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Here's Why You Should Add Andersons (ANDE) to Your Portfolio
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The Andersons, Inc. (ANDE - Free Report) looks promising at the moment backed by its focus on improving plant-production efficiency and cost-saving efforts. Favorable operating environment for the company’s Grain group and benefits from the tax reform are also aiding the stock.
We believe this is the right time to add the stock to your portfolio, as it is poised to carry the bullish momentum ahead. Let's delve deeper and analyze the factors that make this grain merchandiser an attractive investment option.
The company also flaunts a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2, offer the best investment opportunities. Thus, the company appears to be a potential investment option at the moment.
Faring Better than the Industry: Over the past year, Andersons has outperformed the industry it belongs to. The company’s shares have gained 14%, as against the 53% decline recorded by the industry.
Upward Estimate Revisions: The Zacks Consensus Estimate for earnings per share for 2018 has moved up 7% to $1.88 in the last 60 days.
Superior Return on Assets (ROA): Andersons' ROA of 1.9%, as compared with the industry average of 1.4%, highlights the company's efficiency in generating earnings by effectively managing assets.
Growth Drivers in Place: Andersons expects that its 2018 net income will be significantly better than the adjusted 2017 results. It will benefit from a substantial decline in its effective tax rate. The enactment of the tax reform in December 2017 has reduced the federal income tax rate from 35% to 21%. Andersons reaffirmed its effective tax rate of 23-25% for the current year.
In addition, Andersons anticipates that operating environment for its Grain group will remain solid through second-half 2018 on the back of optimism in the U.S. corn and soybean crop conditions. The company also remains focused on the latest run-rate additional savings goal of $7.5 million this year, which is expected to be achieved by the end of 2018.
Notably, Andersons’ Ethanol Group continues to succeed in driving plant-production efficiency. The group has been able to lock in forward margins on almost half of third-quarter 2018 production and small amounts for the next two quarters. In addition to closely monitoring progress of the new ELEMENT plant currently under construction, the group continues to evaluate projects which will enhance plant efficiency and produce higher-value co-products.
Other Stocks to Consider
Some other top-ranked stocks in the sector include Ingevity Corporation (NGVT - Free Report) , Trinseo S.A. (TSE - Free Report) , and Air Products and Chemicals, Inc. (APD - Free Report) . While Ingevity and Trinseo sport a Zacks Rank #1, Air Products carries a Zacks Rank #2.
Ingevity has a long-term earnings growth rate of 12%. The stock has appreciated 75% in a year’s time.
Trinseo has a long-term earnings growth rate of 12%. Its shares have improved 15% over the past year.
Air Products has a long-term earnings growth rate of 16.2%. The company’s shares have gained 13% during the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Here's Why You Should Add Andersons (ANDE) to Your Portfolio
The Andersons, Inc. (ANDE - Free Report) looks promising at the moment backed by its focus on improving plant-production efficiency and cost-saving efforts. Favorable operating environment for the company’s Grain group and benefits from the tax reform are also aiding the stock.
We believe this is the right time to add the stock to your portfolio, as it is poised to carry the bullish momentum ahead. Let's delve deeper and analyze the factors that make this grain merchandiser an attractive investment option.
What’s Working in Favor of Andersons?
Impressive Rank & VGM Score: Andersons currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The company also flaunts a Value Growth Momentum Score (VGM Score) of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or #2, offer the best investment opportunities. Thus, the company appears to be a potential investment option at the moment.
Faring Better than the Industry: Over the past year, Andersons has outperformed the industry it belongs to. The company’s shares have gained 14%, as against the 53% decline recorded by the industry.
Upward Estimate Revisions: The Zacks Consensus Estimate for earnings per share for 2018 has moved up 7% to $1.88 in the last 60 days.
Superior Return on Assets (ROA): Andersons' ROA of 1.9%, as compared with the industry average of 1.4%, highlights the company's efficiency in generating earnings by effectively managing assets.
Growth Drivers in Place: Andersons expects that its 2018 net income will be significantly better than the adjusted 2017 results. It will benefit from a substantial decline in its effective tax rate. The enactment of the tax reform in December 2017 has reduced the federal income tax rate from 35% to 21%. Andersons reaffirmed its effective tax rate of 23-25% for the current year.
In addition, Andersons anticipates that operating environment for its Grain group will remain solid through second-half 2018 on the back of optimism in the U.S. corn and soybean crop conditions. The company also remains focused on the latest run-rate additional savings goal of $7.5 million this year, which is expected to be achieved by the end of 2018.
Notably, Andersons’ Ethanol Group continues to succeed in driving plant-production efficiency. The group has been able to lock in forward margins on almost half of third-quarter 2018 production and small amounts for the next two quarters. In addition to closely monitoring progress of the new ELEMENT plant currently under construction, the group continues to evaluate projects which will enhance plant efficiency and produce higher-value co-products.
Other Stocks to Consider
Some other top-ranked stocks in the sector include Ingevity Corporation (NGVT - Free Report) , Trinseo S.A. (TSE - Free Report) , and Air Products and Chemicals, Inc. (APD - Free Report) . While Ingevity and Trinseo sport a Zacks Rank #1, Air Products carries a Zacks Rank #2.
Ingevity has a long-term earnings growth rate of 12%. The stock has appreciated 75% in a year’s time.
Trinseo has a long-term earnings growth rate of 12%. Its shares have improved 15% over the past year.
Air Products has a long-term earnings growth rate of 16.2%. The company’s shares have gained 13% during the past year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>