The Elders Ltd (ASX: ELD) share price has reached a new 52-week high today. At the time of writing, Elders shares are trading at $10.93, up 3.5% for the day. Earlier today, the Elders share price reached as high as $11.16 – the new 52-week high watermark and the highest share price the company has commanded since 2010.
Today's new high continues the stellar run Elders shares have enjoyed in 2020 so far. This is a stock that barely felt the coronavirus-induced market crash we saw back in March. While the S&P/ASX 200 Index (ASX: XJO) fell 36.5% between 20 February and 23 March, Elders shares were down just 11.5% in contrast.
Since then, the Elders share price has exploded, rising from $7.31 on 23 March to the new high of $11.16 today. That's a rise of more than 50%. Year to date, the shares are up 70.5%, including 7.3% in the past month alone.
What does Elders do?
Elders is a company that's been around the block a few times – initially beginning life way back in 1839. Today, it continues from these roots as an agricultural company that sells goods and services to farmers and primary producers. These mostly consist of insurance, banking and other financial products.
Why is the Elders share price soaring today?
With no major news or ASX announcements since 27 July for this company, its performance over the past month to a new 52-week high is a little perplexing and not entirely obvious.
But digging a little deeper, I think the answer is still there.
According to reporting from The Guardian, the country has just seen its wettest winter since 2016, with NSW set to record a year-on-year increase in winter crop production of 300%, which would be 49% above the 10-year average.
What has this got to do with Elders?
Well, Elders sells insurance, including for crop yields. If crop yields indeed come in at these kinds of levels, it's likely Elders will have significantly lower payouts on its hands in 2020, and possibly in 2021. With farmers' looking to have a prosperous year in 2020, it's possible that they will look to take out even more insurance, or at least bump up their existing policies with Elders.
All of these factors bode extremely well for the company and is why (in my view) the Elders share price is at a new high today.
This sentiment was echoed by my Fool colleague Bernd Struben, who (shoutout) predicted this kind of move a fortnight ago.
