Ready to Rise 54% with HUGE Revenue Growth, BIG Cash Dividends, and MAJOR Share Buyback!
Agria (NYSE: GRO) could rapidly rise 54% to $2.41 (from last week's close of $1.57). GRO's 100% owed China seeds subsidiary grew its fiscal 2013 revenues by 98% to $17mm, but it's currently being valued at less than zero!
GRO's 80.81% owned Agria Asia subsidiary owns a controlling 50.22% stake in PGG Wrightson (NZX: PGW), the largest proprietary seed company in the Southern Hemisphere! If GRO sold its PGW shares at its current NZX market price of NZ$0.40 - and paid its two minority Agria Asia shareholders their combined cut of 19.19% - GRO would receive proceeds of USD$99.7 million or $1.80 per share in cash! GRO is practically a sure thing to rise well above $1.80 per share and could explode past $2 per share any day now!
At $2, GRO's China seeds subsidiary will be valued at only $0.20 per share or $11.08mm, which is just 0.65X its fiscal 2013 revenues of $17mm. Considering how GRO recently reported China seeds revenue growth of 98% and how continued huge growth is ahead due to GRO bringing a consistent flow of new innovative field/edible corn seeds to the market in China - GRO's China seeds subsidiary deserves a minimum valuation of 2X sales or $34 million, which would give GRO a total market cap of $133.7 million, for a GRO share price of $2.41!
Alan Lai, GRO's largest shareholder, was recently appointed the new Chairman of PGW and launched a biannual cash dividend - with PGW paying a total fiscal 2013 cash dividend of $0.032 per share - and GRO receiving $8mm or $0.145 per share in cash! With PGW set for major growth in this new fiscal year - PGW's dividend this year could easily grow to at least $0.04 per share - with GRO likely to receive $10mm+ or $0.18 per share in cash! GRO has approved a share buyback of up to $10mm, which expires year-end and could allow GRO in December to repurchase as many as 6 million+ shares in the open market! We own 550,000 shares of GRO and we intend to sell them after GRO rises to much higher prices.