Wednesday, August 18, 2010

Alliance Grain Traders Inc 2

I started to follow this company (TSX-AGT) last year, as it was an Income Trust that converted to a corporation. It was one that different people thought would do very well after conversion. The dividends were kept at the rate established when it was an Income Trust. The company used to be called Agtech Income Fund and it converted to a corporation in September 2009.

With depressing regularity, I see that there is insider selling going on under this stock. Over the past year, there has only been insider selling and no insider buying. Insider selling totals $2.6M, but this is about ½ of 1% of the market cap for this stock. Insiders do not even seem to be holding on to stock options granted. This all may be depressing, but it does not tell us much.

Is the stock a good relative price? 5 year average low and high P/E is 10 and 14, so a current P/E of 10 is low, both relatively and absolutely. The current stock is of $30.03 is some 15% below the current Graham Price of $35.29, so this also shows a good stock price.

However, the 5 year average Price/Book Value ratio is 1.47 compared to the current one of 1.63 and this shows a relatively average stock price. The last item is the yield and at 1.8% it is below almost all the Dividend yields prior to this and this shows that the stock price is relatively high. However, dividends have not increased since 2008 and this will partially account for the low dividend yield.

There are not many analysts following this stock. Most ratings are for Strong Buy, with some Buy ratings and one Hold rating. The consensus recommendation would be a Strong Buy. (See my site for information on analyst ratings.) The analysts I looked at really liked this stock and thought it still could go much higher over the long term. They also mention that they thought it had a strong management team. Another blog called Investing Thesis has also covered this stock.

I am going to keep an eye on this stock. However, at this point, I will wait until the fall to decide what stocks I will purchase for this year.

Alliance Grain Traders Inc through its subsidiaries, Alliance Pulse Processors Inc. ("Alliance") and Arbel Group ("Arbel"), is engaged in the business of sourcing and processing (cleaning, splitting, sorting and bagging) specialty crops, primarily for export markets. Alliance and its subsidiaries in Canada, U.S., Australia and Turkey handle the full range of pulses and specialty crops including lentils, peas, chickpeas, beans and canary seed through six processing plants. The company recent bought the Arbel Group of Mersin, Turkey. Its web site is here Alliance Grain . See my spreadsheet at agt.htm

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website for stocks followed and investment notes. Follow me on twitter.

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