The Andersons, Inc., together with its subsidiaries, engages in the grain, ethanol, plant nutrient, railcar leasing, turf and cob products, and retailing businesses in the United States and internationally.
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Andersons's earnings available for a low price, and how does
this compare to other companies in the same industry?
Andersons is overvalued based on earnings compared to the US Consumer Retailing industry average.
Andersons is overvalued based on earnings compared to the US market.
Price based on expected Growth
Andersons's expected growth come at a high price?
Andersons is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on
Andersons is good value based on assets compared to the US Consumer Retailing industry average.
Discounted cash flow (2 Stage Free Cash Flow to Equity)
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is
limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($981,845,992).
The risk free rate of
2.47% is from the 10 year government bond rate in
The bottom-up beta is estimated by analysing other companies in the same
The Equity Risk Premium is calculated by subtracting the risk free rate from
the market return premium (7.53%) (source: Buffet).
The dividend discount model is automatically used for companies in the
following industries: Banks, Insurance, Real Estate Investment Trusts (REITs),
Diversified Financial Services and Capital Markets.
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Andersons's earnings growth is expected to exceed the low risk savings rate of 4.5%.
Growth vs Market Checks
Andersons's earnings growth is expected to exceed the US market average.
Andersons's revenue growth is positive but not above the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
High Growth Checks
Andersons's earnings are expected to grow significantly at over 20% yearly.
Andersons's revenue is expected to grow by 2.1% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return
(profit) compared to the available
funds. We do this looking forward 3 years.
Andersons is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
Andersons's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Patrick E. Bowe, also known as Pat, has been Chief Executive Officer, President and Director of The Andersons, Inc. since November 2, 2015. Mr. Bowe served as Corporate Vice President of Cargill, Incorporated until September 2015. Mr. Bowe has more than 35 years of experience in the agricultural sector. He served as the President of Cargill Sweeteners North America. In this position, he was responsible for all aspects of Cargill’s sweeteners business. He has extensive experience in leading large organizations with particular expertise in commodity and futures trading, acquisitions and joint ventures, process improvement, strategic sourcing, capital management and establishing and maintaining strong customer relationships. Mr. Bowe served as a Director of The Schwan Food Company, Inc. since October 2009. He served as a Non-Executive Director of Global Bio-chem Technology Group Company Limited from February 5, 2002 to September 29, 2010. He holds a Master’s degree in Economics from Stanford University, the United States.
Pat's compensation has been consistent with company performance over the past year.
Pat's compensation is higher than average for a company of this size and profit level.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Andersons management team is over 5 years, this suggests they are a seasoned and experienced team.
Chief Financial Officer
Vice President of Human Resources
Senior Director of Rail
President of Grain Group
Chief Information Officer
Senior Manager of Corporate Communications
VP & Corporate Controller
President of Retail Group
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Andersons board of directors is over 10 years, this suggests they are a seasoned and experienced board.
At $31.3, Is It Time To Buy The Andersons Inc (NASDAQ:ANDE)?
A question to answer is whether Andersons's current trading price of $31.3 reflective of the actual value of the small-cap? … And if you believe Andersons should be trading in this range, then there isn’t much room for the share price grow beyond what it’s currently trading. … ANDE’s future growth appears to have been factored into the current share price, with shares trading around its fair value.
How Financially Strong Is The Andersons Inc (NASDAQ:ANDE)?
At this stable level of debt, ANDE's cash and short-term investments stands at $62.6M , ready to deploy into the business. … Moreover, ANDE has generated cash from operations of $39.6M during the same period of time, leading to an operating cash to total debt ratio of 8.06%, indicating that ANDE’s current level of operating cash is not high enough to cover debt. … Maintaining a high level of debt, while revenues are still below costs, can be dangerous as liquidity tends to dry up in unexpected downturns.Next Steps: ANDE’s cash flow coverage indicates it could improve its operating efficiency in order to meet demand for debt repayments should unforeseen events arise.
The Andersons Inc (NASDAQ:ANDE): Dividend Is Coming In 3 Days, Should You Buy?
Check out our latest analysis for Andersons 5 checks you should do on a dividend stock If you are a dividend investor, you should always assess these five key metrics: Is it paying an annual yield above 75% of dividend payers? … NasdaqGS:ANDE Historical Dividend Yield Dec 25th 17 How does Andersons fare? … However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities.
What Is The Andersons Inc's (ANDE) Share Price Doing?
The stock’s ratio of 1.4x is currently trading slightly below its industry peers’ ratio of 2.4x, which means if you buy ANDE today, you’d be paying a relatively fair price for it. … Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. … If you’ve been keeping an eye on ANDE, now may not be the most optimal time to buy, given it is trading around its fair value.
The Andersons, Inc., together with its subsidiaries, engages in the grain, ethanol, plant nutrient, railcar leasing, turf and cob products, and retailing businesses in the United States and internationally. It operates through five segments: Grain, Ethanol, Rail, Plant Nutrient, and Retail. The Grain segment operates grain elevators; stores grains; and provides grain marketing, risk management, and corn origination services. The Ethanol segment purchases and sells ethanol; and offers facility operations, risk management, and ethanol and corn oil marketing services to the ethanol plants. The Rail segment leases, sells, and repairs various types of railcars, locomotives, and barges; provides fleet management services to private railcar owners; and invests in short-line railroad, as well as offers metal fabrication services. The Plant Nutrient segment manufactures, distributes, and retails agricultural and related plant nutrients, corncob-based products, and pelleted lime and gypsum products; and crop nutrients, crop protection chemicals, and seed products, as well as provides application and agronomic services to commercial and family farmers. This segment also offers warehousing, packaging, and manufacturing services to nutrient producers and other distributors; and manufactures and distributes nitrogen reagents for air pollution control systems. In addition, this segment produces professional turf care products for golf course and turf care markets; and fertilizer and control products to merchandisers, independent retailers, and other lawn fertilizer manufacturers, as well as provides contract manufacturing of fertilizer and control products. The Retail segment operates retail stores; a specialty food store; a distribution center; and engages in lawn and garden equipment sales and service activities. The Andersons, Inc. was founded in 1947 and is based in Maumee, Ohio.
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