The Andersons (NASDAQ: ANDE) is
a diversified firm, with 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 ten states and Puerto Rico, plus rail leasing interests in Canada and Mexico.
The firm pleased investors last week, when it boosted its FY08 EPS guidance from $3.65-$4.00 to $4.40-$4.80. Analysts had been looking for $3.79. Management attributed the favorable outlook to the improved performance of the Plant Nutrient Group.
ANDE shares
popped on the news and then moved into a bullish "flag" consolidation pattern. Prices frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Brokers recommend the issue with two "strong buys" and one "buy". The ANDE P/E ratio (11.36), Price to Sales ratio (0.28), Price to Book ratio (2.12), Price to Cash Flow ratio (8.00), Sales Growth rate (75.40%), Return on Equity (21.33%) and Revenue per Employee ($1.92M) compare favorably with industry, sector and S&P 500 averages. Institutions hold about 76% of the outstanding shares. Over the past 52 weeks, the stock has traded between $32.25 and $52.67. A stop-loss of $34.90 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. He does not hold a position in the stock discussed above.
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