Ruralco benefiting from a lower AUD

Ruralco benefiting from a lower AUD. A company which is slightly under the radar, but which we believe has the attributes we look for and whose customers will benefit from a lower AUD is Ruralco, which services the local agricultural industry. A lower AUD will assist Australian agriculture compete with other major food producing nations, as will recently concluded free trade agreements. Just as our hard commodity producers have benefitted from the rise China and other Asian countries we believe the rural sector can benefit from the rise of the Asian middle class who are demanding increasing quantities of food, especially at the premium end of the market.Ruralco has a diversified exposure to a range of end soft commodities through its rural merchandise, agency and trading businesses. The company's cost base is extremely lean, to the extent that it was still able to pay a reasonable dividend in times of unfavorable weather...Assuming a normal season, on our analysis, the company is trading on a reasonable PE of under 12 times and is yielding over 5.5% fully franked.