Sharemark Auctions Jan 25th

Dairy Farmers of Britain looks set for record highs

There are monthly auctions for a range of stocks on Sharemark tomorrow, notably the Dairy Farmers of Britain loan stocks, Countrywide Farmers, and the weekly auction for Share plc.

There has been an unusual level of bidding in all of the Dairy Farmers stocks and they look likely to hit record highs. The 2012 stock is indicated at 80p, the 2016 at 70.5p and the new 2017 stock at 85p.

I can only speculate as to why. One possibility is the chance of an indirect buyback by the company; another is just that a few more investors have discovered the stocks.

I consider DFOB a good, but not a great investment at these levels, and don’t intend to bid. I’d remind anyone who is considering it that, aside from the usual questions about financial merit, these stocks are small, illiquid and hard to sell again once you have bought them.

I also don’t understand why the 2017 stock is bid higher than the 2016 when it has a lower yield-to-maturity. Grounds for caution, I think.

Good news, though, not least for farmers who belong to the DFOB co-operative.

Disclosure: I own shares in Dairy Farmers of Britain Loan Stock 2012, 2015 & 2016.

January 24, 2008 | Filed Under Markets & macro, Companies

 

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