The Andersons, Inc. (ANDE - Free Report) touched a new 52-week low during trading session on Aug 21. The company’s stock fell to as low as $31.15, eventually closing at $31.25.
Andersons' shares have declined 13.5% for the last year against the industry’s gain of 8.5%.
Notably, Andersons’ Ethanol Group continues to be affected by lower distillers dried grains (DDG) margins due to problems with vomitoxin in the vicinities of the group's three eastern facilities. Lower international demand for DDG also continued to pressure pricing and margins.
Further, the company’s Plant Nutrient Group continues to be impacted by an unfavorable combination of oversupply, low prices and margins. Also, conservative purchasing decisions of a lower customer base are affecting revenues.
Meanwhile, Andersons’ Rail Group continues to be impacted by an oversupplied market, so far this year. Additionally, recovery of its utilization rates may be a little later and somewhat more gradual than earlier in the year. Increases in interest rates could also have a significant impact on its profitability.
Additionally, this Zacks Rank #5 (Strong Sell) company’s stretched valuation is a concern. In case of Andersons, the trailing 12-month price earnings (P/E) ratio is 30.34, while the industry's average trailing 12-month P/E ratio is lower at 25.10. This implies that the stock is overvalued.
Stocks to Consider
Better-ranked stocks in the sector include The Chemours Company (CC - Free Report) , Kronos Worldwide, Inc. (KRO - Free Report) and Kraton Corporation (KRA - Free Report) sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Chemours Company has delivered an average positive earnings surprise of 12.07% in the last four quarters.
Golden Kronos Worldwide has pulled off an average positive earnings surprise of 76.05% in the last four quarters.
Kraton Corporation has come up with an average positive earnings surprise of 16.54% in the last four quarters.
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