On Apr 12, Zacks Investment Research upgraded
The Andersons Inc.
), a diversified company operating in six different business
segments ranging from buying, selling and storing grain to
leasing railcars and running retail stores catering to the latest
home hardware needs, to a Zacks Rank #1 (Strong Buy).
ARCHER DANIELS (ADM): Free Stock Analysis
ANDERSONS INC (ANDE): Free Stock Analysis
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Why the Upgrade?
The share price and earnings estimates of Andersons have been
trending upward, following its record fourth-quarter 2013 results
on Feb 12. Adjusted earnings moved up an impressive 104% to $1.08
from 53 cents (adjusted to reflect the company's Feb 2014
three-for-two stock split) earned in the year-ago quarter.
Results beat the Zacks Consensus Estimate of $1.05, delivering a
positive earnings surprise of 2.86%, the third straight quarter
of a positive earnings surprise.
For full-year 2013, Andersons reported earnings per share of
$3.18, up 12.7% from $2.82 (adjusted to reflect the company's Feb
2014 three-for-two stock split) in 2012. Segment wise, the
Ethanol Group had record operating income in 2013 and a best ever
fourth quarter, reversing the loss incurred in the prior-year
comparable period, attributed to strong ethanol margins. The Rail
Group was close to the record 2012 results. The Turf and
Specialty Group had a record year, with more than double the
prior-year results. Despite unfavorable impacts of the 2012
drought, the Grain Group performed well, helped by strong
earnings of the Lansing Trade Group.
Andersons will benefit from its activities on the acquisition
front in 2013. The acquisition of Blenheim, Ontario-based
Thompsons Ltd., a grain and food-grade bean handler and Mile
Rail, LLC, a provider of agronomy input as well as railcar repair
and cleaning equipment will be accretive to earnings for
full-year 2014. In December, Andersons finalized the acquisition
of the granulation manufacturer, Cycle Group, Inc. The company
purchased the assets of Cycle Group to geographically expand the
Turf & Specialty Group's granulation business. In addition,
the acquisition will increase the company's production and
distribution capabilities in the high-value markets of the
granular business and help to serve customers better.
The Agricultural Group is expected to benefit from the record
corn crop seen in 2013 and the anticipated sizable corn crop in
2014. The Rail, Grain and Plant and Nutrients Groups are also
expected to perform well. Though margins have improved in the
ethanol business, the company remains cautious as the ethanol
market will continue to be volatile. In addition, Andersons'
stock split and dividend distribution program will drive growth
in the future.
Over the last 60 days, the Zacks Consensus Estimate for 2014 has
gone up 5% to $4.00 per share as all of the 4 estimates have
moved upward. Over the same time frame, the Zacks Consensus
Estimate for 2015 has gone up 2.3% to $4.01 per share as 2 out of
3 estimates have been revised upward.
Other Stocks to Consider
Some other stocks worth considering in the sector include
Gruma S.A.B. de CV
Archer Daniels Midland Company
CVR Partners, LP
), all of which carry a Zacks Rank #2 (Buy).