The Andersons, Inc. ANDE seems to be derailing as its shares have plunged 17.8% since it posted dismal fourth-quarter 2014 results. Moreover, this Zacks Rank #5 (Strong Sell) stock hit a 52-week low of $39.44 yesterday, before closing at $39.63 and plunging 25.4% year to date.
What Led to the Share Price Decline?
Andersons has been losing momentum owing to lower crude price and rising ethanol inventory that has impacted the company’s margins. Further, Chinese import restrictions, poor rail market and increased competition hurt Andersons’ growth.
In the last reported quarter, Andersons’ adjusted earnings declined around 17.6% year over year to 89 cents per share. Earnings also missed the Zacks Consensus Estimate of $1.12, a negative surprise of 20.5%. Moreover, the company’s revenues plunged 19.7% year over year to $1.27 billion and fell short of the Zacks Consensus Estimate of $1.44 billion.
Andersons maintains a cautious outlook for ethanol margins and expects it to be lower for the full year 2015. Further, the company’s Anselmo train loading facility has not met volume or margin expectations as in the first year of operations at the location. Railroad services were so poor that it almost indicates a closure of Andersons’ access in the rail market.
These bearish factors have triggered a downward tendency in the company’s estimates in recent times. In fact, the Zacks Consensus Estimate for 2015 decreased 17% to $3.19 per share and for 2016 the same reduced 5.6% to $3.72.
Stocks That Warrant a Look
Stocks in the same sector that warrant a look include Cosan Ltd. CZZ, Agrium Inc. AGU and Air Products & Chemicals Inc. APD. All three stocks carry a Zacks Rank #2 (Buy).
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