RE: Hi John5 Jun 2020 16:13
Hi John
It's entirely reasonable to expect the share price to track the CPO price. However, as you've pointed out, this hasn't been the case for the last month or two.
We've seen some bizarre movements in the share price. There were days when the CPO price increased and buying of REA shares outweighed selling, yet the share price fell. The market makers are making a killing with the huge spread.
In the chairman's statement released on 7/5/20, he stated that the company would operate above break even at current CPO levels (excluding debt and preference share dividends). By my calculations, the price of CPO has risen by over 15% since that statement, so the company must be making a good profit on operations. Obviously debt is still a niggling concern, but the company will hopefully use operating profits to reduce debt levels.
I suspect that the big buys earlier this week (the 50k buys) were the directors adding to their stake and am expecting and RNS to confirm this.
The price of CPO loosely tracks the price of crude oil (up over 4% today) and other vegetable oils (soyabean oil is up over 1.5% today. The signs are good for R.E.A. Holdings!