National Securities reaffirmed their buy rating on shares of S&W Seed (NASDAQ:SANW) in a report released on Friday, AnalystRatings.com reports. National Securities currently has a $6.00 price objective on the stock.
“Legacy Pioneer Agreement Divested. On May 23rd, SANW announced the termination of the Pioneer distribution agreement with parent company Corteva, who subsequently received an exclusive license agreement for production and distribution of varieties that SANW had previously controlled.
Favorable Terms. SANW receives $45 million immediately, and $25 million for existing inventory over the next 21 months. The Pioneer distribution agreement had contributed $35 to $40 million in revenue over the past few years, but we had previously modeled a drop off to the $25 to $27 million range for fiscal 2020.
Experienced Management Team with Deep War Chest. We have a high degree of confidence in SANW’s ability to utilize the $70 million inflow prudently via debt reduction and M&A activity. Given the uncertainty regarding timing and scale of acquisitions, we are not including this potential in our model. However, we believe acquisitions announced over the next few quarters will more than offset the revenue lost from the Pioneer agreement and will result in a profitable pro forma model.
A Transformational Move. We believe SANW has been making productive steps in turning around a company that was too concentrated from a geographic, crop and customer perspective. While several major initiatives have been taken, we believe this agreement represents the most significant event in the company’s history. As such, we believe the turnaround that was already well underway is meaningfully accelerated.,” National Securities’ analyst commented.
Other equities research analysts have also issued reports about the stock. Zacks Investment Research upgraded shares of S&W Seed from a sell rating to a hold rating in a report on Wednesday, April 24th. ValuEngine upgraded shares of S&W Seed from a hold rating to a buy rating in a research note on Thursday.
Shares of NASDAQ:SANW opened at $2.69 on Friday. S&W Seed has a 12 month low of $1.81 and a 12 month high of $3.55. The company has a current ratio of 1.59, a quick ratio of 0.34 and a debt-to-equity ratio of 0.12. The firm has a market cap of $89.52 million, a P/E ratio of -12.23 and a beta of 0.50.
S&W Seed (NASDAQ:SANW) last issued its quarterly earnings data on Thursday, May 9th. The company reported ($0.10) EPS for the quarter, topping analysts’ consensus estimates of ($0.16) by $0.06. S&W Seed had a negative net margin of 14.26% and a negative return on equity of 9.19%. The business had revenue of $18.18 million for the quarter, compared to analyst estimates of $13.00 million. Research analysts predict that S&W Seed will post -0.34 earnings per share for the current fiscal year.
A number of hedge funds have recently modified their holdings of SANW. Prescott Group Capital Management L.L.C. acquired a new stake in S&W Seed in the 4th quarter valued at $246,000. Neuberger Berman Group LLC acquired a new stake in S&W Seed in the 1st quarter valued at $266,000. First Manhattan Co. acquired a new stake in S&W Seed in the 1st quarter valued at $182,000. Dimensional Fund Advisors LP increased its stake in S&W Seed by 16.1% in the 3rd quarter. Dimensional Fund Advisors LP now owns 146,276 shares of the company’s stock valued at $358,000 after buying an additional 20,253 shares during the last quarter. Finally, Charles Schwab Investment Management Inc. acquired a new stake in S&W Seed in the 1st quarter valued at $45,000. Hedge funds and other institutional investors own 77.30% of the company’s stock.
S&W Seed Company Profile
S&W Seed Company, an agricultural company, engages in breeding, growing, processing, and selling alfalfa seeds. The company sells its seeds to distributors and dealers in approximately 30 countries worldwide. S&W Seed Company was founded in 1980 and is headquartered in Sacramento, California.
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