Glanbia Needs To Be On Your Radar

Glanbia is an Irish food manufacturer that derives over half of its sales in the United States.
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Glanbia (OTC:OTC:GLAPF, OTCPK:OTCPK:GLAPY) is an Irish food manufacturer that needs to be on your radar screen. It gets over half of its revenues in the U.S. and has been showing fantastic growth. Though the stock price is pretty high, you should follow it.
Glandbia has 295 million shares outstanding and trades at a market cap of €4.9 billion ($5.4 U.S.). It takes $1.11 to buy one Euro. The dividend is €0.11 and has a yield of 0.6%. The normalized earnings per share are €0.6116 (67¢ U.S.) and trades at a price to earnings ratio of 27. This article from September 2014 from Seeking Alpha also discusses the many merits of this company.
The company has four main divisions: Nutrition, Ingredients, Dairy Ireland, and several joint ventures. 51% of revenues are derived in the U.S., 21% Ireland, and the rest in Europe and elsewhere.
Growth since 2013 has been very nice. 2014 revenues of €3.522 billion ($3.9 U.S.) are up 6.6%. EBITDA of €245 million ($270 U.S.) is up 8.1% and the margin is 7%. Normalized earnings per share are mentioned above and up 10.3%. There is €110 million ($121 U.S.) in cash and €305 million ($339 U.S.) in accounts receivable to €620 million ($688 U.S.) in debt and €390 million ($433 U.S.) in accounts payable. Food companies often carry higher amounts of debt as their margins are pretty high and fairly consistent.
What is most attractive about Glanbia is its growth. Since 2011, revenue has grown 30% from €2.7 billion ($3 U.S.), adjusted EPS has grown 27% from €0.4822 (53.5¢ U.S.), and the dividend has grown 34% from €0.82 (91¢ U.S.). Most importantly, outstanding share count has remained almost the same.
The company is growing through M&A, opening new plants, joint ventures, and is growing organically (literally and figuratively). Glanbia recently opened a plant in Virginia. This plant produces whey which is very popular amongst fitness people and bodybuilders. It is a good way to take in high protein and low calories. Management sees China and South Asia as good places to export baby formula.
The largest shareholder, Glanbia cooperative Society, is attempting to reduce is shareholdings from 41.7% to 36.5%. The Society is a dairy co-op, very similar to the farming co-ops that we have here in the U.S. There has been a glut in the dairy market. Usually when commodity prices are low, it provides tail-winds to the processors. When oil prices are low, it’s good for the refiners. When grain prices are low, it’s good for the grain elevators. So it seems that low dairy prices have been a good thing for Glanbia. One wonders how long this will last.
My thesis on Glanbia is that it’s a very good company. You can’t really argue with that. It gets more than half of its revenues in the U.S. and no one has heard of it. However, it’s not a cheap stock. Put this on your radar and wait for it to get to what you consider a reasonable valuation.

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.
 
Source: Seeking Alpha

Mirá También

Así lo expresó Domingo Possetto, secretario de la seccional Rafaela, quien además, afirmó que a los productores «habitualmente los ignoran los gobiernos». Además, reconoció la labor de los empresarios de las firmas locales y aseguró que están «esperanzados» con la negociación entre SanCor y Adecoagro.

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