BRF Brasil Foods SA (BRFS-N)

If he had to buy a company that was based in Brazil, it would be this. It is really well run and is in a great area, because it is in the food business. Brazil has competitive advantages in the food business with the currency down as much is it is. He is not in a rush to go back to this, but does have it on his watch list.

(A Top Pick Oct 22/13. Down 6.6%.) The biggest food exporter in Brazil and one of the largest globally. They do a lot of poultry and meat products. The operating side has been doing great. Cutting costs and getting some growth. He would be a Buyer rather than a Seller at this time.

What worries him is that commodity companies in general tend to be highly cyclical. Things that will affect the sector is the grain trade that is starting to unwind in the US and will bring down input costs as well as issues around safety. Good company, but it’s not something that really excites him. You buy a commodity story when it is really weak and buy it on the recovery.

When he recommended it he thought it would do better. It will report in another month. You should have a nice lift with the Canadian dollar. Fall election should give it a lift also. This is a big year for a number of emerging markets.

(Market Call Minute) Has been creamed in the last couple of months.

(Top Pick Jul 05/12, Up 77.18%) trimmed it and added back on the dips. We got a pull back in the spring due to currency flux. It is the third largest exporter in Brazil. 1.7 billions Poultry per year slaughtered. Owns the Brazilian market. They have potential for significant growth. The risk to the investment is currency risk, international competition, of which there is not a lot.

Currency move with US dollar coincided with some weakness in the company after they bought some companies. 1/3 of poultry exported in the world comes from this company. Demographics are positive with this company. Just be patient with it. Internal problems have been fixed.