Shareholders in the Australian Agricultural Company (AAC) have had their patience tested. A shock loss in the first half of the year has the share price plumbing two year lows. However, the implementation of a major strategy shift is well underway and AAC could turn sharply as investors see the benefit of a shift to quality over quantity.

Despite recent discussions there is ample evidence of thematic investing paying handsome dividends – think commodity super cycle, dividend yields, housing recovery etc. The key is identifying the trend and investing before share prices take off.

The pure foods produced in Australia and New Zealand are highly sought by a rising consumer class across Asia. Stocks such as A2 Milk and Bellamy’s are buoyed by this investing theme, but their share prices reflect well established support. Investors looking at “buying the worst house in the best street” could have AAC on their list.

The cattle farmer is transforming its brand, investing in an integrated supply chain and (finally!) adopting suitable technology to drive productivity. In the last year it has launched in Singapore and Taiwan, bought more of its product internally and invested in data analytics. In my view these investments will restore AAC to a more profitable footing. Investors with the same view may wish to move before the market does.

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