World-class investor, Jim Rogers, once remarked that “nobody wants to be farmers anymore” because of changing lifestyle and rapid affluence among agricultural countries. Due to this global trend, there is a market distortion in the commodity supply and demand. Against the backdrop of rising demand and decreasing supply, commodity stocks are expected to do well in the long-run. In view of this, will Wilmar share price hit the roof in 2020?
All eyes are on the upcoming mega listing of its Chinese subsidiary in China and this catalyst had led to a buoyant Wilmar share price for the past few months. Question now is: will Wilmar share price hit the peak of $7.00 in 2010? That was when crude palm oil price was peaking due to oil price hitting USD100 per barrel. Fast forward ten years later, Wilmar share price had lost plenty of steam due to the lacklustre crude palm oil price. But the listing of its Chinese unit could possibly shake things up.
Indeed, the reason for the business diversification in recent years is because Wilmar share price has always been proxy to the crude palm oil. However, as compared to Golden Agri share price, Wilmar share price had been more resilient and corrected by a much smaller extent.
The trend of Wilmar share price could be attributed to its “integrated agribusiness model” which includes the entire value chain of the agricultural commodity business. Wilmar’s business activities are also very diversified and included oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, manufacturing of consumer products, specialty fats, oleochemicals, biodiesel and fertilisers as well as rice and flour milling.
Despite the diversified and integrated business model, Wilmar share price is hardly considered defensive. The 5-year beta is 1.01. This means this counter is quite volatile and is considered a growth stock. So what this means that Wilmar share price is sensitive to its revenue performance.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Wilmar before. Whether Wilmar share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Wilmar share price bottomed out?
For the past five years, the revenue consistently grew from USD38.7 billion in FY2015 to USD44.5 billion in FY2018. Due to the growing revenue, Wilmar share price surged from $2.60 in FY2015 to the current $4.10. The bullish form of Wilmar share price is a typical trend of a growth stock.
But things could turn dark for Wilmar share price as [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]
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