Value
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.8 |
| P/S | 10.0 |
| EV/EBITDA | 3.9 |
| Fwd P/E | 9.0 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 11.9x
- ▸PEG: 0.00
- ▸Attractively valued
ANDE · Why this verdict
Why The Andersons (ANDE) 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 score4.4/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
The Andersons trades at an attractively low forward multiple with a strong recent earnings beat pattern, but free cash flow is deeply negative relative to net income, momentum has failed the minimum threshold, and the stock has already reached or exceeded its near-term price target, leaving an unfavorable setup.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business carries high concentration in corn as a commodity input, exposing earnings to crop yield cycles, weather events, and corn price volatility. This single-commodity dependence limits the predictability of margins across a full cycle. Bear case | If corn concentration risk materializes, gross margin declines more than 30% year over year in any single quarter. | →Stable |
| CounterCommodity concentration can also be a source of expertise and scale advantages; a business deeply specialized in corn logistics may capture superior margin in periods of supply tightness versus less focused peers. | ||
Free cash flow is negative relative to net income at -180%, meaning the company is not converting reported earnings into cash. This is a material earnings quality red flag that calls into question the sustainability of reported profitability. Quality breakdown | Free cash flow turns positive and the FCF-to-net-income ratio rises above 50% for 2 consecutive quarters. | →Stable |
| CounterWorking capital-intensive commodity distribution businesses can carry structurally negative FCF in periods of rising inventory values; if commodity prices stabilize, working capital release could rapidly improve cash generation. | ||
The stock is trading near its near-term resistance target with the current price only about 5% below that level and a negative implied upside to the prior target, suggesting the risk/reward at current levels does not meet a minimum acceptable bar. Warnings | A new, higher price target emerges from analyst consensus, implying upside greater than 15% from current levels. | →Stable |
| CounterThe stock remains above its 200-day moving average and technical indicators show favorable support and resistance positioning, meaning the range-bound setup could resolve higher if fundamentals improve. | ||
The company has beaten consensus estimates in three of the last four quarters with an average positive surprise above 30%, including beats of 61%, 31%, and 83% in three recent periods. This pattern of outperformance relative to estimates is the primary constructive signal in the bundle. Earnings | EPS surprise stays positive for 2 more consecutive quarters, with the average beat remaining above 15%. | →Stable |
| CounterThe single miss — a -53% negative surprise in the oldest of the four quarters — demonstrates that earnings can miss sharply, and with revenue declining approximately -1% year over year, the beat streak may reflect estimate resets rather than improving operational momentum. | ||
The business carries high concentration in corn as a commodity input, exposing earnings to crop yield cycles, weather events, and corn price volatility. This single-commodity dependence limits the predictability of margins across a full cycle.
→StableBear case
- Expectation
- If corn concentration risk materializes, gross margin declines more than 30% year over year in any single quarter.
CounterCommodity concentration can also be a source of expertise and scale advantages; a business deeply specialized in corn logistics may capture superior margin in periods of supply tightness versus less focused peers.
Free cash flow is negative relative to net income at -180%, meaning the company is not converting reported earnings into cash. This is a material earnings quality red flag that calls into question the sustainability of reported profitability.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive and the FCF-to-net-income ratio rises above 50% for 2 consecutive quarters.
CounterWorking capital-intensive commodity distribution businesses can carry structurally negative FCF in periods of rising inventory values; if commodity prices stabilize, working capital release could rapidly improve cash generation.
The stock is trading near its near-term resistance target with the current price only about 5% below that level and a negative implied upside to the prior target, suggesting the risk/reward at current levels does not meet a minimum acceptable bar.
→StableWarnings
- Expectation
- A new, higher price target emerges from analyst consensus, implying upside greater than 15% from current levels.
CounterThe stock remains above its 200-day moving average and technical indicators show favorable support and resistance positioning, meaning the range-bound setup could resolve higher if fundamentals improve.
The company has beaten consensus estimates in three of the last four quarters with an average positive surprise above 30%, including beats of 61%, 31%, and 83% in three recent periods. This pattern of outperformance relative to estimates is the primary constructive signal in the bundle.
→StableEarnings
- Expectation
- EPS surprise stays positive for 2 more consecutive quarters, with the average beat remaining above 15%.
CounterThe single miss — a -53% negative surprise in the oldest of the four quarters — demonstrates that earnings can miss sharply, and with revenue declining approximately -1% year over year, the beat streak may reflect estimate resets rather than improving operational momentum.
Per-dimension breakdown
Quality
2.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 1.5 |
| Gross margin | 0.0 |
| Op margin | 0.2 |
| Net margin | 0.6 |
| Current ratio | 5.1 |
| FCF quality | 0.0 |
| Moat | 3.1 |
| Piotroski F | 4.4 |
- ▸Earnings quality RED FLAG: -180% FCF/NI
- ▸No competitive moat
- ▸Quality concerns
Growth
2.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.2 |
- ▸Declining revenue: -1%
Momentum
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.3 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 2.4 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 6.9 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
3.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $5,287,221 (0.219% of mkt cap)
Peer rank
4.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.8 |
| quality rank | 4.0 |
| growth rank | 2.0 |
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.6 |
| support resistance | 5.6 |
| 52w position | 7.2 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 8.7 |
| volatility | 4.2 |
| put call | 1.9 |
| implied vol | 5.6 |
| max pain risk | 3.0 |
| beta | 9.1 |
| debt equity | 5.0 |
- ▸Elevated put/call: 1.71
- ▸Above max pain $55
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 113.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.0<4.5
- ASYMMETRY:-0.6=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.57
Upside
-3.8%
Downside
6.6%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 43 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $2.4B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Value at 7.4 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:3.0<4.5.
The strongest dimensions are Value at 7.4, Technical at 6.5, and Sentiment at 6.4; the weakest are Quality at 2.0, Growth at 2.2, and Momentum at 3.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.57 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Free cash flow is negative relative to net income at -180%, meaning the company is not converting reported earnings into cash. This is a material earnings quality red flag that calls into question the sustainability of reported profitability.
Trip ifFree cash flow turns positive and the FCF-to-net-income ratio rises above 50% for 2 consecutive quarters.
- P2The business carries high concentration in corn as a commodity input, exposing earnings to crop yield cycles, weather events, and corn price volatility. This single-commodity dependence limits the predictability of margins across a full cycle.
Trip ifGross margin declines more than 30% year over year in any single reported quarter.
- P3The stock is trading near its near-term resistance target with the current price only about 5% below that level and a negative implied upside to the prior target, suggesting the risk/reward at current levels does not meet a minimum acceptable bar.
Trip ifAnalyst consensus price target rises above $80, implying more than 15% upside from current price.
- P4The company has beaten consensus estimates in three of the last four quarters with an average positive surprise above 30%, including beats of 61%, 31%, and 83% in three recent periods. This pattern of outperformance relative to estimates is the primary constructive signal in the bundle.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.