American Vanguard Up to Strong Buy


On Dec 20, Zacks Investment Research upgraded specialty chemicals company American Vanguard Corp. (AVD) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

American Vanguard registered a profit of $8.9 million in the third quarter of 2013 (reported on Oct 31), up around 10% from $8.1 million recorded a year ago. Earnings per share rose 11% to 31 cents a share from 28 cents a year ago.

Revenues increased 8% year over year to $97.2 million in the reported quarter on solid demand for American Vanguard’s granular soil insecticides. Demand for these insecticides in combination with genetically modified trait seed, are currently rising, driven by growing insect resistance.

Sales also benefited from the extension of the agreement between American Vanguard and Monsanto Company (MON) for co-marketing the former’s Impact herbicide with the latter’s market-leading Roundup brands.

Moving ahead, American Vanguard is well placed to offer its premium crop protection products as growers gear up for the 2014 planting season and prepare to deal with intensifying weed and insect risks. The company foresees strong demand for its diversified product lines across various crop growers and geographies. American Vanguard is planning to roll out a liquid, fertilizer-ready corn soil insecticide, to complement its industry-leading granular SmartBox products.

The company is also actively pursuing accretive product acquisition and licensing opportunities, while adhering to strict investment criteria. American Vanguard will continue to focus on the quality of its balance sheet and evaluate proper balance of growth-oriented investments with shareholder returns in the form of dividends and share repurchases

Other Stocks to Consider

Other companies in the specialty chemicals space that are worth considering include Ferro Corporation (FOE), and HB Fuller Co. (FUL). Both hold a Zacks Rank #2 (Buy).

Read the Full Research Report on MON
Read the Full Research Report on FOE
Read the Full Research Report on AVD
Read the Full Research Report on FUL

Zacks Investment Research

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