ABB Grain reported excellent results in Australia today — shares are up about 8%. I own this company because of the potential for a long-term recovery from drought conditions that have severely hampered grain volumes in that country (ABB Grain is primarily a malter and a grain distributor), but also because of the potential for their malting business thanks to Asian beer consumption and their continued expansion, most recently into New Zealand and Ukraine. My current average cost per share is US$7.90. Ticker is ABB in Australia, ABBGF on the pink sheets (pink sheets volume is almost nonexistent, it doesn’t even trade every day).
Here’s a writeup of their earnings release from The Age — management has boosted profit expectations for the year by nearly 10%, which is probably the primary driver of the share price at the moment. I am holding this for a multi-year recovery and expansion (ABB also has a valuable rail and port network that may see increasing use from miners, too), but remain cautious due to the potential for extended drought conditions, even though there are preliminary signs of improved conditions in Australia. Price is at a new all-time high now, but revenues are up dramatically and a few good harvests could make a remarkable difference in their future earnings. ABB Grain is one of the few agricultural companies that posted a profit (even though it was a tiny one) last year during the worst (I hope) of the drought, thanks to cost controls and product diversification.