Back to top

Analyst Blog

S&W Seed: Adding another 182 acres of production. Increasing target price.

SANW

 ZacksTrade Now

This page is temporarily not available.  Please check later as it should be available shortly. If you have any questions, please email customer support at support@zacks.com or call 800-767-3771 ext.  9339.

S&W Seed: Adding another 182 acres of production. Increasing target price.

By Ian Gilson, CFA

On January 7, 2013 S&W Seed (NasdaqCM:(SANW)) announced the acquisition of a half interest in 182 acres in the Imperial Valley, adjacent to the 1,880 acres that S&W Seed owns and leases in Calipatria, California. The cost was close to $9,000 an acre.

The land is currently under cultivation and will be used to grow alfalfa, mainly for the Middle Eastern and African markets. In past years these markets have accounted for over 80% of the company's annual revenue. Since the alfalfa can be harvested a few months before the Central Valley (from Stockton in the North to Bakersfield in the South and between I5 and Route 99) the seed will be available for shipment in time for planting in the Middle East.

S&W Seed does not have a significant penetration into the domestic market, which is highly competitive. The company's non-dormant varieties compete with both commodity and dormant seeds. The Imperial Valley (from the Dalton sea down to the Mexican border, Calipatria is less that 7 miles from the Salton Sea) prohibits growing genetically modified plants but is ideal for growing alfalfa. The Central Valley allows the cultivation of GMO varieties. However, it is very important not to get the GMO seeds mixed in with un-modified seeds since many countries prohibit the sales of GMO seeds. By keeping the growing and processing 450 miles apart there should be no problem.

This allows the company to grow GMO alfalfa in the Central Valley for sale in the USA and Canada (GMO alfalfa is not sold for human consumption) a market at least as large as the Middle East.


For additional research on small-cap stocks, please visit scr.zacks.com.

To become a subscriber to Zacks SCR and receive SCR blogs and research reports emailed directly to your inbox, please visit our Subscribe page.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

Learn more

Start for as little as $4.50 per trade.

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
DIXIE GRP IN DXYN 15.84 +7.90%
BOFI HLDG IN BOFI 85.30 +4.97%
RAMBUS INC RMBS 12.31 +4.41%
VIPSHOP HOLD VIPS 148.73 +4.35%
NETFLIX INC NFLX 345.74 +4.32%