SEED, FEED, COHM, MTH, DHI, SPF, Agricultural Operations Stocks Undervalued
April 20, 2011/ M2 PRESSWIRE / BUYINS.NET / http://www.squeezetrigger.com is monitoring the Agricultural Operations sector and these stocks are the most undervalued as of today. ORIGIN AGRITECH LTD (NASDAQ:SEED), AGFEED INDUSTRIES INC (NASDAQ:FEED), ALL AMERICAN GROUP INC (OTC:COHM), MERITAGE HOMES CORP (NYSE:MTH), DR HORTON INC (NYSE:DHI), STANDARD PACIFIC CORP (NYSE:SPF) are all expected to go Up as they are Undervalued according to industry standard valuation metrics. The valuation model employs a three-factor approach to stock valuation using fundamental variables--the company's trailing 12-month Earnings-Per-Share (EPS), the analyst consensus estimate of the company's forecasted 12-month EPS, and the 30-year Treasury yield--to create a highly accurate reflection of a company's fair value.
The chart below displays the projected Fair Value and Valuation discount/premium of the most undervalued stocks in the highlighted industry group:
Symbol Company Name Last Close Fair Value Valuation Industry SEED ORIGIN AGRITECH LTD $7.46 $8.73 14.50% Undervalued Agricultural Operations FEED AGFEED INDUSTRIES INC $1.58 $2.65 40.40% Undervalued Agricultural Operations COHM ALL AMERICAN GROUP INC $0.23 $1.84 87.50% Undervalued Building - Residential/Commercial MTH MERITAGE HOMES CORP $25.69 $26.83 4.20% Undervalued Building - Residential/Commercial DHI DR HORTON INC $11.81 $14.56 18.90% Undervalued Building - Residential/Commercial SPF STANDARD PACIFIC CORP $3.69 $9.52 61.20% Undervalued Building - Residential/Commercial
Here are some of the variables that are utilized when calculating the Fair Market Valuation of a stock: Long-run EPS growth rate, Duration of Business-growth-cycle, Volatility of EPS growth rate, Systematic or beta risk of the firm, Correlation between the firm's EPS and the interest rate environment, EPS growth volatility, Dividend payout ratio, Buffer earnings, Interest rate related criteria: Interest rate (30 year yield) long-run level, Duration of interest rate cycle, Interest rate volatility. The Fair Market Valuation uses 12-month historic and forecasted EPS values and the current 30-year treasury yield as primary determinants. When calculating risk/return values such as the Sharpe ratio, the historic periods used are five years.
Some expected results of the Valuation Model are: the valuation of a stock increases in a declining interest rate environment. Increasing current and/or projected EPS will produce a higher Valuation. While long-term EPS growth would produce a corresponding long-term Valuation increase, concomitant long-term interest rate increases would offset EPS growth and depress the Valuation. The shorter a company's own business cycle, the higher its stock Valuation will be.
ORIGIN AGRITECH LTD (NASDAQ:SEED) - Origin Agritech Limited, through its subsidiaries, engages in the development, production, and distribution of hybrid crop seeds in the Peoples Republic of China. It primarily offers corn, rice, cotton, and canola seeds. The company also involves in hybrid seed technology development. Origin Agritech Limited distributes its products through first-level and second-level distributors, and retailers. The company was founded in 1997 and is headquartered in Beijing, the Peoples Republic of China.
AGFEED INDUSTRIES INC (NASDAQ:FEED) - AgFeed Industries, Inc., through its subsidiaries, engages in the animal nutrition and commercial hog production businesses primarily in the People's Republic of China. It involves in the research and development, manufacture, marketing, distribution, and sale of pre-mix, concentrate, and complete feed for use in the domestic animal husbandry markets. The company also involves in raising, breeding, and selling hogs for use in pork production and hog breeding markets. AgFeed Industries, Inc. offers its products primarily to distributors and large scale pig farms. As of December 31, 2009, the company had 2 breeder farm and 29 meat hog producing farms in the Jiangxi, Shanghai, Hainan, Guangxi, and Fujian provinces. It has a strategic alliance with Hypor; and a joint venture agreement with M2P2 LLC. The company was founded in 1995 and is headquartered in Nanchang, the Peoples Republic of China.
ALL AMERICAN GROUP INC (OTC:COHM) - All American Group, Inc. and its subsidiaries manufacture and distribute system-built homes for residential buildings in the United States. Its system-built products include single-family homes, multi-family dwellings, military housing, motels/hotels, group living facilities, and residential subdivisions. The company also offers apartments, condominiums, hotels, and specialized structures for military use; and townhouses, senior housing facilities, and dormitories. It provides its system-built modules under the All American Homes, Mod-U-Kraf, and All American Building Systems names. In addition, the company, through a joint venture with ARBOC Mobility, manufactures a line of low floor Americans with Disabilities Act-compliant buses, under the Spirit of Mobility brand name. The company markets its products directly to the end users, as well as to approximately 383 builders in 27 states, who sell, rent, or lease the buildings to the end-user. The company was formerly known as Coachmen Industries, Inc. and changed its name to All American Group, Inc. in May 2010. All American Group was founded in 1964 and is based in Elkhart, Indiana.
MERITAGE HOMES CORP (NYSE:MTH) - Meritage Homes Corporation engages in designing and building single-family attached and detached homes in the southern and western United States. It offers various homes for a range of homebuyers, including first-time, move-up, luxury, and active adult buyers in 12 metropolitan areas of Arizona, California, Nevada, Texas, Colorado, and Florida. The company conducts its homebuilding and marketing activities under the Meritage Homes, Monterey Homes, and Legacy Homes brand names. Meritage Homes Corporation was founded in 1985 and is based in Scottsdale, Arizona.
DR HORTON INC (NYSE:DHI) - D.R. Horton, Inc. operates as a homebuilding company in the United States. The company operates in two segments, Homebuilding and Financial Services. The Homebuilding segment engages in the acquisition and development of land, and construction and sale of residential homes on the land in 27 states and 75 markets in the United States. This segment also provides traditional single-family detached homes, as well as builds attached homes, such as town homes, duplexes, triplexes and condominiums, which share common walls and roofs. It constructs and sells homes primarily under the name of D.R. Horton, Americas Builder. The Financial Services segment involves in originating and selling mortgages, as well as provides title insurance agency and closing services. The company markets and sells its homes through commissioned employees and independent real estate brokers. The company was founded in 1978 and is based in Fort Worth, Texas.
STANDARD PACIFIC CORP (NYSE:SPF) - Standard Pacific Corp. operates as a diversified builder of single-family attached and detached homes in the United States. It constructs homes within various price and size ranges targeting diversified homebuyers with operations in major metropolitan markets in California, Florida, Arizona, Texas, the Carolinas, Colorado, and Nevada. The company, through its mortgage banking subsidiary, originates loans for its homebuyers, which are generally sold in the secondary mortgage market. In addition, Standard Pacific, through its title services subsidiary, acts as a title insurance agent performing title examination services for its Texas homebuyers. As of December 31, 2009, the company had 198 projects. Standard Pacific was founded in 1986 and is headquartered in Irvine, California.
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