If you are looking for good value ASX stocks, then read on.
That’s because Bell Potter has just named one stock as a “compelling value play.”
Which ASX stock?
The stock that the broker is recommending to clients is Select Harvests Ltd (ASX: SHV).
It is an integrated grower, processor, and marketer of almonds, owning and operating farming and processing assets in Australia.
Bell Potter highlights that recent developments in the important Californian almond growing region could give the ASX stock a boost. It said:
The implementation of the Sustainable Groundwater Management Act (SGMA) in California has the potential to result in a multi-year reduction in Californian almond supply, kickstarting an upward price cycle that would be materially beneficial for SHV.
The affected acreage: California produces ~77% of global almonds and supplies ~83% of global exports. Counties deemed in chronically overdrafted basins account for ~80% Californian almonds production. The implementation of sustainability plans in 2020, looks to be already reducing yields and as we approach 2040, there remains the scope for an acceleration in orchard removals to reach sustainability targets.
In light of this, the broker sees Australia as a logical supply hub. It adds:
First derivative winners are established almond producers (and SHV is the best ASX listed exposure). But there is also likely to be a reallocation of capital towards Australian assets and this could create a growth narrative for SHV that is missing. This would likely be through development of new orchards and/or expanded third party processing and marketing opportunities. There would also likely be favourable gains in orchard values.
Should you invest?
According to the note, the broker has retained its buy rating and $5.30 price target on the ASX stock.
Based on its current share price of $3.89, this implies potential upside of 36% for investors over the next 12 months.
In addition, Bell Potter is expecting a 2.5% dividend yield over the period, boosting the total potential return beyond 38%.
Commenting on its investment thesis, the broker said:
While yields and prices are volatile year-to-year, we see the key implication being a long-duration upswing in the commodity value first and asset values second. Trading at a 28% discount to market NAV and 5.4x FY26e EBITDA we see SHV as a compelling value play on what could be one of the best global plays on a SGMA.
The post Why this ASX stock is a ‘compelling value play’ appeared first on The Motley Fool Australia.
Should you invest $1,000 in Select Harvests right now?
Before you buy Select Harvests shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Select Harvests wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
* Returns as of 20 Feb 2026
.custom-cta-button p {
margin-bottom: 0 !important;
}
More reading
- 5 things to watch on the ASX 200 on Friday
- 15 ASX shares going ex-dividend before EOFY
- Bell Potter says this ASX 300 stock can storm 36% higher
- Why Galan Lithium, Life360, Select Harvests, and Siteminder shares are storming higher
- This company has just announced a buyback, and the shares are surging
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.