The Andersons Inc. – Value – Zacks Rank Buy
Source: http://www.zacks.com/commentary/12615/The+Andersons+Inc.+-+Value+-+Zacks+Rank+BuyPosted on Tuesday, November 3rd, 2009 | In Investing Lessons, Stocks to Watch
The Andersons, Inc. (ANDE) is scheduled to report third quarter earnings after the bell on Nov 4. Despite a slowdown in the agriculture sector analysts are bullish on the quarter and expect 2009 year over year earnings growth of 23.80%.
Company Description
The Andersons is an agribusiness company operating with five business segments: Grain and Ethanol Group; Rail Group; Plant Nutrients Group, Turf & Specialty Group and Retail Group.
The company has operations in 14 states including Puerto Rico and also has rail equipment leasing interests in Canada and Mexico.
Zacks Consensus Estimates Rise
The Andersons has missed on estimates 3 out of the last 4 quarters but analysts are bullish ahead of the Nov 4 third quarter results as both the quarterly and full year estimates have been rising.
The third quarter Zacks Consensus Estimate climbed 3 cents to 39 cents in the last 30 days.
The full-year Zacks Consensus Estimate is up 1 penny to $2.22 over the last month.
Grain Was the Standout Segment in the Second Quarter
Revenues fell to $811 million from $1.1 billion in the second quarter of 2008 but with sky high fertilizer prices in 2008, year over year comparisons will be hard to make. Two thirds of the income in the second quarter of 2008 came from the Plant Nutrient Group.
The grain business, however, had its third best second quarter mainly due to good space income. The ethanol business was also profitable in the quarter.
Economic conditions slammed the Rail Group as rail traffic fell sharply. Income fell to $0.6 million from $4.9 million in the year ago period.
In the second quarter results, the company believed the worst of the price declines in the nutrient group were behind it. We’ll find out this week with the third quarter results.
Value Fundamentals
The Andersons is a Zacks #1 Rank (strong buy) stock. It has a forward P/E of 14 and a price-to-book of 1.47. The company has a stellar average 5-year average return on equity (ROE) of 16.66%.
Additionally, the company also pays a dividend with a current yield of 1.10%.
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 About Tracey Ryniec (http://www.zacks.com/)
Tracey Ryniec is an Editor at Zacks Investment Research who covers the Value Stock for the Zacks Rank Buys and Timely Buy of the Week. |
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