Andersons Going Strong

The Andersons, Inc. (ANDE - Analyst Report) is a well diversified company with interests in the grain, ethanol and plant nutrient sectors, as well as in railcar leasing and repair, turf products production, and general merchandise retailing.

Andersons’ grain business is benefiting from increased space income. Given its positive outlook for the grain business, the company is keen on increasing its storage capacity. The company recently added 4 million bushels of capacity, expanding the company’s total grain storage capacity to more than 101 million bushels.

In addition, Andersons is working on expanding the capacity at two of its existing facilities. The company said that each facility will increase its capacity by 750,000 bushels within the next few months. The company seeks to expand its presence into new markets through storage agreements, leases and acquisitions.

Andersons’ focus on value-added proprietary products extended product lines in the Turf & Specialty Group is proving to be successful. The group’s operating income increased 56% in the first half. Management believes that its proprietary product strategy will lead to continued growth in the group’s profits.

In the Plant Nutrient Group, the company recently acquired the fertilizer business of Hartung Brothers, Inc. This acquisition extends the company’s footprint into the Western Corn Belt and increases the overall Plant Nutrient capacity by nearly 20%.

This along with the acquisition of Douglass Fertilizer & Chemical, Inc. and three pelleted lime production facilities in Ohio, Illinois and Nebraska in 2008, reflect the successful progression of the Plant Nutrient Group’s growth initiative. Also, the company continues to look for potential acquisition opportunities to expand its Rail business.

Given the significant growth potential in most of its businesses, we believe Andersons’ stock will outperform the market.

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