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American Vanguard Buys Four Herbicide Brands From Corteva

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American Vanguard Corporation has recently announced the acquisition of four herbicide brands, First Rate, Classic, Python and Hornet, from Corteva Agriscience. The company stated that these brands are valuable for boosting the performance of weed control against the growing numbers of resistant weed species. Moreover, the products are complementary for a number of key herbicides that are used in the agricultural market in the United States.  

Notably, the transaction includes the purchase of end-use registrations, commercial sales and marketing information as well as finished goods inventory. The financial terms of the transaction were not disclosed.

The acquisition supports American Vanguard’s crop protection business by strengthening portfolio of valuable herbicides. The portfolio plays a vital role in weed control and resistance management. Also, these brands will broaden its U.S. herbicide offering in corn, soybeans, peanuts along with an array of other niche crop markets. The brands are profitable and already have well-established market positions. They will be readily incorporated into the company’s existing sales and marketing programs.

American Vanguard’s shares have gained 18.9% in the past year compared with the 18.7% rise of the industry.

In third-quarter 2019 earnings call, American Vanguard stated that it expects consolidated sales for full-year 2019 to rise 5% year over year with mixed results in its key markets. The company also expects international sales to rise roughly 25%. For 2019, net sales are projected at $475 million and gross profit margins are expected to be 38%.

Zacks Rank & Key Picks

American Vanguard currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Impala Platinum Holdings Limited IMPUY, Pan American Silver Corp PAAS and Sibanye Gold Limited SBGL, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Impala Platinum Holdings has projected earnings growth rate of 255.2% for fiscal 2020. The company’s shares have skyrocketed 286.6% over a year.

Pan American Silver has an estimated earnings growth rate of 38.1% for 2020. Its shares have returned 57% in the past year.    

Sibanye Gold has an expected earnings growth rate of 587.5% for 2020. The company’s shares have surged 232.2% in the past year.

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