NEW YORK, Dec. 15, 2004 (PRIMEZONE) -- (Investrend Research Syndicate) Fundamental Research Corp. has released an 11-page update on Bevo Agro Inc. (TSX Venture Exchange:BVO).
The full report, dated December 8, 2004, which includes important disclosures, is available free for a limited time at www.fundamentalresearchcorp.com.
According to the report, the company's YE2004 revenues were virtually inline with expectations with strong Q4 results. However, the analyst notes that the success in Q4 did not translate to similar performance in Q1 2005, which produced lower than expected results. The report attributes some of Q1's results to delayed orders related to issues in the tomato industry. The analyst expects orders typically booked in Q1 to be delayed to Q2. Other reasons for the lower than expected Q1 were increased costs related to the company's recent expansion.
Fundamental research revised its models to account for higher costs; a delay in the realization of full expansion benefits to 2006, inline with historical results; and increased competition in the industry. The report remains positive on the outlook for the company citing current expansion efforts by Bevo's customers and industry reports forecasting growth in the sector. The net result of the revisions was a lowering of EPS and fair value estimates. Through an analysis of other agricultural related companies and their DCF model, Fundamental Research is of the opinion that the company remains undervalued. "What is clear from this exercise is that the market is clearly not in favor of agricultural companies at the moment which usually presents a good opportunity for value investors given the low multiples in the sector."
Fundamental Research Corp. is a research provider to Investrend Research and a member of the FIRST Research Consortium which sets the standards and ethics for independent research agreed to by all members of the association. A fee of less than $10,000 was provided to Fundamental by the company for research coverage.
The full report is available for a limited time at: www.fundamentalresearchcorp.com and www.investrendresearch.com . Investors are advised to read disclosures carefully before trading in the equities of any enrolled company.
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