Ag Growth International (TSX:AFN) - Share price, News & Analysis

AFN fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	1/6
Financial Health	1/6
Dividends	1/6

AFN Stock Overview

Rewards

Trading at 69.1% below our estimate of its fair value

Earnings are forecast to grow 35.16% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Ag Growth International Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Ag Growth International
Historical stock prices
Current Share Price	CA$33.16
52 Week High	CA$44.24
52 Week Low	CA$25.85
Beta	2.35
1 Month Change	-18.02%
3 Month Change	-13.74%
1 Year Change	-21.05%
3 Year Change	-37.88%
5 Year Change	-42.79%
Change since IPO	228.97%

Shareholder Returns

	AFN	CA Machinery	CA Market
7D	-9.5%	1.6%	2.8%
1Y	-21.0%	-40.0%	5.9%

Return vs Industry: AFN exceeded the Canadian Machinery industry which returned -39.9% over the past year.

Return vs Market: AFN underperformed the Canadian Market which returned 4.3% over the past year.

Price Volatility

Is AFN's price volatile compared to industry and market?
AFN volatility
AFN Average Weekly Movement	6.9%
Machinery Industry Average Movement	9.8%
Market Average Movement	9.8%
10% most volatile stocks in CA Market	16.7%
10% least volatile stocks in CA Market	4.2%

Stable Share Price: AFN is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: AFN's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1996	n/a	Tim Close	https://www.aggrowth.com

Ag Growth International Inc., together with its subsidiaries, manufactures and distributes grain and rice handling, storage, and conditioning equipment in Canada, the United States, and internationally. The company offers storage equipment comprising grain and bolted bins, hopper bins, smooth wall bins, temporary storage equipment, unloads and sweeps, water tanks, fuel tanks; and conditioning equipment, such as mixed flow dryers, fans and heaters, aerations, airaugers, aeration floors, vents and exhausters, stirrings, and accessories. It also provides portable handling equipment, such as portable augers, conveyors, grain vacs, post pounders, seed treaters, and accessories; and permanent handling equipment, including bucket elevators, chain and belt conveyors, enclosed belt conveyors, distributors, feed handling equipment, screw feeders and conveyors, and spouts and connections.

Ag Growth International Fundamentals Summary

How do Ag Growth International's earnings and revenue compare to its market cap?
AFN fundamental statistics
Market Cap	CA$604.03m
Earnings (TTM)	CA$13.03m
Revenue (TTM)	CA$1.23b

48.1x

P/E Ratio

0.5x

P/S Ratio

Is AFN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
AFN income statement (TTM)
Revenue	CA$1.23b
Cost of Revenue	CA$924.25m
Gross Profit	CA$310.32m
Other Expenses	CA$297.30m
Earnings	CA$13.03m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.69
Gross Margin	25.14%
Net Profit Margin	1.06%
Debt/Equity Ratio	336.5%

How did AFN perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

87%

Payout Ratio

Valuation

Is Ag Growth International undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: AFN (CA$33.16) is trading below our estimate of fair value (CA$107.32)

Significantly Below Fair Value: AFN is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: AFN is poor value based on its PE Ratio (48.1x) compared to the Canadian Machinery industry average (28.5x).

PE vs Market: AFN is poor value based on its PE Ratio (48.1x) compared to the Canadian market (11.4x).

Price to Earnings Growth Ratio

PEG Ratio: AFN is poor value based on its PEG Ratio (1.4x)

Price to Book Ratio

PB vs Industry: AFN's PB Ratio (2.2x) is in line with the CA Machinery industry average.

Future Growth

How is Ag Growth International forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

35.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: AFN's forecast earnings growth (35.2% per year) is above the savings rate (1.6%).

Earnings vs Market: AFN's earnings (35.2% per year) are forecast to grow faster than the Canadian market (7.4% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: AFN's revenue (6.1% per year) is forecast to grow slower than the Canadian market (6.3% per year).

High Growth Revenue: AFN's revenue (6.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: AFN's Return on Equity is forecast to be high in 3 years time (23%)

Past Performance

How has Ag Growth International performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-38.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: AFN has a large one-off loss of CA$16.2M impacting its March 31 2022 financial results.

Growing Profit Margin: AFN became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: AFN's earnings have declined by 38.5% per year over the past 5 years.

Accelerating Growth: AFN has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: AFN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Machinery industry (32.5%).

Return on Equity

High ROE: AFN's Return on Equity (4.5%) is considered low.

Financial Health

How is Ag Growth International's financial position?

Financial Health Score

1/6

Financial Health Score 1/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: AFN's short term assets (CA$652.6M) exceed its short term liabilities (CA$465.6M).

Long Term Liabilities: AFN's short term assets (CA$652.6M) do not cover its long term liabilities (CA$961.6M).

Debt to Equity History and Analysis

Debt Level: AFN's net debt to equity ratio (315.5%) is considered high.

Reducing Debt: AFN's debt to equity ratio has increased from 135.7% to 336.5% over the past 5 years.

Debt Coverage: AFN's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: AFN's interest payments on its debt are not well covered by EBIT (1.4x coverage).

Balance Sheet

Dividend

What is Ag Growth International current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.81%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: AFN's dividend (1.81%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: AFN's dividend (1.81%) is low compared to the top 25% of dividend payers in the Canadian market (4.99%).

Stability and Growth of Payments

Stable Dividend: AFN's dividend payments have been volatile in the past 10 years.

Growing Dividend: AFN's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: At its current payout ratio (86.6%), AFN's payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: AFN is paying a dividend but the company has no free cash flows.

Next Steps

Explore strong dividend paying companies in the Capital Goods industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

5.8yrs

Average management tenure

CEO

Tim Close (47 yo)

7.17yrs

Tenure

CA$3,888,616

Compensation

Mr. Tim Close, CFA has been the President and Chief Executive Officer of Ag Growth International Inc. since March 02, 2015 and January 1, 2016 respectively. Mr. Close served as Senior Vice President of Str...

CEO Compensation Analysis

Compensation vs Market: Tim's total compensation ($USD3.03M) is above average for companies of similar size in the Canadian market ($USD987.80K).

Compensation vs Earnings: Tim's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: AFN's management team is seasoned and experienced (5.8 years average tenure).

Board Members

Experienced Board: AFN's board of directors are considered experienced (9.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: AFN insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31