Michael Smedley AGT Food & Ingredients AGT-T BUY Dec 12, 2017

(A Top Pick Feb 1/17. Down 42%.) It was as though the perfect storm had hit. Because they don't treat their pulses a certain way, they had some problems importing to India until they received the exemption. The company has diversified into the food and ingredients area more. Parts of the business are doing very well. He perceives this as more of a cyclical problem. They have an oversupply in a number of areas that have to work its way through the system, which could happen within the next 6 months to a year. At these prices, this stock could be fairly attractive, although it is a bit higher risk/reward.

(A Top Pick Feb. 1/17, Down 44%) Cyclical stocks can be severely hit by bumper crops or weaker than expected demand, but these happen cyclical and will play themselves out. AGT remains solid. He hasn't sold it on the way down, and he would buy at these levels. He's holding this even under $20. Recovery could take one to three years, but it will return to previous highs of mid-$30s to $40.

Historically, he loved it, buying it right at the start. A smart CEO. But now's a bad time for AGT--India is now self-sufficient with these crops, no longer a huge buyer. The CEO is resourceful and will find a way around this.

A former past top pick, but has since hit a cyclical downdraft. India has thrown up tariffs, but AGT has diversified into food ingredients. He firmly believes AGT will come back; it's at a cyclical low and diversification will pay off.
There's little downside risk now.

(Past Top Pick, July 21, 2017, Down 27%) A debacle over the past few years given politics in India. Doesn't expect much to improve until after the India elections in 2019. But AGT has diversified into ingredients for pets and humans and broadened its distribution. Potential buyout by management with Fairfax at $18/share means they are stealing this company. $23 is more reasonable given today's conditions. The company is worth more than $18.

Given that the company is going private, should I hold or sell? Trading a little above the bid price. Probably the feeling is that the board is going to weight in. He would sell. Professional arbitragers might assess better the odds and try to get a dollar or two more. He sold for his clients when the deal was announced.