AAC is the worlds largest beef producer, the Company owns and operates properties, feedlots and farms comprising around 6.4 million hectares of land in Queensland and the Northern Territory. Twiggy Forest has recently taken a 17.4% stake via his Tattarang Pty Ltd vehicle, he bought a large parcel at $2.13 while previously accumulating slowly but surely around $2- note he needs to launch a takeover if he wishes to go over 19.9%. There are a few important factors attracting MM to AAC:
- This is a solid Australian relatively recession-proof business with the added spice of a potential takeover thrown into the mix.
- The Consumer Staples Sector is usually the best place to be invested into/through a recession placing AAC in the right place at the right time.
- We believe the stocks still fairly cheap trading at 0.92x price to book valuation.
Tattarang may not have the short-term appetite for a takeover in today’s economic environment when the stocks trading towards last month’s $2.40 high but it’s hard to imagine it wouldn’t garner serious consideration if we see the stock slide back under $2, less than 5% lower.
