Stephen Takacsy - BNN - TOP PICK AG GROWTH (AFN TSX):
AG Growth is a leading global manufacturer of handling and storage systems for grain, fertilizer, and other commodities for the agriculture industry. The company is projecting another record year in 2024 with EBITDA of $300 million plus. It has a record backlog and strong demand from international commercial markets such as Brazil, India and Eastern Europe as these regions are investing heavily to upgrade its farming infrastructure. This is a great way to play the global agriculture sector without taking on commodity risk. The company is also generating significant free cash flow and is deleveraging quickly which is another tailwind for the stock price which is currently trading at a bargain of less than seven times forward EBITDA. The stock has rallied a few times on news that the company had received a takeover offer in the $60s. We estimate that AG Growth is worth over $85 per share and expect the company to be sold as it is widely held and currently vulnerable to a take-over offer.
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