Alliance Grain Traders Inc. has attracted investor interest

Jul 3rd, 2013 – Comment

After examining the case for AGT I think that you shouldn’t shoot this running horse.


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Hey Lou,
Love reading your take and people’s questions, very interesting. I am only 24 but have been and will continue to be a follower of yours.

My REITS are taking a beating over the last month or so. On the other-hand Alliance Grain Traders have been taking off.

My question to you is do I pull some gains off from AGT, then wait for the drop to $12 or less and buy back in? It’s a great company and I want to hold the stock but have noticed over the last 7 months it is on a constant roller coaster ride. There has been a big climb does that mean a big swing is coming?

My current ACB is ~11.25/share.

I appreciate your thoughts and inputs on my question.

Cheers,
Ryan

 

Hey Ryan,

Thanks for the assignment and your kind words. Glad to see that you are getting some use from the analysis and clearly you are doing some great work yourself generating a 35.11% return on your adjusted cost basis. This will be the third time since February of 2012 that I undertake a study of Alliance Grain Traders Inc. (AGT TSX). The last time was on September 19, 2012 when the shares were trading for $15.49 and Joe wanted my opinion. It was noted that starting in August of 2012 the stock had pulled back and was testing support along the 200-day moving average. In addition the MACD and the RSI were not generating strong buy signals and a descending triangle had formed.

It was advised that patience would be the prudent path to follow which retrospectively was the right call as the stock fell to $11.15 by December of 2012.  Another run at that charts will help you determine how best to proceed with your holdings.

 

The three-year chart indicates that the downtrend that started in March of 2011 has been broken and that there have been opportunities to trade AGT for profits since it caught a bounce off the rock bottom in May of 2012. The golden cross that surfaced in June of 2013 would suggest that this move has more to give. I would expect some resistance to come in at $16.00. If it can move through $16.00 it could run to $18.00 with little holding it back.

 

 

 

 

 

The six-month chart illustrates the buy signals generated by the MACD and the RSI in April when the shares were trading in the $11.50 – $11.75 range. Currently the RSI is indicating that the shares are just moving into overbought territory while the MACD is not providing a strong buy signal.

After examining the case for AGT I think that you shouldn’t shoot this running horse. But watch for resistance at $16.00.

Make it profitable day and happy capitalism!

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