AGT Food & Ingredients (AGT-T)

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.

(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.

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.

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 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.

(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.

It had a bit of a tough year but it was commodity related. It is almost a one of a kind – the big one in the world. He has it for the long term. He does not think it will be caught in tax loss selling, however.

GE-N cut its dividend today. So is any dividend safe? – only the Canadian banks. He used o own AGT-T and it was an important part of his value momentum strategy but he sold out. Management is not doing a bad job but these things go in cycles.

Just reported, and numbers were ugly. There was nothing but downgrades. They have an ugly balance sheet, but that was sort of bailed out by Fairfax buying some of their preferreds recently. It's not in dire financial shape, but is maxed out in terms of its balance sheet. Everything has gone wrong that possibly could go wrong.

(A Top Pick Dec 21/16. Down 41%) There has been some problems with shipments but also the quality of the crops. This has been a very disappointing stock, but we’re close to the bottom now. You have to look at the fundamentals. The company is well managed, financially it’s doing okay and the debt picture isn’t as bad as people perceive. They are in a growing market and are expanding into food ingredients and pet foods, etc. Down the road this could be an acquisition target for some of the larger global food companies.

(A Top Pick Sept 16/16. Down 41%.) Had supply disruptions, and were having a tough time stocking up shelves to meet demand. Management kept saying things would improve, but he didn’t see it so he sold. Looks like there is more room to go on the downside. Dividend yield of 2.9%.

It has been getting hit hard. They were going to cut back on international sales. It has been on a big downhill slide ever since.