Reporting season might be fantastic for those who love being bombarded with numbers but for the rest of us, it can be overwhelming.

That's why it can be helpful to lean on other people's work and listen to which ASX shares the professionals liked out of the frenzy.

Shaw and Partners portfolio manager James Gerrish had two such tips this week:

This business 'looks extremely well positioned'

Animal feed provider Ridley Corporation Ltd (ASX: RIC) has enjoyed a 53.5% rise in its share price over the past 12 months.

In the past week, it hit all-time highs after the company released its results.

According to Gerrish, Ridley exceeded market expectations with a 25.4% boost in revenue to $637.9 million.

"No guidance was given but this $712 million 30-year-old business looks extremely well positioned over the years ahead, especially with its 17.5x valuation not being too demanding against a good pathway for growth," he said in a Market Matters Q&A.

"Market Matters likes this business whose more than 3% fully franked dividend is an added bonus."

Other professionals mostly agree. According to CMC Markets, four out of the five analysts that cover Ridley currently rate the stock as a buy.

"Also, to add spice to the mix, Andrew 'Twiggy' Forrest holds a 6.53% stake in the company through his Tattarang vehicle."

'Compelling from a risk/reward perspective' 

It's been a year since Russia invaded Ukraine.

As well as the horrendous death toll on both sides and the violent disruption of a democratic country, the war set off a global energy crisis.

One solution that gained momentum is going back to nuclear power.

That method of generating electricity fell out of favour in recent times, especially after the 2011 Fukushima disaster in Japan.

But last year's events rocketed energy security to the top of the priority list for many governments.

Gerrish revealed that his emerging companies portfolio currently contains uranium miner Paladin Energy Ltd (ASX: PDN).

"We are happy buyers at current levels — around 74 cents on Friday afternoon."

However, he had a tip for those interested in dipping their toes into nuclear energy.

"Both Paladin and the uranium sector is a volatile space, which we like, but remain keen to keep some ammunition to accumulate into aggressive dips which have occurred regularly over the last 18 months," said Gerrish. 

"Another dip towards 65 cents would look very compelling from a risk/reward perspective."

The Paladin Energy share price is down 3.9% compared to 12 months ago.

The post 'Happy buyers': Expert's 2 ASX shares to grab after boom reporting season appeared first on The Motley Fool Australia.

Two ASX All Ords shares that have released results are listed below. Here's what they reported and how investors have responded:

NRW Holdings Limited (ASX: NWH)

The NRW share price is falling 9% today despite the diversified contract services company delivering a result in line with its guidance. The ASX All Ords share reported a 15% increase in revenue to $1.3 billion and a 7.4% lift in EBITA to $80.1 million.

Management has also reaffirmed its full year revenue and EBITA guidance of $2.6 billion to $2.7 billion and $162 million to $172 million. However, investors may believe that NRW's first half performance means the lower end of its guidance range is more likely now.

Ridley Corporation Ltd (ASX: RIC)

Investors have responded significantly better to this premium quality, high-performance animal nutrition solutions provider's half year results. The ASX All Ords share is up over 11% at the time of writing. Ridley Corp reported a 25.4% increase in revenue to $637.9 million and a 20.3% lift in net profit (before significant items) to $21 million.

A key driver of this growth was its Packaged Feeds and Ingredients segment, which delivered a 21.9% increase in earnings. This was supported by its Ingredient Recovery business, which reported strong results from accessing premium markets with differentiated products. Another positive was that higher selling prices for protein meals and tallows more than offset increased raw material and manufacturing costs.

Looking ahead, while no guidance has been provided, management advised that it expects its earnings to improve over the prior corresponding period.

The post 2 ASX All Ords shares making massive moves on results announcements appeared first on The Motley Fool Australia.

It has been a rough year for a number of ASX shares. A return of 0% would seem pretty good when some names have fallen by 40%, 50%, or even more. But, a handful of names are close to their 52-week highs.

Just because something has gone up doesn't mean it's going to keep rising. But, with a few of them, I believe they could keep doing well in 2023 and potentially beyond.

So, let's get into those ideas.

Ridley Corporation Ltd (ASX: RIC)

Ridley says that it's "Australia's leading provider of high-performance animal nutrition solutions".

"Ridley has been an integral part of Australian agriculture for almost 30 years, building strong partnerships with suppliers, customers, and local communities," the company says.

It works with a variety of farmers, from the "huge pastoral farms of Northern Australia, to the backyard hobbyists, to the entrepreneurs, to the enthusiasts".

The Ridley share price has gone up by 30% in 2022 to date.

Management believes FY23 first-half earnings before interest, tax, depreciation and amortisation (EBITDA) will improve year over year thanks to positive contributions from its growth initiatives, as well as favourable product pricing.

It said being the market leader is providing scale benefits, enabling it to employ specialists and adopt technology. The ASX share said its product and customer mix means it can provide earnings resilience through "weather, diseases, and market cycles".

The company wants to provide an improved customer experience, which can help increase demand and improve margins.

According to the estimate on Commsec, it's priced at under 16x FY23's estimated earnings.

Qantas Airways Limited (ASX: QAN)

The Qantas share price has managed to produce a rise of 15% over 2022.

I think the airline has done very well in terms of making profit and improving its balance sheet position.

However, the ASX share is expecting yet more capacity to return, which could be very useful in capturing more passenger demand. Don't forget, not all of its international capacity has returned to pre-COVID levels yet.

The oil price has been drifting lower over the last few months. It's close to pre-Ukraine war levels, which could improve Qantas' operating costs in the year ahead. The cheaper it is to fly, the more this helps the airline's profit margins.

China's reopening could lead to more Chinese tourists using Qantas planes as well, which could be a further boost.

In the first half of FY23, Qantas is expecting to make between $1.35 billion to $1.45 billion of underlying profit before tax.

A2 Milk Company Ltd (ASX: A2M)

A2 Milk is a leading infant formula company. The A2 Milk share price has risen by around 25% since the start of the year. It's up almost 60% over the past six months.

The ASX share is expecting revenue and profit growth in FY23, as it passes on price increases to customers.

But, news of a return of Chinese tourists could be a useful boost for the ASX share in time. Daigou buyers could return, as well as stronger demand for A2 Milk products.

The post 3 ASX shares near 52-week highs I think can climb higher appeared first on The Motley Fool Australia.

The soccer World Cup is under way, with 32 national teams now camped in the Middle East to compete for glory.

While the choice of host, Qatar, has been controversial due to the country's human rights record, billions of soccer fans will still tune in to barrack for their flag. The sport is a matter of life and death in many parts of the world.

As Australia prepares for its first game kicking off early Wednesday morning, Abrdn investment manager and soccer enthusiast Shawn Lee couldn't help himself.

He has picked his own team of 11 ASX shares that would lead his portfolio to a World Cup win:

Goalkeeper

The safe pair of defensive hands at the back for Lee is Auckland International Airport Limited (ASX: AIA).

"We need a good communicator with quick reflexes guarding our goal," Lee said on the Abrdn blog.

"Auckland Airport's prompt response to the COVID crisis was impressive. It moved swiftly to rein in its cost base, pausing large capital projects and preemptively raising emergency capital."

With the world now well into the post-pandemic era, he feels like Auckland Airport can "fend off the ups and down of economic cycles" and offers its investors a monopoly asset.

Left and right backs

According to Lee, left back Bapcor Ltd (ASX: BAP) is "one of the most compelling defensive players".

"Even though Bapcor has had a recent change of coach, new chief executive Noel Meehan has progressively won over the dressing room to restore our team's stability," he said.

"Although many things may not be 'better than before', we think Bapcor has a long playing career ahead and, allied to reasonable valuation, demands a place in our starting line-up."

The right back position will be taken by real estate fund Centuria Capital Group (ASX: CNI).

"We wanted a versatile full-back that's quick on its feet, with good anticipation and composure," said Lee.

"Centuria fits the bill nicely, with its nimbleness evident as it pivots its core unlisted funds business."

He admitted office assets were under a cloud in the post-COVID era, but the company has other fires burning.

"Centuria continues to seek out growth by pivoting its product towards other property sub-sectors more in vogue – including healthcare, industrial property and agriculture investments."

Centre backs

Lee's middle defenders are Infratil Ltd (ASX: IFT) and Ridley Corporation Ltd (ASX: RIC).

"We want our centre backs to provide as much pitch coverage as possible, and Infratil's portfolio of other core investments span a range of sectors such as data centres, telecommunications, retirement living and electricity generation," he said. 

"We think Infratil is staying one step ahead of a fast-evolving game – evident through its investment in solar/wind farm developer and operator Long Road Energy."

Animal feed producer Ridley is on the radar of many experts at the moment.

"Ridley's defensive psyche is finely tuned, with the majority of customer contracts allowing it to pass through inflationary costs, while its mix of divisional exposures should also provide some protection against adverse weather," said Lee.

"After shedding excess, some might say Ridley has a small frame. But this player still packs a punch."

Midfielders

Left, centre and right midfielders are IPH Ltd (ASX: IPH), AUB Group Ltd (ASX: AUB) and Monadelphous Group Limited (ASX: MND), respectively.

"Like any good midfielder, IPH is in excellent condition and is no stranger to playing the endurance game, especially given that the patent lifecycle and corresponding workflow can span 20 years or more," said Lee.

"We drafted AUB in to play a crucial role in our team as we believe its traditional defensive strengths are being nicely complemented by an improving offensive game."

Monadelphous sounds like a biotech, but it's actually a Perth-based mining services provider.

"It has an exemplary operating track record, differentiating it from what is otherwise a peer group of service providers that typically experience booms and busts," Lee said.

"Midfield is often referred to as the engine room of the team, and the WA resources engine is most definitely humming!"

Forwards

The wingers for Lee would be IDP Education Ltd (ASX: IEL) and Hub24 Ltd (ASX: HUB).

"Wingers need good ball control to get in behind opposition defences and set up attempts on goal. We believe IDP has excellent skills and a few tricks in its locker," he said.

"In between digitising the business through computer-based IELTS testing, the acquisition of online course database provider Hotcourses, the launch of marketplace platforms such as IDP live, the shrewd purchase of IELTS India and thriving amid the COVID crisis that otherwise devastated the international student industry, we think the business has executed almost flawlessly and consistently made fools of opposing defences."

Hub24 has "had more shots at goal than many of its peers".

"Speed is a key attribute of good wingers, and this is where Hub24 does not disappoint," said Lee. 

"Platform funds under administration have grown at breakneck speed since the business was established in 2007, in part due to tailwinds from the move towards independent financial advice, but also as a result of innovative platform technology and a superior customer experience."

Finally, the big goal scorer in the centre forward position is Pro Medicus Limited (ASX: PME).

"We can't fault Pro Medicus's hot scoring streak, announcing multiple record-sized cloud-based contract wins, together with strong renewal momentum on improved pricing and contractual terms," said Lee.

"Not only do we anticipate conversion of the contract pipeline, we think the business has enhanced its scalability through cloud-based deployment, which will grow its addressable market meaningfully and allow it to penetrate a smaller customer base previously deemed to be less economic."

The post 11 ASX shares that make Abrdn's World Cup team appeared first on The Motley Fool Australia.

Ask A Fund Manager

The Motley Fool chats with the best in the industry so that you can get an insight into how the professionals think. In this edition, Maple-Brown Abbott portfolio manager Phillip Hudak names two ASX shares to buy that are under the radar of investors.

Hottest ASX shares

The Motley Fool: What are the two best stock buys right now?

Phillip Hudak: First of all, I'd say Ridley Corporation Ltd (ASX: RIC). 

Ridley has transitioned from a turnaround story with the closing of underutilised mills, lifting plant utilisation, lowering costs, and developing new products. We believe that the company looks to be transitioning to the early stages of the upgrade cycle. We believe that the company has multiple potential earnings drivers, including further supply chain rationalisation. 

Second of all is small project efficiencies, as well as the potential of market share gains coming through. The balance sheet is looking more attractive with a buyback in place for this current financial year. The company's experienced a reasonable re-rate, however, we see upside to earnings and upside to balance sheet flexibility coming through.

MF: There has been quite a re-rate in share price just over the last three months, hasn't there? What was the catalyst for that?

PH: The company actually has a strong strategic vision over FY '23 and '24 that they've actually outlaid to the market, as well as the stepping stones in relation to those earning drivers coming through there. 

Also, the balance sheet is in a lot better condition from the previous management there, and this provides the company with a lot more optionality, either via a buyback or the potential of acquisitions to further grow earnings going forward. 

I suppose from our perspective, while there are the stepping stones to see earnings growth, there are key risks, including the recent floods as well as agricultural seasonality. Although Ridley is less volatile as compared to other agricultural stocks — commodity price fluctuations and continuation of supply chain disruptions, there are signs that these are easing.

MF: Great, and your second pick?

PH: Second pick is Boss Energy Ltd (ASX: BOE). This is a uranium producer. 

Before I discuss the company, I would like to touch on the industry structure and the environment. Energy security has been a key concern that has emerged over the past six to 12 months. Particularly given the geopolitical tensions, notably between Russia and Ukraine, has increased the focus on energy security across the world. 

This has become particularly important in the uranium space, particularly given that 45% of uranium production comes from Kazakhstan and a similar level of material processing is from Russia. The shift to renewables, notably wind and power, has had some shortcomings with providing reliable base load power during the transition period.

In addition, public and political sentiment has changed regarding nuclear [power]. Some examples include nuclear being recently included in the EU taxonomy in addition to the halting of nuclear power plants closures in the US and Europe, the restart of idled nuclear power plants in Japan, and the ambitious Chinese rollout of new reactors going forward.

There is a significant shortfall of supply forecast by the World Nuclear Association, with restarts required into the middle of the 2020s. The current spot price is below the marginal cost of production and so far suppliers have been reasonably disciplined in relation to restarts and waiting for prices to recover to make a reasonable return over the cycle. 

Specifically to Boss, Boss Energy offers a low-cost restart operation in the uranium-friendly jurisdiction of South Australia. There is existing infrastructure in place and less risk in relation to cap-ex blowouts versus other mining companies out there that would be starting from scratch. The company's well positioned to take advantage of the current rising uranium market environments with offtake contracts to be signed.

There's fast-tracked production expected by the end of calendar year 2023, and expected to produce 2.45 million pounds per annum going forward. There's attractive return metrics. It's a low operating cost with an all-in sustaining cost of $25.60 per pound versus the spot price, which is roughly around that $50 mark coming through there. 

The key risk for this company, in addition to the sector, is another nuclear disaster similar to Fukushima or Chernobyl which would set the industry back a decade.

MF: I see the share price shot up about a year ago. Was that because they announced that they were going to restart the site? 

PH: Yeah, a year ago there was positive sentiment regarding the sector. You actually had the Sprott Physical Uranium Trust, which has entered the market and effectively has been buying surplus pounds in the market, which had a positive catalyst for the uranium price, as well as positive announcements from an industry perspective in relation to public and political sentiments changing regarding nuclear.

The post Feed and yellow cake: Fundie's 2 ASX shares to buy that you've not thought about appeared first on The Motley Fool Australia.

WAM operates several listed investment companies (LICs). Some focus on larger companies like WAM Leaders Ltd (ASX: WLE) and WAM Capital Limited (ASX: WAM).

There's also one called WAM Microcap Limited (ASX: WMI) which focuses on small-cap ASX shares with a market capitalisation under $300 million at acquisition.

WAM says WAM Microcap targets "the most exciting undervalued growth opportunities in the Australian microcap market".

These are the two small-cap ASX shares the fund manager outlined in its most recent monthly update:

Ridley Corporation Ltd (ASX: RIC)

Ridley is described as Australia's largest commercial provider of high-performance animal nutrition solutions.

The fund manager said that in June, Ridley Corporation attracted attention from other companies looking to purchase its shares after speculation that AGR Partners, a substantial shareholder of the business, is looking to exit.

At the end of May, Ridley Corporation announced its FY23 to FY25 growth plan which supports the ongoing earnings momentum of the business.

WAM said the framework for Ridley Corporation's capital allocation under its growth plan is expected to "allow the company to deliver a total shareholder return (TSR) of over 15% per annum" and an increase in the indicative dividend payment ratio from between 40% to 60%, to 50% to 70% of net profit after tax (NPAT).

The fund manager said that it remained "confident" in the outlook for Ridley Corporation and its CEO Quinton Hildebrand who, in WAM's view, has "executed strongly" to date by divesting unprofitable business units and structurally lowering costs, helping organic growth.

It must be noted that WAM recently sold shares on 19 July 2022, but it has been regularly buying (and selling) shares of Ridley during 2022.

Close The Loop Inc (ASX: CLG)

This ASX small-cap share is described as an end-to-end solutions provider from design and manufacturing through to the collection and recycling of waste products across a variety of markets.

WAM noted that the company provided a trading update ahead of its first investor day and presentation. In that trading update, the company upgraded its FY22 revenue forecast to $82 million and increased its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast to $13.6 million.

What caused this upgrade? The fund manager explained it was due to "strong organic growth across all divisions", particularly in the US and Europe packaging and recycling segment.

WAM pointed out that there is a "strong outlook" for the small-cap ASX share, with an annual revenue run-rate of over $100 million. Growth is expected to be further increased through add-on acquisitions. Non-binding term sheets had been signed for three acquisitions. The company recently announced the acquisition of Alliance Paper.

The fund manager said Close The Loop is "under-researched with no broker coverage and over time, this provides a catalyst to drive a further share price re-rating."

The post 2 small-cap ASX shares this fund manager is 'confident' about appeared first on The Motley Fool Australia.

It's a rough day on the market for most All Ordinaries Index (ASX: XAO) shares, but this stock is bucking the trend to reach its highest price ever. The Ridley Corporation Ltd (ASX: RIC) share price lifted 4.5% to reach $1.84 at its intraday high. For context, the benchmark index is currently down 0.24%.

So, what's boosting the All Ordinaries share to a record high on Wednesday? Let's take a look.

But first, what does the ASX All Ordinaries share do?

Market watchers may not be familiar with long-term ASX participant Ridley Corporation.

The company produces animal nutrition products. It offers feed solutions for a broad range of animals, from livestock to fish.

Ridley Corporation has been around for a while. It was formed in 1987 and listed on the ASX later that year. The company boasts a $562 million market capitalisation, according to the ASX.

Ridley Corporation share price hits new record high

The Ridley Corporation share price has been on a roll over the last year or two, lifting past its previous high recorded in 2003.

The stock has been on the up and up since August 2020, helped along by an 18% gain recorded in the days following its financial year 2021 full-year results.

That saw the company resuming its dividend payments after putting them on the back burner through the worst of the pandemic-induced downturn.

Ridley Corporation also reported its profits had quadrupled year on year, lifting to $24.9 million. That's up from a $10.8 million loss.

The All Ordinaries share's Wednesday gains might be partly in reaction to the strong performance of its peers.

S&P/ASX 200 Index (ASX: XJO) shares operating in the same sector as Ridley Corporation are lifting on Wednesday, with the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) gaining 0.29%.

Right now, the Ridley Corporation share price is nearly 20% higher than it was at the start of 2022. It has gained close to 55% since this time last year.

The post Amid today's sell-off, guess which ASX All Ordinaries share just hit an all-time high appeared first on The Motley Fool Australia.

There are many divergent views about what the share market might do in the next 12 months.

Some experts are expecting a global recession, while others are convinced the bull market will resume after a short pause.

So really there is only one certainty: uncertainty.

In that case, the team at Wilsons reckons avoiding loss-making companies is the way to go.

"The prospect of higher interest rates makes both debt and equity funding more expensive. Critical, as loss-making businesses typically require external funding," its memo to clients read.

"The double whammy for loss-making companies is the impact of higher bond yields, which lowers the valuation of long-dated growth cash flows."

Considering this, Wilsons analysts dug up the most profitable businesses out of their Wilsons Conviction Insights list.

The set represents their best small-cap ideas on a 12-month view to consider at the moment:

Profitable small-caps that are looking good

Not only are these 4 Wilsons picks profitable, but 3 of them also give out dividends:

• Collins Foods Ltd (ASX: CKF): 3% 12-month forward dividend yield
• Ridley Corporation Ltd (ASX: RIC): 4% 12-month forward dividend yield
• Readytech Holdings Ltd (ASX: RDY)
• City Chic Collective Ltd (ASX: CCX): 1% 12-month forward dividend yield

Of that group, Readytech and City Chic held the most buy conviction for Wilsons analysts.

Technology services provider has "strong cash flow" and an "undemanding valuation", the memo stated.

"Easy 2H earnings guidance to achieve top-end of revenue guidance."

The Readyteach share price has plunged 18.4% for the year so far.

City Chic stocks have had an even worse time, falling more than 38% in 2022 and almost 50% since November.

Wilsons analysts are keeping the faith with the fashion retailer though.

"Inventory and, therefore, balance sheet risk has increased. We believe the inventory will clear over an expected strong summer in the northern hemisphere."

The Wilsons team admitted Collins Foods has had its work cut out in recent times.

"KFC franchise owner has been impacted by macro-related news [from] QLD/NSW floods, EU exposure with Russia/Ukraine, and chicken shortages have weighed on the share price," read the memo. 

"Key peer Restaurant Brands New Zealand Limited (ASX: RBD)'s poor margin performance has also weighed on the stock. We think this news is captured in the 40% fall in the share price."

The Collins Foods share price has shed almost 25% for the year so far.

The post 4 small-cap ASX shares with the best 12-month outlook: experts appeared first on The Motley Fool Australia.

ASX shares will be heavily impacted by the direction of interest rates in the coming year, according to IML Investors Mutual.

This means that it's now more important than ever to avoid the speculators and buy up businesses that actually have firm growth prospects.

"We expect central banks to raise interest rates fairly sharply over the next 18 months to more 'normal' levels," read a memo to clients from IML analysts.

"As such, we continue to steer away from the riskier parts of the sharemarket and remain focused on identifying and holding what we assess to be good quality companies, are well managed, which offer sound value, and which can grow their earnings and do well over the next 3 to 5 years."

Here are 2 such examples from IML's Australian Smaller Companies Fund:

The company you've never heard of, but actually have

The name HT&E Ltd (ASX: HT1) — short for Here, There and Everywhere — may not be familiar to many investors.

But they have likely heard the company's product sometime — in their car, on their smart speaker or even while shopping.

The company owns the Australian Radio Network, which runs many popular radio stations like the KIIS network, Chemist Warehouse Remix and the Pure Gold network.

It also runs outdoor advertising, from its roots as APN News & Media.

The IML team loved HT&E's $308 million acquisition of regional radio network Grant Broadcasters late last year.

"This acquisition is an excellent fit for HT1 as it creates a truly national radio network that will give the company added reach and the enhanced ability to fulfil national briefs for agencies and larger advertisers."

The memo also noted that HT&E had resolved its dispute with the Australian Taxation Office for "less than half the amount originally sought". 

"With buoyant ad market conditions expected to continue into 2022, HT&E remains good value on a PE of 12 times FY22 and a yield of over 4%."

HT&E shares are up about 11% over the past year. They closed Wednesday at $1.99.

Agricultural feed is a timeless demand

Ridley Corporation Ltd (ASX: RIC) is another ASX share that may not be immediately recognisable to retail investors.

The company, which produces animal feed and nutrition products, has seen its share price climb 66% over the past 12 months.

The IML team noted Ridley presented positive numbers at the annual general meeting late in the year.

"To November 2021, year to date EBITDA growth in both of Ridley's reporting segments had exceeded the 16% growth seen in the prior corresponding period," the memo read.

"In support of continued earnings growth, AGM commentary also highlighted further progress on delivering various business improvement initiatives, with the associated profit growth still to come."

Despite the negative impact of COVID-19 on some of its customers, Ridley itself has navigated the pandemic ably.

"While the spread of Omicron seems hard to avoid, safety practices and employee buy-in has resulted in little lost time to date," stated IML analysts.

"Despite the robust share price performance over the last 12 months, Ridley continues to look cheap, trading on a one-year forward PE of just 13x with a 3.8% dividend yield."

Ridley shares closed Wednesday at $1.56.

The post 2 cheapie ASX shares looking pretty for 2022 appeared first on The Motley Fool Australia.

The ASX is suffering today in what could be a reaction to a disastrous session in the United States. But, interestingly, one All Ordinaries Index (ASX: XAO) share has been thriving.

While most of Australia slept, the Nasdaq Composite Index (NASDAQ: .IXIC) tumbled 3.3%. Meanwhile, the S&P 500 Index (SP: .INX) slipped 1.9% and the Dow Jones Industrial Average Index (DJX: .DJI) slid 1%. This may have put substantial pressure on ASX shares, particularly those in the tech sector.

Right now, the S&P/ASX 200 Index (ASX: XJO) is down 1.87% and the S&P/ASX All Technology Index (ASX: XTX) has plunged 5.65% lower.

Meanwhile, the All Ordinaries Index is down 1.84%. So, which All Ords share has managed to dodge the carnage and soar to a new multiyear high?

This ASX All Ordinaries share is surging to new heights today

Earlier today, the Ridley Corporation Ltd (ASX: RIC) share price reached a high of $1.63 – the highest it's been since 2015.

However, it has since dipped. Currently, it's flat with its previous close, trading at $1.58. Though, that's 20% higher than it was 30 days ago.

So, what might be saving the All Ordinaries livestock feed company's stock from tumbling today? Let's take a look.

What might be buoying the Ridley share price?

The last time the market heard price-sensitive news from Ridley – aside from during its annual general meeting – was when it released its results for the financial year 2021.

Then, the company announced it had returned to profitability. It posted increases to its earnings before interest, tax, depreciation, and amortisation (EBITDA) and a $24.8 million after-tax profit. And, according to some industry experts, its strong performance might continue this year.

The Australian Government's latest Agriculture Overview forecasts the value of farm production will reach a record $78 billion over 2021/2022.

While Ridley doesn't produce agricultural commodities, it works closely with those that do. Thus, what's good news for farmers is likely to be good news for Ridley.

However, Ridley is far from the only ASX All Ordinaries share to be gaining today.

The company is joined in the green by Cyclopharm Limited (ASX: CYC) and Panoramic Resources Ltd (ASX: PAN), both recording gains of more than 6% today.

Meanwhile, some of the index's tech shares, including Humm Group Ltd (ASX: HUM) (which became the subject of a takeover offer today) and Freelancer Ltd (ASX: FLN), are also trading higher.

The post This ASX All Ordinaries share has defied today's sell-off to hit a new 6-year high appeared first on The Motley Fool Australia.

The Ridley Corporation Ltd (ASX: RIC) share price is soaring after the company released its earnings for the financial year 2021 (FY21).

Right now, the Ridley share price is $1.23, 7.89% higher than its previous close.

Ridley share price jumps on 2 cent dividend

Here's how the stock feed producer performed through FY21:

• $927.7 million in revenue, 4.1% less than the prior corresponding period.
• Earnings before interest, tax, depreciation and amortisation (EBITDA) up 16.1% to $69.1 million
• After tax profit of $24.8 million, up from a $10.8 million loss in FY20
• Resumed paying dividends with a 2 cent final dividend

Over FY21, Ridley reported $79 million of gross profit, up 18% on those of FY20. It also saw its operating cash flow increase 107% to $82.4 million.

Ridley's bulk stockfeed segment reported EBITDA before significant items of $32.4 million, down 5% from FY20. However, FY20 saw the segment's income bolstered by 'drought feeding'.

The company's packaged feeds and ingredients segment has EBITDA before significant items of $46.5 million. That represents a 32% increase on the prior corresponding period.

Additionally, the company's inventory is back to pre-COVID-19 levels.

Ridley ended the period with $39.9 million of cash and $83.1 million of debt.

What happened in FY21?

It's been a quiet run in FY21 for Ridley and its share price. Although, it did sell some assets.

The company sold surplus land at Lara and Moolap for a pre-tax profit of $3.7 million.

In April, it also sold its wholly owned, non-operating, and Singapore-incorporated subsidiary Novacq International Pte Ltd for no profit or loss.

Ridley also announced it was to sell its Tasmanian extrusion facility in May. However, the sale was finalised after the financial year ended.

What's next for Ridley?

Here's what might drive the Ridley share price in FY22:

Ridley's FY21 included several sales that have occurred since the end of the financial year just been and will be added to its FY22 results.

First off, the company sold its Tasmania-based Westbury extrusion plant for $54.85 million earlier this month. A $7 million profit from the sale will be noted in Ridley's FY22 results.

Additionally, a $2.2 million contract for the sale of its former feedmill at Bendigo was signed on 27 July. Another sale contract, this time for its former feed mill at Mooroopna worth $1.65 million, was completed on 13 August.

The sales will generate a pre-tax gain on sale of around $2.6 million in FY22.

Ridley also outlined its growth plan in its FY21 results.

The company plans to undergo a $4 million plant commissioning in the first half of FY22. The plant will produce land animal protein concentrates.

Ridley will also launch Food for Dogs in speciality pet stores in April, and its Cobber range into rural grocery from the first half of FY22. Additionally, it plans to supply grocery house brands in FY22. It expects to launch a Novacq prawn feed, developed by CSIRO, in FY22.

The company will also increase its asset utilisation and expand its Narangba facility.

Finally, it plans to launch its Ridley Direct, which will see an ingredients sales desk selling to livestock producers who mix feed on farm.

Additionally, Ridley plans to spend $15 million over FY22 and FY23 on a series of small projects to extend its product offerings, de-bottleneck its capacity, and reduce costs.

The post Ridley Corp (ASX:RIC) share price soars 8% on resumed dividend appeared first on The Motley Fool Australia.

The Ridley Corporation Ltd (ASX: RIC) share price is on the rise today. At the time of writing, shares in the agribusiness are selling for $1.10 – up 3.77%. By comparison, the All Ordinaries Index (ASX: XAO) is currently sitting 0.06% higher.

The company comes into focus after announcing the sale of its Tasmanian extrusion facility for nearly $60 million.

Let's take a closer look at today's news.

Ridley company profile

Ridley Corp engages in the production and marketing of stock feed and animal feed supplements. The company provides its animal nutrition solutions to food producers in the dairy, poultry, pig, aquaculture, sheep, and beef industries. Ridley also caters to laboratory animals in the research sector as well as equine and canine markets in the recreational sector.

Why the Ridley share price is rising

Ridley shares are in the green today after the company provided a statement to the ASX advising it "has entered into an agreement for the sale of the Westbury extrusion facility in Tasmania to Gibson's Limited…" for $54.9 million.

Justifying the sale, Ridley called the facility "underutilised" and said the transaction will allow it to "reset" its manufacturing cost base. It goes on to highlight that the move will allow it to better service the aquafeed market. Customers will be serviced via is expanded extrusion facility in Narangba in Queensland.

The sale must still be approved by the ACCC and will require the obtaining of "certain certificates" related to the plant. The company expects the deal to be completed in the first half of FY22. It anticipates making a pre-tax profit of over $7 million from the deal. Investors seemingly approve of the sale, judging by today's Ridley share price.

Management commentary

Ridley Managing Director and CEO Quinton Hildebrand said:

The significant upgrade and expansion of our Narangba, Queensland extrusion facility is due to complete in July 2021. This will consolidate our aquaculture feed production into one facility, providing a more competitive and lower cost supply chain to service the Australian and New Zealand aquaculture industry, including our Tasmanian customers.

Ridley share price snapshot

Over the past 12 months, the Ridley share price has increased by 51.7%. Shares in the company reached a 52-week high of $1.21 in March on the back of a positive broker note from Goldman Sachs. Since then, however, the share price has fallen by 9.1%.

Ridley Corp has a market capitalisation of $351.4 million.

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The Elders Ltd (ASX: ELD) is defying the market gloom today as it's one of the few handful of stocks to be gaining ground.

The Elders share price jumped 2% to $12.29 in after lunch trade when the S&P/ASX 200 Index (Index:^AXJO) slumped 0.7%.

Nearly every sector is trading lower as US stocks fell overnight. But shares in the agribusiness zoomed ahead after Goldman Sachs reiterated its conviction "buy" recommendation on the ASX share.

Bumper harvests for the Elders share price

"Market conditions have strengthened across Australian Agricultural markets in the last 3 months led by a bumper winter crop harvest and strong cattle prices," said the broker.

"Increasing grower optimism and strengthened balance sheets should support strong demand for ELD's agribusiness products and services."

What's more, the broker believes Elders' profit margins are set to expand and that it will win market share.

These factors are behind Goldman's prediction that the company's earnings before interest and tax will grow by 13% compound annual growth rate (CAGR) from FY21 to FY23.

Growth drivers

"The Rural Products segment (42% of FY21 group gross margin) is performing well, in our view, aided by a recovery in the summer crop and strong demand for pre-emergent chemicals as we approach the 2021 winter crop planting window," added Goldman.

"We expect a solid performance in the Livestock Agency Services segment (28% of FY21 gross margin). Weaker volumes are more than being offset by higher livestock prices and market share gains."

You might not think it, but Elders is also a beneficiary of the structural online shift that is being accelerated by COVID-19.

Not too old for the online revolution

The company owns 50% of the Auctions Plus platform for livestock and is well placed to facilitate the move to online livestock auctions.

Elders is on Goldman's conviction list and the broker's 12-month price target is $15 a share.

While agriculture is a tough space on the ASX to invest in, the 2021 outlook for the sector is bright.

Another buy idea in the sector

Favourable weather, reasonably strong commodity prices and the global economic recovery from COVID are some of the factors behind this upbeat view.

Another ASX-listed agribusinesses that are likely to benefit from these tailwinds include the Ridley Corporation Ltd (ASX: RIC) share price.

Credit Suisse upgraded the ASX share to "outperform" from "neutral" this week as the broker has greater conviction in its medium-term growth profile.

The post Why the Elders (ASX:ELD) share price is outperforming the ASX today appeared first on The Motley Fool Australia.

Today, the Ridley Corporation Ltd (ASX: RIC) share price was flat at 71 cents after the company released its financial results for the year to 30 June 2020.

How did Ridley fare in FY20?

Ridley Corp reported revenue of $967.94 million for FY20. This was down 3.5% compared to the 2019 financial year.

The animal nutrition company pointed to three factors for the revenue drop. They included the expiry of a supply agreement with Inghams, the pass through of raw material movements and lower sales due to the coronavirus pandemic. 

Net profit after tax (NPAT) for the 2020 financial year was -$8.64 million. Significant items that affected NPAT were the closure and replacement of 3 feedmills with one large facility, together with restructuring costs, asset impairments and the settlement of a legal claim. 

The company's earnings before interest, tax, depreciation and amortisation (EBITDA) from ongoing operations were $64.3 million in FY20, an increase of 8.2% compared to FY19.

Ridley had earnings per share (EPS) of -2.8 cents in the 2020 financial year compared to 7.6 cents in FY19. Earnings per share before significant items were 7.1 cents in FY20.

The company reported a 13% improvement in financial  performance from ongoing operations in FY20.

Ridley invested $42.9 million in capital expenditure which included an investment in Novacq production in Thailand. 

Ridley's net debt at 30 June 2020 was $147.2 million. The company's board suspended its final dividend to pay down debt.

However, company said its growth strategy was expected to deliver improved earnings in the 2021 financial year.

About the Ridley share price

The animal nutrition company is Australia's largest livestock feed producer. It has a history dating back to 1987.

In June 2020, Ridley opened a new mill in Wellsford, Victoria. This was part of the company's recent rationalisation and asset renewal program.

The Ridley share price was trading at 71 cents at the close of trade today, up 7.58% since its 52-week low of 66 cents. However, the Ridley share price has dropped 31.07% since the beginning of 2020 and is 29% lower than this time last year.

The post Ridley share price flat after annual result appeared first on The Motley Fool Australia.

The Ridley Corporation Ltd (ASX: RIC) share price has fallen by 1% so far this morning following two announcements to the market: an acquisition of land in Thailand and the appointment of a new executive.

Ridley is an Australian company involved in the production of high-performance animal nutrition solutions.

Ridley currently has a market capitalisation of $311 million, and its share price has declined by 29% over the past 12 months. Shares currently trade with a price-to-earnings ratio (P/E) ratio of 13.03 and offer a fully franked trailing dividend yield of 4.3%.

Acquisition of land in Thailand

This morning, Ridley announced the successful completion of the acquisition of approximately 50 hectares of land encompassing the existing Thailand Novacq production ponds and the remaining 51% shareholding in the Pen Ngern feedmill. The acquisition is for an outlay of $171.2 million Thai Baht (approximately AUD$8.2 million).

In June 2017, Ridley secured the lease of the land in Chanthaburi, Thailand, less than one kilometre from the Pen Ngern feedmill in which it had previously acquired a 49% interest. The land was subsequently converted to 14 Novacq production ponds with the necessary infrastructure to support the operation.

Ridley had moved to acquire full control of the assets following the recent development approval to house the Novacq dewatering and drying operation within the Pen Ngern feedmill precinct, as well as the Thailand Board of Investment (BoI) approval required for foreign land ownership.

The company believes that securing these production facilities provides the ideal footprint for the long-term expansion of the Novacq operations in Thailand and the foundation to supply Novacq to prawn producers in the Asia Pacific and Middle East regions.

In respect of the acquisition of the assets in Thailand, Ridley CEO Quinton Hildebrand commented, "This transaction has been a long time in the making and we are delighted that the BoI has recognised the importance of this project to both the local economy and Thailand's prawn farming industry."

Appointment of new Chief Executive Officer – Novacq

The Thailand acquisition coincides with the announcement to appoint Siddharth (Sid) Jain to a newly created role of Chief Executive Officer – Novacq. Sid joins Ridley from Archer Daniels Midland where he has held the role of Director, Business Development & Strategy, Asia Pacific, for the past four years.

According to the announcement, Sid will be based in Singapore with responsibility for the Yamba, New South Wales and Chanthaburi, Thailand Novacq operations, and will commence in the role on 1 April 2020.

Ridley CEO Quinton Hildebrand commented, "We are delighted to appoint Sid to the newly created role of Chief Executive Officer NovacqTM and Group Business Development Executive with a focus on accelerating the commercialisation of the NovacqTM franchise internationally."

"Sid is a highly commercial business leader with extensive experience in delivering organic growth and acquisitions in the Asia Pacific region," he added.

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Amongst the winners which have enjoyed big re-ratings in their share prices have been wine producer Treasury Wine Estates Ltd (ASX: TWE), baby formula marketer Bellamy's Australia Ltd (ASX: BAL) and vitamins company Blackmores Limited (ASX: BLK).

The above three stocks have experienced major share price gains in the past year and while their outlooks remain bright, understandably investors may be wary of buying at these levels.

Given the long-term tailwind of Chinese demand however, it arguably makes sense to look for other companies that could also benefit from the same forces, but which haven't as yet captured the market's attention.

Agricultural Stocks under the radar?

A recent report by the Australian Bureau of Statistics (ABS) noted that the value of Australian farm production had risen to $54 billion, an increase of 5.4% despite poor seasonal conditions across much of the country.

The ABS noted that the major driver of the increase was "strong international demand for livestock and meat products."

With a cultural change reportedly occurring in China that has led to increased consumption of red meat, there are a few specific stocks which could be well placed to benefit.

Australian Agricultural Company Ltd (ASX: AAC) is a leading owner and operator of cattle farming and beef production facilities. With a newly established abattoir in Darwin, AACo is strategically positioned to export into Asia.

Meanwhile, rural services business Elders Ltd (ASX: ELD) and feed supplier Ridley Corporation Ltd (ASX: RIC) are both important contributors to the supply chain for beef production and marketing.

With the shares of these three companies arguably more reasonably priced, this could be a good space to search for stocks with upside potential from China's growth.

The post 3 shares that could have more growth potential than Bellamy's Australia Ltd appeared first on The Motley Fool Australia.

According to a recent IBISWorld report there are a number of Australian industries set to rise and fall over the next 12 months, the question is: "How will it impact the companies on the S&P/ASX 200?

According to analysts at IBISWorld the cotton growing industry is in for a bumper year in 2016, expecting rapid growth of 19.2%. Other industries set to boom in 2016 include internet publishing and broadcasting, organic farming, houseware retailing, and university and other higher education, which we'll discuss in this installment, Part 1.

Some industries however, are in for a less than exciting year, which we'll discuss in Part 2.

(The list of shares in this article is by no means exhaustive, but simply an indication of the types of companies and industries to watch for in 2016).

The Winners

Cotton growing in Australia

IBISWorld projects that the cotton growing industry will fly in 2015-16, growing by 19.2% to reach $879 million. The industry is expected to recover strongly from a poor performance in 2014-15, when revenue fell by 62.7%.

The reasons are that a marginal increase in global cotton prices coupled with increased cotton production are expected to contribute to this substantial revenue growth in 2015-16.

According to IBISWorld senior industry analyst Spencer Little, "the cotton growing industry is highly volatile, with revenue movements ranging between 136.1% growth and 62.7% decline over the past five years."

Internet publishing and broadcasting in Australia

Over the past five years, consumers have continued to migrate towards the internet for services previously provided in newspapers, such as real estate, car and job advertising.

The main source of industry growth in the current year is expected to be the entrance of popular video streaming websites, such as Netflix, Stan and Presto. These players do not compete directly with other internet publishers and broadcasters. Rather, they are taking market share away from free-to-air and pay-TV providers, as consumers grow tired of waiting for new content to be broadcast on traditional mediums.

Advertisers love the internet, "The ability to easily search with filters for specific results makes the internet the prime medium for these forms of advertising," explained Mr Little.

Shares to watch include, Webjet Limited (ASX: WEB), SEEK Limited (ASX: SEK), Carsales.Com Ltd (ASX: CAR), REA Group Limited (ASX:REA), Seven West Media Ltd (ASX: SWM), Nine Entertainment Co Holdings Ltd (ASX: NEC), Ten Network Holdings Limited (ASX: TEN), Southern Cross Media Group Ltd (ASX: SXL).

Organic farming in Australia

The organic farming industry is forecast to fly in 2015-16, with revenue expected to grow by 5.6% to reach $733.8 million. Demand for organic products in Australia and overseas has risen as consumers have become increasingly aware of the perceived health benefits and environmental effects of their food choices.

"The industry is expected to continue to grow strongly as organic consumption becomes more mainstream," Mr Little said. The nation's two major supermarkets, Woolworths Limited (ASX: WOW)  and Coles, which belongs to Wesfarmers Ltd (ASX: WES), now stock greater amounts and wider ranges of organic produce, making the purchase of organic products more convenient.

Shares to watch include, Australian Agricultural Company Ltd (ASX: AAC), Ridley Corporation Ltd (ASX: RIC) and Capilano Honey Ltd (ASX:CZZ).

Houseware retailing in Australia

Housewares revenue is projected to grow by 5.1% in 2015-16, but by only 1.9% in 2016-17. The slower growth in 2016-17 can be attributed to a projected fall in consumer spending and a decline in residential building construction activity, amid fears of an oversupply in multi-unit apartments.

Over the past five years, demand for houseware products has grown due to a rise in residential building construction, an increase in new dwelling commencements and alterations to existing dwellings. "Industry revenue growth has been further supported by rising household discretionary income, which has boosted consumers' ability to spend on housewares," Mr Little explained.

Shares to watch include, McPherson's Ltd (ASX: MCP), Harvey Norman Holdings Limited (ASX: HVN), Myer Holdings Ltd (ASX: MYR) and Reject Shop Ltd (ASX:TRS).

University and other higher education in Australia

Revenue in the university and other higher education industry is expected to grow at a compound annual rate of 4.6% over the five years through 2015-16, to reach $29.6 billion. Revenue is projected to rise by 3.6% in 2015-16, driven by increased student enrolments, including both domestic and international students.

"International student enrolments grew by 8.1% in 2014, driven by preferable student visa arrangements and a depreciation of the Australian dollar," said Mr Little.

Shares to watch include, 3P Learning Ltd (ASX: 3PL), Navitas Limited (ASX: NVT) and Australian Careers Network Ltd (ASX: ACO).

Stay tuned for our next installment, Part 2, were we'll take a closer look at the losers, and how it will impact the companies on the S&P/ASX 200.

The post Which Australian industries are set to soar in 2016? appeared first on The Motley Fool Australia.

Australia is one of a handful of countries uniquely positioned to benefit from this theme, as it enjoys a perception among these consumers that it is a producer of clean, high quality and untainted food and drink.

The story of Blackmores Limited (ASX: BKL) and its rise from $30 to above $200 is one that even non-investors are now familiar with, while infant formula makers also enjoyed an incredibly lucrative year.

So what are some other businesses that are leveraged to the growing middle class of Asia and their seemingly insatiable desire for Australian food products?

Australian Agricultural Company Ltd (ASX: AAC) is one example of a stock that directly benefits from the proven trend that shows that as populations become wealthier, the demand for meat products grows. Australian Agricultural Co is based on the Northern Territory, and is an exporter to Asian markets, primarily of high-quality beef products. Interestingly, it also stands to benefit from predicted drought conditions, as decreased supply has the effect of raising prices.

Another company benefitting from an extended period of drought is Select Harvests Limited (ASX: SHV). Select Harvests is one of the largest almond producers in the world, with the majority of growers located in California, which has been plagued by drought in recent years.

This has seen the average price per kilogram of almonds grown by Select Harvests boom, which has also allowed the company to reinvest the greater profits in initiatives that increase crop yields.

Select Harvests is also likely to benefit from the increasing uptake of almond milk as a lactose alternative in Western markets, a trend that will likely be replicated in Asian markets as the rate of lactose intolerance per capita is generally higher in those countries.

Still on the theme of nuts, Webster Limited (ASX: WBA) is a grower of walnuts. While not benefitting from the same pricing boom that has affected almonds, walnut prices worldwide have increased over the past year, and are predicted to continue to do so. In addition, Webster has an interesting asset in terms of its water rights from the Murray-Darling system, which increase in value when conditions are dry.

In much the way that mining services stocks were a more stable way to gain exposure to the mining boom than investing in pure play miners, Ridley Corporation Ltd (ASX: RIC) is a way to invest in agriculture and food without being exposed to actual products.

Ridley is in the business of supplying feedstock to farmers and companies across the nation. Put simply, as more animals are reared to meet increasing demand, the amount of food required to feed them grows as well. For this reason, Ridley could be a stable long-term play on increased agricultural output from Australia.

Finally, moving to the fruit and vegetable space, Costa Group Holdings Ltd (ASX: CGC) is a company that allows investors to own a part of the dominant berry, tomato, citrus and mushroom supplier to the nation's supermarkets. Costa is an interesting company in that it has attempted to mitigate the typical weather related risk that come with investing in agriculture through technology.

As a result, the majority of Costa's crops are grown in greenhouses, or using innovative farming techniques that limit or eliminate the risk of storms, wild winds and drought. The company has an interesting opportunity to licence this intellectual property to growers in other regions of the world to help improve crop yields, which would open up an attractive new revenue stream for it.

Of the stocks in the list above, Costa and Ridley are the best placed from a business strategy point of view, while Select Harvests has the most leverage to rising prices due to the adverse conditions affecting the majority of its competitors.

The post 5 ways to invest in the food boom in 2016 appeared first on The Motley Fool Australia.

By 2050, another 2.3 billion people will call the world home. They'll demand 60% to 70% more food than is currently available. Between now and 2060, beef and dairy consumption will jump 120% and 100%, respectively, and consumers more generally will demand higher quality ethically-produced products.

Finally, globalisation and environmental change will bring deep shocks and adverse conditions for primary producers, according to recent research from the CSIRO.

Australian farmers — and investors — stand as frontrunners for the expected surge in demand for high-quality foods.

Here are five ASX-listed companies I think you should add to your 'long-term' watchlist.

1. Rural Funds Group (ASX: RFF) is a property trust that owns a diversified portfolio of quality agricultural products including property, infrastructure, water rights, plants and livestock. It's a risk-averse alternative for long-term investors seeking exposure to agriculture.
2. Ruralco Holdings Ltd (ASX: RHL) is a diversified agricultural services business with 500 retail outlets across Australia. From property sales to water solutions and grains and wool, Ruralco is — arguably – another defensive agriculture stock worth watching very closely. Like Rural Funds, it too pays a decent dividend.
3. Ridley Corporation Ltd (ASX: RIC) is Australia's largest commercial provider of high-performance animal nutrition solutions. It also has strategic investments in property via Ridley Land.
4. A2 MILK FPO NZ (ASX: A2M) is dual-listed on the ASX and New Zealand stock exchange. The company specialises in producing milk with just the A2 protein, which is proven to avoid stomach discomfort.
5. Bega Cheese Ltd (ASX: BGA) would be familiar to many Australians. Its range of quality cheeses and related products have dominated supermarket shelves for over 40 years. With dairy prices lower, now could be an opportune time for savvy investors to wade into the stock.

Foolish takeaway

Make no mistake, investing in agriculture is a high-risk proposition because many outside influences will ultimately determine profitability year-in-year-out. However, if Australian farmers are indeed set to encounter an El Niño period in coming years, savvy long-term investors may use it as an ideal opportunity to swoop in on cheap quality agricultural stocks to hold over the long term.

The post 5 ASX stocks to get your portfolio MOO-ving appeared first on The Motley Fool Australia.

But are the tables turning?

The $50 billion agri-sector could rival the mining boom, reports the Australian Financial Review as emerging economies like China turn their attention to food security from mineral imports.

Even as the rest of us are nursing painful losses in iron ore stocks like Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO), mining magnets like Gina Rinehart and Andrew Forrest are already investing big in cattle stations.

The shrewdness of the move is well quantified by the chart below as investors in the industry enjoy high feeder cattle prices at a time when input costs are falling.

The price for feeder cattle, which are cows and bulls that are big enough to be moved into feeder lots to be fattened for slaughter, has surged close to 50% over the past three years at a time when the cost of fuel and corn/grain (used in feedstock) has fallen.

Australian producers are enjoying an additional tailwind from the falling Australian dollar, which will only help fatten profit margins and make them more competitive on the global stage.

While ASX-listed agriculture related stocks have a patchy record at best of producing returns for investors, they are pulling ahead of resources stocks as tumbling hard commodity prices weigh on the mining sector.

Cattle company Australian Agriculture Company Ltd (ASX: AAC) is up 14%, while rural services group RuralCo Holdings Ltd (ASX: RHL) is 32% ahead over the past five years.

In contrast, our mining giants Rio Tinto and BHP Billiton Limited (ASX: BHP) are sitting on losses of around 30% each.

But before you get too excited, you should know that investing in the agri-sector is a lot harder for mum and dad investors for a number of reasons.

Firstly, there's simply a lack of choice. There are very few agri-stocks to choose from and the lack of diversity makes it difficult for investors to control risk.

Further, the situation appears to be getting worse, not better. The proposed takeover of cotton and water rights trading company Tandou Limited (ASX: TAN) by walnut and onion company Webster Limited (ASX: WBA), and our propensity to sell agriculture assets to offshore investors are some of the reasons why the pool of investments is getting shallower.

Perhaps Tandou's justification for recommending the takeover to investors sums it up best. Australian investors just don't appreciate agri assets enough with Tandou's shares trading under its tangible asset value for a long time.

Another problem is the lack of coverage in the sector, especially when you compare the attention the mining sector gets – yes, even today when the mining sector has been de-rated.

The poor broker coverage of agri-stocks makes it harder for retail investors to decide when to buy into the sector.

Lastly, most of the action is concentrated on private assets –an area that is out of reach of the everyday investor.

Investing in this space is just as volatile as investing in mining with operations impacted by a range of factors that are outside the control of management. This includes weather, government regulations, trade barriers and volatile global commodity prices.

For those looking to get a toehold in the sector, perhaps the analogy used during the mining boom is the best way to play this thematic – don't buy the miners, but invest in the ones selling the spades and shovels.

From that perspective, stocks like Ridley Corporation Ltd (ASX: RIC) and RuralCo look appealing if you believe agri-stocks will embark on the same multi-year boom that was enjoyed by the miners.

I for one would love to see initial public offers in this space, but until that happens this is one sector that is hard to take seriously.

The post Can agriculture stocks enjoy a dining boom? appeared first on The Motley Fool Australia.