Value
8.9/10data confidence 50%| Component | Sub-score |
|---|---|
| P/E | 9.4 |
| P/S | 7.6 |
| PEG | 9.1 |
- ▸PEG: 0.65
- ▸Attractively valued
AGM-A · Why this verdict
Why Federal Agricultural Mortgage C (AGM-A) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Federal Agricultural Mortgage preferred shares exhibit a strong quality franchise at the operating company level — 56% margins, Piotroski 8/9 — with 15% upside to the $161 target and a 7.14-to-1 reward-to-risk ratio, but a failed momentum gate at 3.8 (below the 4.5 threshold), extreme leverage at debt-to-equity of 20.1, and declining on-balance volume make this an avoidance-level setup until technical and leverage conditions improve.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A debt-to-equity ratio of 20.1 combined with three high-concentration risks — including top-10 customer concentration at 55% and top-3 counterparty concentration exceeding 90% — creates a compounding tail-risk profile where a counterparty stress event could rapidly pressure an already heavily leveraged balance sheet. Bear case | Debt-to-equity ratio declines below 10x and at least one high-concentration risk is resolved in the next annual filing, materially reducing the compounding tail-risk exposure. | →Stable |
| CounterAgricultural finance structures carry high balance-sheet leverage by sector design; if the underlying credit quality of agricultural borrowers remains stable and concentration reflects durable franchise relationships rather than fragility, this leverage level may be manageable. | ||
The momentum score of 3.8 falls below the 4.5 gate threshold required to enter a position, and on-balance volume is declining — technical deterioration is blocking an otherwise quality-and-value setup from being actionable regardless of the favorable 7.14-to-1 reward-to-risk geometry. Engine gate (failed) | Momentum recovers above 4.5 and on-balance volume reverses to a rising trend over the next two months, clearing the gate and making the setup actionable. | →Stable |
| CounterThe underlying business quality remains intact with 56% operating margins and a Piotroski F-Score of 8/9; if the franchise holds, momentum may recover naturally as price finds a base at current levels without fundamental deterioration. | ||
The same operating franchise driving the common shares — 56% margins, Piotroski 8/9, and best-in-class peer-group margins — supports this preferred share class at a PEG ratio of 0.64, with 15% headroom to the $161 take-profit target if technical conditions improve. Quality breakdown | Margins hold above 50% and the Piotroski score sustains at 7+/9 over the next four quarters, confirming that the quality underpinning the preferred dividend remains durable. | →Stable |
| CounterA C-suite leadership change flagged in a recent filing introduces strategic uncertainty; declining on-balance volume suggests institutions may already be reducing exposure in anticipation of operational disruption during the transition. | ||
Declining on-balance volume indicates net selling pressure while the price sits in the top decile of its 52-week range — a pattern of distribution at elevated price levels that typically precedes near-term consolidation or correction even when the primary trend has not formally broken. Momentum breakdown | On-balance volume reverses to a rising trend and sustains for more than 8 consecutive weeks, confirming that distribution pressure has abated and accumulation has resumed. | →Stable |
| CounterPrice remaining above the 200-day moving average suggests the primary trend is intact; declining OBV at elevated prices may represent orderly profit-taking rather than a distribution signal that leads to a sustained decline. | ||
A debt-to-equity ratio of 20.1 combined with three high-concentration risks — including top-10 customer concentration at 55% and top-3 counterparty concentration exceeding 90% — creates a compounding tail-risk profile where a counterparty stress event could rapidly pressure an already heavily leveraged balance sheet.
→StableBear case
- Expectation
- Debt-to-equity ratio declines below 10x and at least one high-concentration risk is resolved in the next annual filing, materially reducing the compounding tail-risk exposure.
CounterAgricultural finance structures carry high balance-sheet leverage by sector design; if the underlying credit quality of agricultural borrowers remains stable and concentration reflects durable franchise relationships rather than fragility, this leverage level may be manageable.
The momentum score of 3.8 falls below the 4.5 gate threshold required to enter a position, and on-balance volume is declining — technical deterioration is blocking an otherwise quality-and-value setup from being actionable regardless of the favorable 7.14-to-1 reward-to-risk geometry.
→StableEngine gate (failed)
- Expectation
- Momentum recovers above 4.5 and on-balance volume reverses to a rising trend over the next two months, clearing the gate and making the setup actionable.
CounterThe underlying business quality remains intact with 56% operating margins and a Piotroski F-Score of 8/9; if the franchise holds, momentum may recover naturally as price finds a base at current levels without fundamental deterioration.
The same operating franchise driving the common shares — 56% margins, Piotroski 8/9, and best-in-class peer-group margins — supports this preferred share class at a PEG ratio of 0.64, with 15% headroom to the $161 take-profit target if technical conditions improve.
→StableQuality breakdown
- Expectation
- Margins hold above 50% and the Piotroski score sustains at 7+/9 over the next four quarters, confirming that the quality underpinning the preferred dividend remains durable.
CounterA C-suite leadership change flagged in a recent filing introduces strategic uncertainty; declining on-balance volume suggests institutions may already be reducing exposure in anticipation of operational disruption during the transition.
Declining on-balance volume indicates net selling pressure while the price sits in the top decile of its 52-week range — a pattern of distribution at elevated price levels that typically precedes near-term consolidation or correction even when the primary trend has not formally broken.
→StableMomentum breakdown
- Expectation
- On-balance volume reverses to a rising trend and sustains for more than 8 consecutive weeks, confirming that distribution pressure has abated and accumulation has resumed.
CounterPrice remaining above the 200-day moving average suggests the primary trend is intact; declining OBV at elevated prices may represent orderly profit-taking rather than a distribution signal that leads to a sustained decline.
Per-dimension breakdown
Quality
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 0.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.7 |
| Moat | 6.9 |
| Piotroski F | 8.9 |
- ▸Strong margins: 56%
- ▸Strong Piotroski F-Score: 8/9
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.0 |
| EPS growth | 5.7 |
Momentum
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 5.6 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 6.1 |
| growth rank | 4.8 |
- ▸Best-in-class margins
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.1 |
| support resistance | 0.0 |
| 52w position | 10.0 |
| gap | 5.0 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 10.0 |
| days to cover | 10.0 |
| volatility | 9.5 |
| beta | 6.9 |
| debt equity | 0.0 |
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| dividend safety | 7.0 |
- ▸Dividend: 441.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:7.9>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
7.1%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 63, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $1.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.9) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.9, Momentum at 7.9, and Risk (lower is worse) at 7.3; the weakest are Technical at 3.8, Insider at 5.0, and Sentiment at 5.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The momentum score of 3.8 falls below the 4.5 gate threshold required to enter a position, and on-balance volume is declining — technical deterioration is blocking an otherwise quality-and-value setup from being actionable regardless of the favorable 7.14-to-1 reward-to-risk geometry.
Trip ifMomentum score rises above 4.5 for 2 consecutive months, clearing the momentum gate.
- P2The same operating franchise driving the common shares — 56% margins, Piotroski 8/9, and best-in-class peer-group margins — supports this preferred share class at a PEG ratio of 0.64, with 15% headroom to the $161 take-profit target if technical conditions improve.
Trip ifOperating margin compresses below 45% for 2 consecutive quarters.
- P3A debt-to-equity ratio of 20.1 combined with three high-concentration risks — including top-10 customer concentration at 55% and top-3 counterparty concentration exceeding 90% — creates a compounding tail-risk profile where a counterparty stress event could rapidly pressure an already heavily leveraged balance sheet.
Trip ifDebt-to-equity ratio falls below 10x for 2 consecutive quarters.
- P4Declining on-balance volume indicates net selling pressure while the price sits in the top decile of its 52-week range — a pattern of distribution at elevated price levels that typically precedes near-term consolidation or correction even when the primary trend has not formally broken.
Trip ifOn-balance volume sustains a rising trend for more than 8 consecutive weeks.