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Stamps.com Inc. (STMP) Message Board

  • sifj4583 sifj4583 Oct 24, 2013 11:10 AM Flag

    Next Stock to Explode Upward

    Agria (GRO) looks ready to explode upward from its current price of $1.45. GRO's 80.81% owned Agria Asia subsidiary owns a controlling 50.22% stake in PGG Wrightson (PGW.NZ), the largest agriculture company in New Zealand. PGG Wrightson is projecting EBITDA this fiscal year of NZ$52-$56mm (USD$44-$47mm), which will equal huge growth of 14%-22%. Agria Asia's 50.22% of PGG Wrightson's projected EBITDA is USD$22.1-$23.6mm. GRO's 80.81% of Agria Asia's projected EBITDA is USD$17.85-$19.07mm.

    GRO also owns a China seeds business which will likely add about USD$2 million to GRO's EBITDA, which could give GRO total EBITDA of $19.85-$21.07mm.

    A valuation of just 10X EBITDA could give GRO a market cap of $198.5mm-$210.7mm. With 55.38mm shares outstanding, this would equal a GRO share price of $3.58-$3.80 per share.

    GRO just reduced its debt to $75mm, with short-term debt of $43mm and $32mm that matures in May 2008. GRO has $26.8mm in pledged restricted cash deposits that can be used towards paying off its debt plus another $42.7 million in unrestricted cash. Therefore, GRO's net debt is only $5.5mm and GRO will likely receive over $10mm in cash dividend payments from PGW.NZ next year.

    Disclaimer: We own 550,000 shares of GRO and intend to sell these shares at much higher prices.

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