The Andersons Beats Q2 EPS, Stock Trails Director Exit
The Andersons has beaten Wall Street's EPS estimate in each of the last four quarters — by margins ranging from 30% to 83% — yet the stock sits at $70.97, more than nine dollars below the price at whi
The Andersons Beats Q2 EPS, Stock Trails Director Exit
NEW YORK, September 12 —
The Andersons, Inc. (ANDE), the Maumee, Ohio grain trader and ethanol producer, has beaten Wall Street's EPS estimate in four consecutive quarters, yet shares trade at $70.97, more than nine dollars below the $80.53 price at which Director Patrick E. Bowe sold shares twelve days before the most recent earnings release.
- Q2 EPS of $2.15 beat the $1.48 consensus by 45.2%; fourth consecutive large positive surprise.
- Forward P/E of 11.3x against an analyst consensus price target of $88.33, implying 24% upside.
- Operating cash flow of $322M over trailing twelve months; free cash flow was negative $109M.
A Streak That Keeps Shrinking
The Andersons sells commodity grains, plant nutrients, and ethanol: thin-margin businesses where 7.2% gross margins mean earnings are highly sensitive to timing and volume. The four-quarter beat streak is real: surprises of 82.6%, 30.8%, 60.0%, and 45.2% are not marginal variance. But the trajectory is its own signal; each quarter, the beat margin has narrowed, from 82.6% down to 45.2%, suggesting analysts are catching up to what the numbers actually show. If consensus estimates are simply anchored low, the beat streak reflects measurement error as much as operational strength, and the stock's current P/E of 11.3x would already be pricing in better-than-reported earnings.
Cash Flows Don't Confirm the Story
The Andersons generated $322 million in operating cash flow over the trailing twelve months but left free cash flow at negative $109 million after capital expenditures. For a commodity-scale grain and ethanol trader doing $10.94 billion in revenue (down 1.2% year-over-year), the gap between accrual income and cash generation is the metric that matters. A company that beats EPS estimates while consuming cash is either investing heavily for future returns or flattering income through working capital timing. With $900 million in total debt against $70 million in cash, the DCF calculator shows how sensitive the valuation multiple is to whether that gap closes.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| ANDE | $2.4B | 11.3x | +78.7% |
| MGPI | $316M | 7.5x | -46.0% |
| GPRE | $1.0B | 8.9x | +59.3% |
| BG | $23.5B | 10.8x | +52.6% |
| ALCO | $293M | n/a | +15.8% |
| JJSF | $1.6B | 19.3x | -20.5% |
The Director's Price as a Referendum
Director Patrick E. Bowe sold 3,534 shares at $80.53 twelve days before The Andersons reported Q2 results, and the stock has not recovered to that level despite the subsequent earnings beat. An open-market director sale timed that close to an earnings report is not a scheduled plan sale. The gap between Bowe's exit price and today's $70.97 becomes a referendum on whether the 11.3x forward P/E reflects genuine value or whether analysts' $88.33 target assumes a cash-flow recovery that has not materialized. Run the free The Andersons, Inc. deep-dive to track it.
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The Andersons has beaten Wall Street's EPS estimate in each of the last four quarters — by margins ranging from 30% to 83% — yet the stock sits at $70.97, more than nine dollars below the price at which a director sold shares in an open-market transaction twelve days before the most recent earnings release.