Wednesday, May 3, 2017

Ag Growth International

Sound bite for Twitter and StockTwits is: Buy for Diversification. They have the revenue, now what they did to do is make a profit from the revenue. In 2016 the comprehensive income was higher than the net income, so this is a good sign. Price testing is all over the place so waiting to see how they do with EPS in the first quarter of 2017 before buying would be a strategy that I would use. See my spreadsheet on Ag Growth International .

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.

Some good things have happened since I bought this stock. I have earned a total return of 13.40% per year with 7.06% from capital gains and 6.34% from dividends. Also the dividends paid have paid for 36% of my stocks cost. In the future the dividends will be lower.

The things that I do not like are that earnings have not been very good and dividends have been flat since I bought this stock in 2011. Prior to 2011 dividends were being increased. Analysts do not see any dividends increases for this stock over the next couple of years. They do feel that there will be rising EPS which is a start. However, analysts thought that EPS for 2016 would be $2.46 and it came in at $1.29. It has been a long slow recovery since 2008. This is an industrial stock and volatility should be expected in Earnings.

The shares have been increasing by 3.6% and 2.9% per year over the past 5 and 10 years. To see if the company has growth, you need to look at the per share values. For example, the Revenue growth over the past 5 and 10 years is at 11.7% and 20.65 per year. The Revenue per Share has grown by 7.9% and 17.2% per year over the past 5 and 10 years.

The 5 year low, median and high median Price/Earnings per Share Ratios are 19.20, 25.47 and 30.62. The corresponding 10 year values are 14.42, 21.36 and 26.87. The historical ones are 11.69, 16.43 and 22.90. It would appear that the rising stock price is due to increasing P/E Ratios. The EPS has not done well recently, but it is expected to improve. The current P/E Ratio is 17.06 based on a stock price of $55.43 and 2017 EPS estimate of $3.24. This stock price testing suggests that the stock price is relatively reasonable.

I get a Graham Price of $34.29. The 10 year low, median and high median Price/Graham Price Ratios are 1.14, 1.56 and 1.98. The current P/GP Ratio is 1.62 based on a stock price of $55.43. This stock price testing suggests that the stock price is relatively reasonable and around the median.

I get a 10 year Price/Book Value per Share Ratio of $2.58. The current P/B Ratio is 3.45 based on a stock price of $55.43 and BVPS of $16.08. The current P/B Ratio is some 34% above the 10 year median ratio. This stock price testing suggests that the stock price is relatively expensive.

Because this stock used to be an income trust, you cannot use the historical median dividend yield to judge the current stock price. The 5 year median dividend yield is 5.86%. The current dividend yield is 4.33% based on dividends of $2.40 and a stock price of $55.43. The current dividend yield is some 26% above the 5 year median dividend yield. This stock price testing suggests that the stock price is relatively expensive.

I get a P/S Ratio of 1.53. The current P/S Ratio is 1.04 based on a stock price of $55.43 and Revenue estimate for 2017 of $785 or Revenue per Share of $33.11. The current P/S Ratio is some 32% below the 10 year ratio. This stock price testing suggests that the stock price is relatively cheap.

When I look at the analysts' recommendations, I find Buy and Hold recommendations. Most of the recommendations are a Buy and the consensus recommendation is a Buy. The 12 month stock price is $58.88. This implies a total return of 10.55 with 6.225 from capital gains and 4.33% from dividends.

On this Market Wired Press Release the company talks about a new issue of convertible debentures. This site of Davidson Register gives some tech analysis on this stock. The Value Composite score of 53 says that the stock is neither overpriced nor underpriced. Daniel Jordon on Sports Perspectives says that Royal Bank has raised the target price of this stock to $60.00. See what analysts are saying about this stock on Stock Chase . Stephen Takacsy thinks it is good way to play the agricultural sector. This is the reason I bought this stock.

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 International .

The last stock I wrote about was about Thomson Reuters Corp. (TSX-TRI, NYSE-TRI)... learn more. The next stock I will write about will be Automodular Corp. (TSX-AM.H, OTC-AMZKF)... learn more on Friday, May 5, 2017 around 5 pm. Tomorrow on my other blog I will write about Something to Buy May 2017... learn more on Thursday, May 4, 2017 around 5 pm.

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.

See my website for stocks followed and investment notes. I have three blogs. The first talks only about specific stocks and is called Investment Talk. The second one contains information on mostly investing and is called Investing Economics Mostly. My last blog is for my book reviews and it is called Non-Fiction Mostly. Follow me on Twitter or StockTwits. I am on Instagram. Or you can just Google #walktoronto spbrunner8166 to see my pictures.

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