Advertisement
Singapore markets closed

  • Straits Times Index

    3,176.51
    -11.15 (-0.35%)
     

  • Nikkei

    37,068.35
    -1,011.35 (-2.66%)
     

  • Hang Seng

    16,224.14
    -161.73 (-0.99%)
     

  • FTSE 100

    7,895.85
    +18.80 (+0.24%)
     

  • Bitcoin USD

    64,125.38
    +1,938.89 (+3.12%)
     

  • CMC Crypto 200

    1,371.97
    +59.34 (+4.52%)
     

  • S&P 500

    4,967.23
    -43.89 (-0.88%)
     

  • Dow

    37,986.40
    +211.02 (+0.56%)
     

  • Nasdaq

    15,282.01
    -319.49 (-2.05%)
     

  • Gold

    2,406.70
    +8.70 (+0.36%)
     

  • Crude Oil

    83.24
    +0.51 (+0.62%)
     

  • 10-Yr Bond

    4.6150
    -0.0320 (-0.69%)
     

  • FTSE Bursa Malaysia

    1,547.57
    +2.81 (+0.18%)
     

  • Jakarta Composite Index

    7,087.32
    -79.50 (-1.11%)
     

  • PSE Index

    6,443.00
    -80.19 (-1.23%)
     

Archer Daniels to Expand in Animal Feed With Neovia Buyout

Zacks Equity Research
Updated

Archer Daniels Midland Company ADM has been lately focused on improving its portfolio of Animal Nutrition products. After signing a joint development agreement with Chinese biotech company Qingdao Vland Biotech Group Co., Ltd. earlier this year, the company is looking to further enhance its Animal Nutrition footprint as it agrees to acquire France-based Neovia, which provides value-added animal nutrition solutions for the feed industry. Valued at nearly €1,535 billion, the deal is subject to customary conditions and is expected to close by the fourth quarter of 2018.

The acquisition of Neovia will mark a transformative step for Archer Daniel’s Animal Nutrition business as well as a key strategic investment in France. The acquisition, which is part of the company’s value creation strategy laid in 2014, will help it deepen relationships with French farmers and French agriculture world. It will also enable the company to ink partnerships with French Cooperatives. Moreover, the acquisition will enhance Archer Daniels’ presence in Western Europe, South and Central America, and Southeast Asia where Neovia has significant operations.

Further, the acquisition is perfectly in sync with the company’s growing Animal Nutrition footprint and capabilities. This, along with Neovia’s global presence as well as product and innovation expertise, with 11 R&D centers in six countries, is likely to craft a leading global animal nutrition provider, offering complete solutions for customers worldwide.

Neovia is nutrition solutions provider, operating in business lines — including premix and value-added services, pet care, additives and ingredients, aquaculture and complete feed. Owned by leading French agricultural cooperative group InVivo, the company employs nearly 8,200 people and has generated global sales of €1.7bn in 2017. With more than 75% of its sales generated outside Western Europe and only little exposure in the United States, Neovia’s portfolio and footprint perfectly complement Archer Daniels’ business.

Clearly, the acquisition will be a key milestone in the execution of Archer Daniels’ strategic plan and portfolio transformation. Apart from adding a diversified portfolio, the combination will enhance its geographic footprint, with an expanded presence in three continents while providing innovative capabilities to boost its Animal Nutrition business.

Archer Daniels is undertaking steps to manage its business portfolio, which are expected to help in realizing the value and invest the same in best possible resources to enhance returns. The company witnessed extensive portfolio transformation in the last four years by adding capabilities in specialty, and value-added products and services. In the Animal Nutrition business, the company added premix and aquaculture capabilities in Asia; built new and modern facilities in North America; and moved into pet treats in 2017. The company has also pooled its human and animal nutrition businesses into a single business unit earlier this year, offering complete nutrition solutions.

Currently, Archer Daniels carries a Zacks Rank #3 (Hold). Archer Daniels’ shares have gained 9.1% in the past year, outperforming the industry’s growth of 2.5%.



3 Top-Ranked Consumer Staples Stocks

Some better-ranked stocks in the Consumer Staples sector include Turning Point Brands, Inc. TPB and Medifast, Inc. MED, both sporting a Zacks Rank #1 (Strong Buy) as well as Ollie's Bargain Outlet Holdings, Inc. OLLI, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Turning Point Brands has rallied 61.7% in the last three months. Additionally, the company has delivered positive earnings surprise of nearly 16.7% in the last reported quarter.

Medifast has surged 68.7% in the last three months. Moreover, the company has long-term earnings growth rate of 15%.

Ollie's Bargain has delivered an average positive earnings surprise of 9% in the trailing four quarters. It has long-term earnings growth rate of 23%.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Ollie's Bargain Outlet Holdings, Inc. (OLLI) : Free Stock Analysis Report
 
MEDIFAST INC (MED) : Free Stock Analysis Report
 
Turning Point Brands, Inc. (TPB) : Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research