AGT Food & Ingredients (AGT.TO)

(Market Call Minute.) Has a very small Short on this. A little expensive and is in the middle of the pack on price momentum and a little too much debt for his liking.

Well liked on the street. He doesn’t know the fundamentals or the reason for the recent drop, but it has come down to some support. Momentum was really, really oversold. There is some support where it is right now. All the indicators are at the bottom. Until this breaks down below $35 he wouldn’t be too worried about it. If it keeps this level, it is probably going to be a good buy.

A fascinating company and has one of the most remarkable entrepreneurs leading it. One of the largest producers globally of pulse crops, processors of lentils, field peas. Grows in Saskatchewan and a bit in Australia and the Dakotas. They are starting to convert to making ingredients for food, a higher margin business. Dividend yield of 1.67%.

From the beginning of the year until last week this was doing phenomenally well. They came out with earnings, and although strong, the market became concerned that they were going to have to issue some equity in order to fund their cash flow. CEO recently indicated this was not the case. The lentil business is going to be a growing and an expanding one over the next 10 years. One of the world leaders as far as the distribution and packaging. This is one you could buy on a bit of a pullback. Sold his holdings, but is waiting for the technicals to steady out a little.

Typically food stocks do well in the summer. This one just had quite a hit. He is not aware of the fundamentals, but something happened to make the stock come down.

(Top Pick Jun 19/15, up 26.29%) Came out with earnings yesterday, but the stock is down 5% today. There is weakness expected in Q2/Q3 this year. There are few ways to play this. People are looking for alternative sources for protein. Quinoa and Chickpeas. This is just a bump in the road.

They are a major global player in chickpeas. They are big in plant-based proteins. They are doing great. The chart has been steadily going higher. They have rising momentum.

(Top Pick April 28/15, Up 46.83%) They expanded quite a bit, including into pet food. This company has done extremely well with an enthusiastic CEO. He really loaded up on it when it got close to its lows. They are at the right place at the right time in terms of global operations. They are one of the global leaders and will continue to expand.

(A Top Pick March 13/15. Up 42.74%.) It has done exceptionally well, as well as in the 3-5 years. Saskatchewan is the biggest lentil producer globally, and this is the biggest lentil exporter.

Beans. Formerly alliance grain traders. He has liked food for some time. There is a surging worldwide demand for beans as an alternative to meat. We are the leaders in distributing and manufacturing beans through AGT-T. Turkish and Indian crops have not been good this year. It has a fair amount of momentum here. The low Canadian dollar benefits them.

(A Top Pick Feb 23/15. Up 25.37%.) Still one of his largest holdings. Thinks they are going to show really good earnings growth. People are eating more quinoa, lentils and chickpeas to get the protein. There have been crop failures in India, so prices have all gone up quite a bit, and this company has been able to benefit. They also do gluten free pasta, so margins have been increasing for them. Thinks they are on the cusp of growing more rapidly, so you are going to see margins expand.

(The background of the 3 top picks is that they are dividend paying stocks.) 1.7% dividend yield and a 25% trailing cash flow payout. They process pulses which are high in protein.

(A Top Pick Nov 12/14. Up 6.29%.) He really likes the food business. It is both stable and growing. This one specializes in non-meat proteins, one of the fastest-growing parts of the business.

Fundamentals have been changing and improving. Have really been expanding in their ingredients line, particularly with respect to pulses. This is a good one to hold on to. He would be buying under $25.

As with any food companies, you have risks such as weather and pests. This company has done really, really well. Last quarter when they reported, they were disappointed because they had pretty well been sold out of their inventory and were waiting for the new crop, which is coming soon. There is huge demand for pulses globally. The attractive part about this company is that they are processing the pulses to come up with special products that food companies used to produce new gluten free products.