The company effectively made two major announcements that are, and ought to continue to provide an immediate pop in share price:
1) They raised guidance for 2011 and beyond
2) They raised the target dividend from 8% to 12% of income, and did so very cleverly
How many companies do that?
More importantly, they revealed a quantified road map why $2 per share EOY 2011 is really conservative.
There are now a new set of fundamentals that are better than any before. 2012 guidance is 25% better than ever before, clearly as a result of the dairy/land/capital development trade. I'll have more to add about why the future looks brighter than before this presentation.
But for now:
From memory, the share price is now about where it was when the dairy sale was announced. At the time, it was very difficult to understand -- the major factor, most easily understood -- was jettisoning 3/4 of revenues. Though they did explain the new strategies at the time, with good projections, the share price stumbled, understandably.
Now, they've issued another quarterly report, of by far their weakest quarter. Yet with this presentation, they are clearly on record that 2011 will not suffer as a result of the dairy sale, and in fact, they've accelerated the pace to higher than previously guided financial targets for 2012 and beyond.
Of course, they still have to execute. But I am encouraged that the share price indicates a confidence in the new direction/strategy that was not immediately there. And, more importantly, successive upcoming quarters will show two things:
1) massively better revenues than Q1, and
2) point toward/validate 2012 results that are better than anyone had a right to believe, based on public information
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