Why Andersons Shares Rocketed Higher

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of agriculture-based conglomerate Andersons (Nasdaq: ANDE  ) shot higher by as much as 12% after reporting much better-than-expected third-quarter earnings results.

So what: For the quarter, Andersons reported a 21% increase in revenue over the previous year to $1.14 billion and a profit of $0.90, a 53% improvement over the year-ago quarter. Both results absolutely crushed Wall Street's consensus estimate of $997.2 million in revenue, and a profit of just $0.28. The majority of Andersons' strength came from its rail group, which produced a segment profit of $19.1 million versus just $1.1 million last year. The remaining sectors of Andersons' business were affected negatively by the drought (e.g., grain and ethanol operations).

Now what: I'm still not a fan by any means of ethanol production, but Andersons has a well-diversified business model and a solid management team that understands it's not about three months from now, it's about the long-term picture. A crushing earnings beat, growth by acquisitions, and prudent fiscal management are enough reasons for me to at least add Andersons to My Watchlist.

Craving more input? Start by adding Andersons to your free and personalized Watchlist so you can keep up on the latest news with the company.


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