Wednesday, July 10, 2013

Alliance Grain Traders Inc 2

On my other blog I am today writing about Middle East Christians ...continue...

I do not own this stock Alliance Grain Traders Inc. (TSX-AGT, OTC-AGXXF). I wanted to review all the income trust stocks touted in the 2009 Money Show. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yield. This stock has already converted to a corporation in 2009.

When I look at insider trading, I find some insider buying and no insider selling. The CEO has shares worth $75M and has options worth $2.7M. The CFO has shares worth $0.3M and has options worth $1.1M. An officer has shares worth $0.5M and has options worth $1.7M. A director has shares worth $0.1M and has no options. This is just to give you an idea on insider share ownership and option values.

The 5 year Price/Earnings Ratios are very low due to negative recent earnings. The 8 year low, median and high median Price/Earnings Ratios are 9.33, 10.99 and 12.66 seem more valid. The current P/E Ratio is 13.01 based on a stock price of 13.66 and 2013 earnings estimates $1.05. This shows a relatively high stock price. However, on an absolute basis a P/E of 13.66 is not particularly high.

I get a current Graham price of $17.87. The 10 year low, median and high median Price/Graham Price Ratios are 0.88, 0.96 and 1.10. The current P/GP Ratio is 0.76. This implies a relatively low stock price. Also, when the P/GP Ratio is 1.00 or below, it implies a stock price is absolutely low.

The 10 year median Price/Book Value per Share Ratio is 1.31. The current P/B Ratio is just 1.01, a value only some 77% of the 10 year median. This implies that the stock price is relatively low. A P/B Ratio below 1.50 is generally considered good.

The 5 year median dividend yield is 2.84%. The current dividend yield is 4.39%, a value that is 55% higher. This relatively high dividend yield points to a relatively cheap price.

When I look at analysts' recommendations, I find Strong Buy, Buy, Hold and Underperform recommendations. The consensus recommendation is a Buy. The 12 month consensus stock price is $14.80. This implies a total return of 12.74% with 4.39% from dividends and 8.35% from capital gains.

The company has had problems over the last few years, but analysts feel that the company is fundamentally sound. There is a report in the financial post from 2012 that talks a bit about this. E-research has a recent upbeat report on this company. Siemens says talks about recent re-ratings of this company by analysts. The Happy Capitalism site has a more technical take on this stock.

This certainly is an interesting company and the stock is quite cheap. See my spreadsheet at agt.htm.

This is the second of two parts. The first part was posted on Tuesday, July 9th, 2013 and is available here.

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.

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 or StockTwits.

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