Tuesday 21 July 2015

Analysis of Agrana 2015


Agrana, an Austrian agricultural processing company

Company: Agrana

ISIN AT0000603709 | WKN 779535  

Business: An Austrian agricultural processor. They are divided into three segments: Sugar (traditionally their core business but decreasing sugar prices is having a large impact), Starch (potatoes and corn sold to food, paper, textile, construction and the pharmaceutical industry) and finally Fruit (prepared fruit and fruit juices, the growth business).

Active: In over 40 countries world wide but around half of the revenue comes from Austria.

P/E: 13.7

Comment: They have two large owners. Südzucker with around 50% of the shares and ZBG with 43% of the shares. The free-float is only 7.3%!


This company was analysed due to a request from Matthias posted on the Analysis Requests page. 

Here you can find the previous analysis of Agrana Group

contrarian values of P/E, P/B, ROE as well as dividend for Agrana

The P/E for Agrana is fully ok with 13.7 and the P/B is excellent with 1.0 which gives a very clear buy signal from Graham. The earnings to sales are not impressive with only 3% and the ROE is also not very pleasing with 7.2%. The book to debt ratio is however ok with 0.9.
In the last five years they have had a yearly growth rate of 2.0% which is so, so and this then gives us a motivated P/E of 9 to 13 which means that Agrana is today fairly valued by the market.
they pay an excellent dividend in the size of 4.6% (but it has been fixed there for the last four years) which correspond to 63% of their earnings which I find to be a bit too high and they need to improve their earnings.

Conclusion: Graham says yes to Agrana and even though the P/E, P/B and dividend is excellent I am hesitant due to two reasons. I really do not like the low free-float and secondly the sugar issue is still on going as were also reported in their final quarter report which means that I want to see a quarter with improved conditions before I would like to step into Agrana. Sure... the fruit is doing really well but still not well enough to cover for the seriously poor performance of the sugar division.

If this analysis is outdated then you can request a new one.

No comments: