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Thoughts on AAC as shareholders jockey for position

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Thoughts on AAC as shareholders jockey for position

Good morning gents, I am wondering your thoughts on AAC at its current pricing, it appears to be trading at a 40% discount to NTA and a tightly held stock. Is there value here? Q2: The Major shareholder in LRK just purchased another $1.5m worth of stock, does this pique your interest here at all? Thankyou


Hi Chris,

Australian Agriculture Co (AAC) $1.58: This $950mn cattle and beef producer has endured a tough time since early 2022 with the stock down over 40% at its worst, Twiggy Forest owns 18.5% of the business via Tattarang Pty Ltd while insider Bryan Glinton owns over 51% having bought another $23mn worth at $1.91. The NTA is currently $2.61 showing the value ascribed to the underlying assets, however it is forecast to deliver a $15mn after tax loss in FY24 while its cash on hand has more than halved over the last 12-months.

  • Taking a longer-term view, AAC actually looks good fundamentally and technically to MM under $1.60 but we’re reticent to be too enthusiastic toward a stock that’s been drifting lower for almost 16-months.

Lark Distilling Co. Ltd (LRK) $1.73: The largest shareholder indeed topped up their shareholding and now own 14.5% of the company – a positive sign after a very tough period for the company thanks to some very bizarre behavior from the last CEO – drugs, sex & extortion (apparently). The new CEO is Satya Sharma who started on May 1 and was an executive for 10 years with Scottish giant William Grant & Son. When a new CEO comes on board, they do the rounds to all the shareholders to gain support (or not) and the major shareholder topping up after this process is an encouraging sign. However, with the stock down over 60% since late 2021 it’s another falling knife which as a practice of late hasn’t rewarded investors. We’re more 50/50 what it does from here and prefer to be on the sidelines.

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Australian Agricultural Co Ltd (AAC)
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