Ag Growth International 2

Sound bite for Twitter and StockTwits is: Price would seem expensive. I still think that this stock will do well in the longer term. However, it would seem at the moment the stock price is relatively expensive. Also the stock no longer has any momentum and seems to be trading in a range. See my spreadsheet at afn.htm.

I own this stock of Ag Growth International (TSX-AFN, OTC-AGGZF). I wanted to review all the income trust stocks touted in the Money Show of 2009. There was a lot of talk at this show about some of the Unit Trust being currently good buys with very good yields. Its median yield in 2009 was 7.9%. It was on the Canadian Dividend Aristocrats and this is why I first investigated this company.

Over the past year in insider trading, there was no insider buying and no insider selling. Outstanding shares were increased by 15,000 shares or 0.12% for stock options. These options had a book value o4 $0.7M and were worth around $0.9M at the end of 2014.

There is some insider ownership with the CEO owning shares worth around $7.6M and the chairman owning shares worth around $3.8M. These two own around 1.5% of the outstanding shares of the company.

The 5 year low, median and high median Price/Earnings per Share Ratios are 17.22, 21.44 and 28.08. The corresponding 10 year values are lower at 13.02, 18.86 and 24.27. The current P/E Ratio is 30.79 based on 2015 EPS estimate of $1.70 and a stock price of $52.35. This $1.70 2015 EPS estimate is a lot higher than the EPS of 2014 which was $0.31 and a lot lower than the 2016 EPS estimate of $3.27. Currently this stock price test says the stock price is relatively expensive.

I get a current Graham Price of $24.49. The 10 year low, median and high median Price/Graham Price Ratios are 1.00, 1.49 and 1.93. The current P/GP Ratio is 2.14 based on a stock price of $52.35. This stock price testing suggests that the stock price is relatively expensive.

I get a 10 year Price/Book Value per Share of 2.43. The current P/B Ratio is 3.34 a value some 27% higher. The current P/B Ratio is based on a stock price of $52.35 and BVPS of $15.68. This stock price testing suggests that the stock price is relatively expensive.

This stock used to be an Income Trust company, so I do not think that you can do any check of current dividend yield to historical dividend yields. However, the 5 year median dividend yield is 5.78% and the current dividend yield at 4.58% is some 21% lower. The current dividend yield is based on dividends of $2.40 and a stock price of $52.35. This stock price testing suggests that the stock price is relatively expensive.

The 10 year Price/Cash Flow per Share Ratio is 9.64. The current P/CF Ratio is 11.74 a value some 22% higher. The current P/CF Ratio is based on 2015 CFPS estimate of $4.46 and a stock price of $52.35. This stock price testing suggests that the stock price is relatively expensive.

It is only with Revenue that the stock price looks good. The 10 year Price/Sales Ratio is 1.69 and the current P/S Ratio is 1.22. The current P/S Ratio is based on 2015 Revenue estimate of $563M and Revenue per Share estimate of $42.76. The current P/S Ratio is some 28% lower than the 10 year P/S Ratio. This stock price testing suggests that the stock price is relatively cheap. However, current this stock only really has revenue growth. There is not much in EPS growth and only moderate cash flow growth.

When I look at analysts' recommendations, I find Strong Buy, Buy and Hold recommendations. The consensus would be a Buy as most of the recommendations are a Buy. The 12 month stock price consensus is $58.60. This implies a total return of $16.52% with 11.94% from capital gains and 4.58% from dividends. This is based on a current price of $52.35.

The acquisition of Westeel was announced in World-Gran.com recently. Analysts feel this is a positive for this company. The Legacy talks about analysts ratings on this stock.

This is the second of two parts. The first part was posted on Wednesday, June 03, 2015 and is available here. The first part talks about the stock and the second part talks about the stock price.

Ag Growth International (AGI) is a leading manufacturer of portable and stationary grain handling, storage and conditioning equipment, including augers, belt conveyors, storage bins, handling accessories and aeration equipment. AGI has manufacturing facilities in Canada, the United States, the United Kingdom and Finland. Its web site is here AG Growth.

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. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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