AGT Food & Ingredients (AGT.TO)

We are seeing the pulses, beans, high-protein products, in so many different areas to give extra nutritional value, as well as for protein that is not meat related. This company has also benefited from the strong demand from countries like Turkey and India. Dividend yield of 1.6%.

A long term holding for him. People are looking for other sources of protein besides red meat. Chickpeas and Lentils. They did a good job of growing their earnings. The macro environment is good for them and operationally they are doing well. He would feel comfortable holding it for the next few years.

This is a name he likes. Chart shows that there was a little bit of a break out, but is now coming back to test at around $36.70. The space is really good long-term. Long-term chart shows a great upward trend. You could take an initial position now with a Stop just below the current price. If it got above $40, it would be something you would probably add to.

Pulse crops such as lentils, field peas. A very determined Saskatchewan native with family in Turkey, has built this company from scratch. They have an enormous plant in Minot, North Dakota. The first piece of good news is a huge crop, which will lower prices a little, but increase volumes. This will allow him to pull some working capital out. Secondly, he is getting into the ingredient business, so he is going to grind up the crops. He has a line up of big food makers. It is a better base than corn starch to make healthier foods.

A global player in pulses, a vegetarian protein which is very big these days, a healthy eating trend. They also have a big market in India and Turkey, which are seeing a decline in production of lentils and chickpeas. The profit margin and revenue is rising. They have a good order backlog. A fantastic stock.

Some of his clients’ positions are getting large enough that he is looking at having to trim them. If you have a 5-year outlook, this is probably a reasonable place to initiate a position. The company has diversified from what it was 3 years ago, from just being in pulses and distribution, into more food ingredient, and have opened up some very successful lines in packaging both pet foods and going more into food for human consumption.

(Market Call Minute.) An interesting name. He had always considered this to be a Sell, and has been Short it a few times in the last 6 months. Thinks it is a bit overhyped given its free cash flow generating ability.

Has had a very clear 5 year high about 2.5 times its book value. The stock has hit an old high and the fair market value at the same time. It is not going anywhere until we get a setback to something more viable. Be very cautious here.

(A Top Pick May 9/16. Down 16.59%.) Specializes in vegetable-based proteins, lentils, and is very popular among the younger generation. The short term drop is mainly due to a supply constraint, a temporary phenomenon. Harvest season is going to be much better in the next 2-3 quarters, and he continues to like this.

A great company. 5 years from now she doesn’t think it will be a public company. Somebody will take it over. There might be an opportunity coming up to buy it, as the coming quarter should be fairly weak. Basically they have run out of pulses because the demand has been so high. The harvest will be robust, so Q3 should be good again. Wait until they report.

(A Top Pick July 29/15. Up 14%.) A well-run company in a pulse market that is growing. They are expanding more and more into the food ingredients area. Have been expanding their production line.

Has pulled back enough that it is relatively attractive again. The pullback is as a result that the most recent crop of pulses had been somewhat disappointing, which hurt volumes. However, going into the fall, he is expecting a fairly large crop in Canadian pulses. The UN has declared 2016 to be the International Year of the Pulse. Export pulses is increasing very rapidly. Dividend yield of 1.76%.

(Market Call Minute.) You look at the chart and it looks pretty good, but it is not a great business. Benefited from a lot of tailwinds that are not going to be long-term in nature. Low ROE and high valuation versus its peers.

While he liked the underlying business, he felt that there were just too many moving parts in the business, and they just couldn’t seem to fire on all cylinders. The CEO seemed to bear most of the responsibility, and he was concerned about key man risk.

Markets specialty food products such as lentils, etc. This is gaining popularity, and Canada is able to grow a lot of it. They are really getting into the food ingredient business where they process them and put them into pastas, etc., where they get a lot more margins. They’ve been successful over the past few years. A good company. Somewhat volatile because of good and bad harvests. A well-managed company.