Fund Manager Summary
The fund managers believe that Select Harvests Ltd (ASX:SHV) presents a compelling investment opportunity, particularly as the almond industry shows signs of recovery after an extended downturn. They note that almond prices have improved from $4 to $7.50 since 2022, despite still being below the global average cost of production. With an average cost of production at $6.77/kg, SHV maintains a competitive advantage over California's $8.70/kg. The fund managers also highlight that SHV is among the few producers currently profitable, positioning it well for future price increases. Following an $80 million capital raise in late 2024, concerns about the company's financial health have been alleviated. They project that if almond prices continue to rise, SHV could justify market multiples of 15-20x, suggesting a potential share price closer to $6.80.
Source: Trading View
Commentary From The Managers
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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.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Collins St Asset Management
30 Sept 2025
$4.03
- 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.
Summary
Perpetual Asset Management
31 July 2025
$3.44
- 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.
Summary
Perpetual Asset Management
30 June 2025
$4.11
- 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.
Summary
Collins St Asset Management
30 June 2025
$4.11
- 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.
Summary
Perpetual Asset Management
31 May 2025
$4.51
- 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.
Summary
Perpetual Asset Management
31 Mar 2025
$4.97
- 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.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"In a landscape where almond prices seem poised for a rebound, Select Harvests appears to be a hidden gem, potentially undervalued at current levels. With competitive production costs and a revitalized balance sheet, the company could soon attract market multiples that reflect its true worth."
Last Updated: 30 Sept 2025
Query The Data
Frequently Asked Questions
Who is investing in Select Harvests Ltd (ASX:SHV)?
Fund managers including Collins St Asset Management and Perpetual Asset Management have invested in Select Harvests Ltd (ASX:SHV).
Why do fund managers invest in Select Harvests Ltd?
Fund managers are investing in Select Harvests Ltd due to its strong position in the almond industry, characterized by a recent turnaround after a prolonged bear market. The company is one of the few profitable producers with a competitive cost of production, significantly lower than that of California. With rising almond prices expected, driven by a reduction in supply and increasing demand, fund managers see potential for substantial price appreciation. Additionally, the recent capital raise has strengthened the company's financial stability, positioning it well for future growth.
What happened to Select Harvests Ltd (ASX:SHV)?
Fund managers are investing in Select Harvests Ltd due to its strong positioning in the almond market amid expected price recovery. Despite recent share price fluctuations linked to almond price declines, analysts highlight the company's favorable access to the Chinese market and improved operational efficiency following a capital raise. Structural changes in the U.S. almond industry, including reduced new plantings and water availability, are anticipated to support higher prices. Select Harvests' recent processing results indicate a manageable crop size and pricing expectations that align with market recovery trends, reinforcing confidence in its growth potential.