Alliance Grain Traders Inc. (AGT) is a value-added pulse, staple food and ingredient processor for export and domestic markets. Through its offices and processing facilities located in some of the best agricultural growing regions in Canada, the U.S., Turkey, China, Australia and South Africa, merchandising and sales offices in the U.K., the Netherlands and Spain and origination offices in Russia, AGT produces a full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed as well as food ingredients such as pulse flours, proteins, starches and fibres. Through its subsidiaries in Turkey, the Arbel Group, AGT also produces staple foods such as Arbella Pasta, rice, and milled wheat products, including bulgur and semolina.
OK, fine and dandy.
But, AGT has been in a downtrend since 2010 when shares were at $34. An announcement issued as I was crafting this post suggests they are selling bonds at a 9% coupon. In today’s low interest environment, a 9% coupon speaks to the perceived risk of this company.
As the embedded image shows, I have applied the Gartley construct to AGT and I don’t like what I see. Point D projects to near the $8 level, which means the downtrend will continue perhaps for a couple months yet. Maybe at the $8 level, AGT will be priced more in accordance with its debt levels and its earning power ?