Diversification is often a key to success in business and there are few firms that can claim to have implemented that wisdom more broadly than a certain outfit in Maumee, Ohio. Among the many things they will sell you are ethanol, animal bedding products, filtration systems, fertilizers, electrical supplies, wine and a box car.
Andersons (NASDAQ: ANDE) serves interests in the U.S. agriculture, transportation and retail markets. Its Grain & Ethanol Group purchases and merchandises grain, operates grain elevator facilities, manages ethanol production facilities and engages in grain and ethanol trading. The Rail Group buys, sells, leases, rebuilds, and repairs various types of used railcars and rail equipment. The Retail Group offers hardware, plumbing, electrical, and building supplies, as well as specialty foods and wines. The Plant Nutrient and Turf & Specialty Groups formulate fertilizers. The company has operations in seven midwestern states, plus rail leasing interests in Canada and Mexico. Archer-Daniels-Midland (NYSE: ADM) is a major competitor.
The firm pleased investors last week, when it guided 2007 EPS from $2.35-$2.60 to $2.80-$3.05. Analysts had been
looking for $2.66. The CEO said the increase was due to strong Q2 performances in the company's agricultural businesses and the beginning of ethanol production at a new Clymers, Indiana plant. ANDE shares popped on the news and have now begun to define a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling when they entered them. In this case, that would be to the upside.
Brokers recommend the shares with one "strong buy", two "buys" and four "holds". The ANDE P/E ratio 18.78, Price to Sales ratio (0.51), Price to Book ratio (2.91), Price to Cash Flow ratio (12.16), Sales Growth rate (45.74%), EPS Growth rate (104.00%) and Revenue per Employee ($1.24M) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 73 percent of the outstanding shares. Over the past 52 weeks, the stock has traded between $31.05 and $48.46. A stop-loss of $39.00 looks good here. Note that the firm is next expected to report quarterly results in early August.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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Reader Comments (Page 1 of 1)
6-26-2007 @ 2:37PM
Michael Schneider said...
The alternative energy stocks seemed to correlate with oil prices until recently. Oil prices are down today and inventories tomorrow are expected to be bearish. On the other hand, alternative energy stocks in areas like solar power have perked up in the past days on political positives. I'd definitely be taking a look here once oil settles and maybe before. Those interested in alternative energy can find analyst comments on 3 solar stock picks at (left side) http://www.Barrelomoney.com.