Select Harvests is strategically managing its crop pricing and reducing debt, which positions it well for future earnings growth. With anticipated positive market conditions and disciplined cash management, fund managers view SHV as a solid investment opportunity.
What is the short interest in Select Harvests Ltd (ASX:SHV)?
The short interest in Select Harvests Ltd (ASX:SHV) is 2.23% which makes it the 118th most shorted stock on the ASX. Of the 142.1M shares that Select Harvests Ltd has on issue, 3.2M have been sold short.
What does Select Harvests Ltd (ASX:SHV) do?
Select Harvests Ltd. engages in the processing, packaging, marketing, and distribution of edible nuts, dried fruits, seeds, and a range of natural health products. It operates through following segments: Sale of Goods, Management Services, and Government Grant and Other Revenue. The Sale of Goods segment refers to the when the goods are shipped to the customer or when the services have been provided. The Management Services segment offers services provided for the management and development of farms as well as acting as sales agent for external growers by selling almonds on their behalf. The Government Grant and Other Revenue segment represents the assistance by the government in the form of transfers of resource to the group. The company was founded in 1978 and is headquartered in Richmond, Australia.