Why the Select Harvests Limited share price has been crushed today

The Select Harvests Limited (ASX: SHV) share price has been amongst the worst performers on the market in morning trade.

At the time of writing the almond producer’s shares are down 14% to $4.16. This brings its year-to-date decline to a whopping 27%.

What happened?

This morning the company advised that it has received 98% of its 2017 almond crop at its Carina West Processing Facility.

After processing approximately 60% of the crop, the crop estimate has been reduced to between 13,500 and 14,000 metric tonnes.

While this is the second-largest crop in its history, it falls well short of its half-year forecast of 16,000 metric tonnes.

Unfortunately, although the crop has fallen short of expectations, management does not expect to offset this decline with higher prices due to 60% of sales commitments being locked in already.

The company’s almond price estimate has been revised to between $7.50 and $8.00 per kilo, compared to its prior estimate of $7.70 per kilo.

As a result management expects its full-year earnings to be materially impacted.

Should you buy the dip?

As tempting as it may be to invest in Select Harvests after this sharp decline, I would stay clear of the company.

Shares such as Select Harvests and Webster Limited (ASX: WBA) are among the more volatile on the market and are subject to significant risks from both weather conditions and of course supply and demand.

So rather than invest in a producer like Select Harvests, I would prefer to be invested in a company like Woolworths Limited (ASX: WOW) that ultimately sells its produce.

Instead of Select Harvests I would suggest investors take a look at these high-flying growth shares. I'm tipping each of them for big things this year and expect them to thoroughly outperform the almond producer.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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