Thursday 8 August 2013

Analysis of Agroton

Ukrainian agricultural company

Company: Agroton

Business: An agricultural Ukrainian company that is a diversified with the core business being crop production which means principally sunflower seeds and wheat, 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: Ukraine where they have 140000 acres of harvest area.

P/E: 1.3

There was made a very nice analysis by a fellow German blogger that can be seen here. It is however in German but contains a lot of useful information.

contrarian values of P/E, P/B, ROE as well as dividends

The P/E of Agroton is excellent with 1.3 and the P/B is completely crazy with 0.07! It gives a very clear buy according to Grahams formula. The earnings to sales a much better than for instance BEF and it is as high as 8%. The ROE should ideally be better but is currently 5.4. The book to debt like in both America as well as towards the east is very good with a ratio of 2.1. In the east they have simply been forced to keep money in the company because it was not easy to borrow. Their growth has in the last five years been a steady 3% per year and this gives us a motivated P/E of 13 to 15. Unfortunately they are not paying out any dividends but I am sure that if they keep this up they will soon start to shuffle out money to the owner.

Conclusion: Agroton is a very clear buy. The company has an excellent P/E and P/B with only the dividends downside. The company will be added to the list of interesting stocks when I update it the next time.


Anonymous said...

So, what happened to you investment in Agroton? It would be good to have your updated views.

Fredrik von Oberhausen said...

Unfortunately I did not manage to buy it. The first step I did was to increase my risk level on the stock account. Which meant I had to go to the highest risk to be allow to buy such a small stock and then the month after I had managed to do that I still could not buy them and ended up buying K+S instead. The problem there could be that my new risk level had yet not been updated.

Next time I will buy stocks I will try to buy it again. Unfortunately by the look of it that will take a couple of months... :(