Monday, September 26, 2011

Alliance Grain Traders Inc 2

I do not own this stock (TSX-AGT). I started following this stock a few years ago as it seemed like a promising stock. It was touted in the Money Show I attended in 2009.

Both the insider selling and insider buying on this stock are modest, with a net insider selling. So, the insider trading report does not tell us anything. Both the CEO and two members of the Arslan family own almost 25% of the outstanding shares. This has not changed since the last time I looked at this stock.

There are 43 institutions that own some 60% of this company currently. Over the past 3 months they have increased their position in this company by around 4%.

I get a 5 year median low Price/Earnings Ratio of 5.27. This is a very low ratio and it is so low because 2008 and 2009 has above normal earnings. The 5 year median high P/E Ratio is also low at 11.54. That makes the current one of 11.95 on a relative high side, but this is a rather low P/E Ratios, although low P/E Ratios are usually 10 and under, so this is just on the low side.

I get a Graham Price of $23.82. The current stock price of $20.43 is some 14% lower than this. The median difference between the Graham Price and stock price is the stock price being 24% lower and the high difference is the stock price 3% higher than the Graham price. By this measure, the stock price is reasonable.

I get a 6 year median Price/Book Value Ratio of 1.47 and a current one of 1.39. The current one is 95% of the 6 year median. The 5 year median P/B Ratio is higher at 1.83 and the current one is only 75% of the 5 year median. This shows a reasonable current stock price.

The current dividend yield is just 2.94% and the 5 year median is higher at 4.40%. Normally, this would show a rather high current stock price, but the dividend yield on all income trusts converted to corporations are coming down. This stock did well to maintain their dividends during conversion and to raise it after being flat for 3 years.

When I look at analysts’ recommendations, I find Strong Buy, Buy and Hold recommendations. Recommendations are rather evenly split over this three types and the consensus recommendation would be a Buy. A number of analysts like the fact that this is a global company and they feel it have good management.

Crops were apparently poor last year because of weather, but one analyst feels that the earnings will shortly be back to a more normal $2.50 next year. A couple of analysts remarked on the good balance sheet. (This company has little debt.)

It still looks like a good company and I will continue to track it.

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 Traders. 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.

1 comment:

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