Ag Growth International Inc (AFN.TO)

Had some disappointments. Corn augurs is one of their key products. Doing very well in the Ukraine and Russia and will be doing some work in the US. Likes the story conceptually but he wouldn’t buy it here.

Manufactures grain augurs. Very strong company. The downer in the stock has more to do with the market than anything. 7.7% yield.

Sells grain handling equipment and bins. The real story for them as a growth engine is going to be international expansion. That will have a more meaningful impact in terms of cash flow growth and earnings growth in 2013-2014, particularly as they focus on Europe. Very attractive yield and feels dividend is safe. Payout ratio is about 65%. US growth conditions push the stock down. The only other thing that can go wrong is if they get fully taxed. Had acquired a company and are using the losses this company had as a tax shelter.

Producer of legumes and lentils. Quite active in export markets. Stock had a nasty turn down in November, tried to recover, but is weakening again. There is somebody selling. When you see a chart like this one has, every time the stock lifts, someone is feeding the market. Until that rectifies itself, he would not be buying.

Manufactures augers that gathers corn from the fields and stores in portable bins. Likes the story going forward. Have had some short-term issues, but are expanding internationally, particularly in Russia. When they made the conversion from a trust to a corporation, they used some tax accounting that the CRA is investigating.

Suffered because of the drought across the US. Farmers are not having to use so much equipment for the harvest, so less demand for AFNs products. She likes Agriculture long term so this is on her watch list. The dividend should be safe.

Stock price has come off a bit. They provide small grain handling machines when crops are being harvested. Majority of their earnings come from the US which has not had a lot of crop to harvest because of severe weather conditions. She wants to have a bit more clarity as to how the farmers want to spend their money. Starting to get quite attractive and is on her watch list. 7.6% yield.

Ag Growth (AFN-T) or Canadian Natural Resources (CNQ)? Owns this one. Have expanded their product line and their geography. Well run and pays a good distribution. Canadian farmers have done well this year and thinks they will be buying new equipment.

One of the few agriculture stocks that he has as an "under perform". They are in the pulses side. If you own, consider moving to one of the other agriculture companies.

Not sure he would buy this at this time. A report has stated that droughts never last for just one year but tend to go on for 2, 3, 4 or longer. If this is so, fertilizer stocks could get hit quite hard.