Sunopta Inc. (SOY-T)

This has great assets globally. The biggest sourcing platform for organic foods. It is really hard to get an organic designation. It takes 3 years for a farm to convert. They spent a lot of time putting together assets and it hasn’t been managed well. The company did a strategic review, brought in an investor and a new CEO, who essentially cleared out the dark spot in his own team. A very hungry and very competent guy. We are at the very early stages of this turnaround plan.

A leading supplier of health foods to companies like MacDonald’s. They source non-GMO and organic foods from 60 countries. The market for this is very, very big. They supply some of the world’s leading brands. He keeps owning it as long as it is the best available opportunity in the space.

Recently there were some larger shareholders who were unhappy with management, and were trying to potentially force them to sell the company. That didn’t occur, and instead they did a refinancing with a large US investor. The share price sold off after that. They are in the right space with organic food and food distribution. He would be a little cautious. Still has a fair amount of debt on the balance sheet. We need to see better evidence that they can execute. Has owned this in the past.

It has been a problem child for quite some time. Their balance sheet is looking better. This is a good time to be entering this stock as it is a good value opportunity.

Has recently taken a small position. The stock has underperformed to the frustration of many despite the fact that they are in the right area and that people deem it as a pretty good growth area going forward. A couple of very large shareholders have recently started to rattle the cages which would suggest that the management team or the board should do something to surface shareholder value. Longer-term, the assets have value, and it is possible that somebody else may want to own these assets, or the entire company. A pretty interesting risk/reward at this price.

Has had a few problems over the last few years. He started looking at this as a Short about 2.5 years ago, but didn’t pull the trigger on it. It is a lot more interesting now as a Long position. One of the few organic plays out there.

(Market Call Minute.)

This company revolves around food. One of the real pieces they have had underway in the last couple of years is food additives, in this case, putting extra fibre into food. Pretty good growth. Earnings are $.50 forecasted for 2014, going to 23% to $.61 in 2015, against a very high PE of 26X. Free cash flow yield of 3%. Profitable. They are continuing to make products that are in high demand.