Agria Corp. (NYSE: GRO)
Agria Corp. researches, develops, produces and markets upstream agricultural products in the People’s Republic of China. The Company markets corn seed, sheep breeding products and seedling products to local and regional distributors within China.
Founded in 2000, the Company is headquartered in Beijing, China.
|
Share Statistics (23-Nov-09) |
|
FY 2007 |
FY 2008 |
% Chg |
Q3 2008 |
Q3 2009 |
% Chg |
|
| Symbol |
GRO |
Revenue, $Mn |
670.8 |
n/a |
n/a |
87.8 |
n/a |
n/a |
| Current price |
$4.17 |
Gross marg. |
55.7% |
n/a |
n/a |
57.1% |
n/a |
n/a |
| 52wk Range: |
$0.75-4.53 |
Oper. margin |
46.0% |
n/a |
n/a |
13.1% |
n/a |
n/a |
| Avg Vol (3m): |
343,522 |
Net margin |
21.2% |
n/a |
n/a |
5.1% |
n/a |
n/a |
| Market Cap. |
263.31M |
|
|
|
|
|
|
|
| Dil. Shares Outst. |
126.29M |
EPS, $ |
1.341 |
n/a |
n/a |
0.036 |
n/a |
-100% |
Source: Reuters.com, SEC Filings.
Financial Summary
| Financial Strength (23-Nov-2009) | Company | Industry | Sector | S&P 500 |
| Quick Ratio (MRQ) | 28.36 | 1.73 | 1.09 | 0.84 |
| Current Ratio (MRQ) | 29.15 | 2.52 | 1.47 | 0.99 |
| Long-Term Debt to Equity (MRQ) | – | 55.61 | 32.63 | 130.42 |
| Total Debt to Equity (MRQ) | 0.48 | 148.20 | 49.76 | 201.14 |
Source: Reuters.com, SEC Filings.
Analyst Consensus
No analyst covers GRO at this time.
Investment Highlights
In September of 2007, Chinese scientists at the Chinese Academy of Agricultural Sciences (CAAS) have developed a genetically modified (GM) corn that may show superior quality nutritional value when used in feed livestock. The scientists believe that GM corn may reduce phosphorous pollution as well.
The breakthrough suggests that GM corn contains high levels of the phytase enzyme, which aids in digestion of phosphorous in livestock, a nutrient found in soy and corn. The phytase enzyme is an important ingredient in the feed of pigs. The pigs, however, are deficient of the enzyme needed to absorb sufficient levels of phosphorus. As a result, the phosphorous is released into the ground through animal waste.
To aid in the absorption of phosphorous in pigs, farmers have added phytase to feed. A product of microorganism fermentation, the process of phytase production is quite expensive.
The CAAS scientists discovered that the gene from the Aspergillus fungus can produce phytase and injected it into corn. Farmers are now able to add just a few grams of GM corn seed per kilogram of animal feed to provide enough phosphorous required by pigs.
The potential worldwide market for phytase is estimated at $500 million, with a large portion of this market (approximately $200 million) located in China, according to a recent China Feed Industry study. The Chinese market for corn seed is estimated at $1 billion.
In China, annual animal waste containing phosphorous totals approximately 2.5 million tons, causing serious environmental issues for the Chinese. GM corn promises to reduce the toxic waste from animals significantly and curtail phosphorus pollution the waste produces by approximately 40%. Agriculture breakthroughs are among one of Beijing’s top priorities in its environmental initiatives.
News Moving GRO
On November 23, the Chinese government approved genetically modified (GM) phytase corn for commercial use.
Company competitor, Origin Agritech (Nasdaq: SEED), said it was approved to sell GM phytase corn following receipt of a Bio-safety Certificate from the Ministry of Agriculture in China. A spokesman for Origin Agritech said that receipt of a Bio-certificate is the final step in the process of approval.
The breakthrough and significance of GM phytase corn eliminates the need of an expensive additive to feed stock, saving costs, time, manufacturing processes and labor for producers.
Technical Analysis
Source: http://stockcharts.com/h-sc/ui?s=GRO
GRO trades above its 13-day moving average. This bullish sign is significant because the 13-day moving average is upwardly sloped.
The MACD for GRO currently indicates a bullish signal. The MACD is above the signal line, a 9-day moving average of the MACD. The MACD is above the critical level of 0, which implies the past price action has been positive. Overall, the chart is bullish.
Comparative Analysis
|
Company Name |
Ticker |
Price/ |
Mrkt. Cap. |
P/E |
P/S |
||
|
Nov-23-2009 |
symbol |
Share, $ |
$ Mn |
2009 |
2010 |
2009 |
2010 |
| Monsanto Company |
MON |
79.89 |
43,540 |
21.03 |
18.16 |
3.71 |
n/a |
| Shandong Zhouyuan |
SZSN |
0.012 |
n/a |
n/a |
n/a |
n/a |
n/a |
| Origin Agritech Ltd. |
SEED |
10.45 |
235.27 |
n/a |
22.72 |
n/a |
n/a |
| Farm Products Median |
|
|
|
17.47 |
n/a |
0.73 |
n/a |
| Agria Corp. |
GRO |
4.17 |
263.31 |
n/a |
n/a |
n/a |
n/a |
Source: Thomson Financial
Insider Trading Activity
|
NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months |
||
|
Shares |
Transaction |
|
| Purchases |
n/a |
0 |
| Sales |
n/a |
0 |
| Net Shares Purchased (Sold) |
n/a |
0 |
| Total Insider Shares Held |
1.65M |
N/a |
| % Net Shares Purchased (Sold) |
0.0% |
n/a |
|
Net Institutional Purchases – Prior Qtr to Latest Qtr |
|
|
Shares |
|
| Net Shares Purchased (Sold) |
(2,782,640) |
| % Change in Institutional Shares Held |
(59.6%) |
Source: Yahoo Finance
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