Friday 5 September 2014

Analysis of Agroton 2014

Agroton, an Ukrainian agricultural company

Company: Agroton

ISIN US00855P2092 | WKN A0YBZZ

Business: An Ukrainian agricultural company that is a diversified with the core business being crop production which means principally sunflower seeds (#1 in Ukraine) and wheat (#4 in Ukraine), they also have the processing, storage and sale of such crops. In addition, the Group is engaged in livestock (chicken, beef, pork) and food processing (milk, cheese, bread etc.).

Active: Eastern Ukraine currently harvesting 151,000 hectares.

P/E: -4.1 (P/E5: 4.8)

Here you can find the previous analysis of Agroton.

The P/E of Agroton, due to losses in 2013, are bad with -4.1, however the P/E5 is at 4.8 which is acceptable. The P/B is excellent with 0.2. Due to the negative P/E Graham gives a no go signal on Agroton. The earnings to sales were of course bad, and the ROE as well. The book to debt is excellent with 1.9.
In the last six years they have had a mediocre yearly revenue growth rate of 1.1% which does not even beat inflation and this then gives us a motivated P/E of 8 to 10 which means that it is still undervalued on the market.
They pay no dividend which I of course do not like at all.

Conclusion: Graham says no and I am less happy about Agroton today then what I used to be, which is not a big surprise since the share price has almost doubled since the last analysis. The P/E5 is still good, the P/B is excellent but I do not like the ROE and the dividend. Due to the changes from this analysis Agroton is still on the Stocks of Interest list but jumped down several positions which you can see in the live update.

If this analysis is outdated then you can request a new one.

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