Quick Byte: ABTX.
First the stats:
Current P/E: 1412.50
Forward P/E: 21.1
Analysis: Who cares
Float: 27.0M
Short: ~25%
Analysis: Who cares, the more short...the better. (kindling)
Projected 32%
Growth:
They currently have roughly 40% of the forage and turf grass market with a goal to have 45% by 2000. A goal that they are well ahead of schedule on.
ABTX is the last american, large, independent in a war with the two majors: DD, MTC, and DOW. All, especially DD were very interested in ABTX as a takeover. This would be a major boost for any one of them giving them a commanding market.
In July/August they were targeted by a short group that hyped fears stating that ABTX was going to adjust past earnings. Even though the SEC had just finished an accounting audit and passed them with flying colors. Still, the price plummeted from $29.50 to, at one point, $8.
ABTX earning have not been stellar but for one reason....Acquisition. In the past years, ABTX has gobbled up some 30 small players to beef up their market position. All the while the majors were doing the same to some larger companies at premium price levels.
What does this add up to? Nothing until, the bruised and beaten CEO, J. Thomas decided that it was time to put the company up for sale at a premium price. Moreover, they hired Merrill Lynch to explore these alternatives for them.
ABTX is valued fairly, right now at $45/shr. This equates to similar premiums paid to other players in the field w/o the market dominance. Some valuations have been whispered to be as high as $70. Merrill is due out with a report this week stating their findings on the value of ABTX.
They will be sold as this is the opportunity that the majors have been waiting for. ABTX has resisted takeover in the past as it was not their intent to do anything other than become THE player in the seed market.
Whether you wish to trade ABTX for the short term or intermediate term, put at least some aside in a longer term account and watch it grow.
I expect this thing to go within the next two months. Until then watch for that report from ML. ;)
Don't wait too long or you will miss out.
I am about to liquidate everything else, take a break from trading, and go long on ABTX.
Will be easy money.
Good trading and luck.
TJ
|
