Insider Buying

Insider Buying Report: AG Growth International (AFN:CN)

AG Growth International
(AFN:CN)
12 months:
-5.68%
Activity:
Bullish
Pattern:
Purchases from two insiders including Chairman
News:
Good Q4 results
AG Growth International
(AFN:CN)
12 months:
-5.68%
Activity:
Bullish
Pattern:
Purchases from two insiders including Chairman
News:
Good Q4 results
AGI Company Emblem displayed with a collage of products on a white background covered on sides with green blurred images of tractor and production site

Following insider buying at smaller companies can be a very profitable trading strategy. Smaller companies are less researched than larger companies, meaning that they offer greater potential for outperformance.

In this report, we are going to highlight some interesting insider buying at a small Canadian company, AG Growth International Inc (AFN:CN). AG Growth International is a food infrastructure company that provides products and services that help facilitate the storage, blending, mixing, conveying, conditioning, processing, and protection of agricultural inputs and produce around the world. It is listed on the Toronto Stock Exchange and currently has a market capitalization of CAD $789 million.

AG Growth International: Insider Buying

Our data shows that between March 18 and March 25, two insiders at AG Growth International bought stock. Those who were picked up shares were:

  • Chairman William Lambert (10,000 shares @ CAD $42.05 per share)
  • Board member Anne De Greef-Safft (4,500 shares @ CAD $42.63 per share)

Private Equity Experience

This trading activity is worth highlighting due to the fact that both of these insiders have considerable experience in the private equity world.

Mr. Lambert has over 22 years of experience in the private equity and merchant banking industries and was previously a Special Partner of Birch Hill Equity Partners Management Inc. Before that, he was a Managing Director at TD Capital and its successor Birch Hill.

Meanwhile, Ms. De Greef-Safft has been a Strategic Consultant with Windjammer Capital Investors, a middle-market private equity firm, where she is a member of the Board of Directors of two of Windjammer’s portfolio companies. She also provides strategic consulting advice to Windjammer, as well as operational services to its portfolio companies.

Given their backgrounds, it’s fair to assume that they have a good understanding of the company’s intrinsic value.

Record Backlogs

AGI recently posted a strong set of Q4 2021 results.

For the period, sales amounted to $327.1 million, compared to $227.4 million a year earlier, while adjusted EBITDA jumped 61% to $44.7 million. Adjusted profit came in at $19.1 million, up 119% year on year.

The group noted that consolidated backlogs at the end of the year remained strong and were up 47% over December 31, 2020, with broad-based demand for AGI products across all segments and geographies.

Looking ahead, AGI said that it sees strong growth opportunities across all of its segments due to the fact that demand for global food infrastructure remains robust. Given its strong backlogs, it now expects to generate adjusted EBITDA of at least $200 million for 2022, versus $176 million for 2021.

“Backlogs sit at the highest level in our history, providing solid visibility for 2022,” commented President and CEO Tim Close. “The company expects the strong pace of growth to continue into 2022” he added.

In light of the strong backlogs here, we see the insider buying as a bullish indicator.

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