Andersons (ANDE) To Gain From Favorable Outlook On Crops
Zacks Investment Research | Sep 28, 2016 05:55AM ET
On Sep 27, we issued an updated research report on The Andersons, Inc. (NASDAQ:ANDE) . The company stands to benefit from rising estimates for preharvest inventory levels, combined with a quality harvest. Additionally, it remains optimistic on back of a strong outlook on wheat, corn and soybean crops.
Notably, corn and soybean crop conditions are favorable in the U.S., with some spots experiencing higher than normal temperatures. Although a few localized spots in markets had lower precipitation, the crop as a whole is in a much better condition than it was last year in the Eastern Corn Belt. Additionally, rising estimates for preharvest inventory levels, combined with a quality harvest, will create income opportunities for the group late this year and into 2017.
In the plant nutrient space, Andersons remains focused on leveraging its distribution base and pursuing an increased mix of specialty product sales that support customers with solutions for precision agriculture. These products facilitate the company’s customers' yields and are a more sustainable agronomic solution.
Regarding productivity initiatives, Andersons has garnered a good momentum. Run rate costs are being reduced considerably through synergies happening primarily out of its grain and plant nutrient groups. Grain is reaping benefits from the new IT infrastructure as well as having addressed other opportunities to streamline the organization.
Moreover, Andersons anticipates results in the second half of the year to improve significantly from the first half and believes that it will post earnings per share above the current consensus level of 81 cents per share for the full year 2016. The company also remains confident that it will deliver over $10 million in run rate cost reductions by the end of 2017.
Andersons currently carries a Zacks Rank #2 (Buy).
Other Stocks to Consider
Some other favorably placed stocks worth considering in the same sector are Newmont Mining Corp. (NYSE:NEM) , Green Plains Inc. (NASDAQ:GPRE) and NL Industries Inc. (NYSE:NL) .
Newmont Mining has seen upward estimate revisions over the past 60 days. The stock sports a Zacks Rank #1. You can see Zacks Investment Research
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