American Vanguard’s (AVD) Unit Inks Supply Deal With NewLeaf

American Vanguard Corporation’s AVD fully-owned subsidiary AMVAC Chemical Corporation’s specialty markets division, AMGUARD Environmental Technologies (“AMGUARD”), recently announced that it has signed a supply agreement with NewLeaf Symbiotics to bring biological solutions to significant North American specialty markets.

Per the terms of the deal, AMGUARD will be the sole supplier of NewLeaf products, including bio-stimulants and bio-protection products, for the golf, ornamental, controlled-environment agriculture (CEA), cannabis, and consumer markets in the United States, Canada, and Mexico. It is estimated that these production areas together will comprise slightly above 50 million treatable acres in North America.

The agreement broadens a collaboration between NewLeaf and AMVAC that started in October 2022 to offer biological solutions to North American agricultural crop markets, including the recently introduced BioWake dual-use biological seed lubricant for corn and soybeans.

AMGUARD's specialty markets portfolio is strengthened by the addition of NewLeaf Symbiotics technology and the current product offering of naturally occurring microbes. The company looks forward to working closely with the NewLeaf team to bring their novel biological solutions to the North American specialty markets. The agreement significantly strengthens AVD's strategic growth initiative in GreenSolutions.

Shares of AVD have gained 4.2% against a 5.2% decline in its industry.

On its fourth-quarter earnings call, American Vanguard stated that it is well-positioned in domestic and international markets for 2023. For 2023, the company expects net sales to expand by 8-12% year over year. The year's net sales are projected to be in the $655-$685 million range.

AVD anticipates gross margins to be in the 38-41% range. For 2023, net income is expected to rise 22-34%, while operating expenses are estimated to be between 31% and 33% of net sales.

American Vanguard Corporation Price and Consensus

American Vanguard Corporation price-consensus-chart | American Vanguard Corporation Quote

Zacks Rank & Key Picks

AVD currently carries Zacks Rank #3 (Hold).

Better-ranked stocks worth considering in the basic materials space include Olympic Steel ZEUS, Steel Dynamics STLD, and Linde plc LIN

Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). ZEUS’ earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 26.2% on average. ZEUS has rallied around 40.1% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics currently sports a Zacks Rank #1. STLD’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 11.3% on average. STLD has rallied around 25.2% in a year.

Linde currently carries a Zacks Rank #2 (Buy). Linde’s shares have gained 13.5% in the past year. The company has an earnings growth rate of 8.1% for the current year. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 2.5% upward in the past 60 days. LIN topped the Zacks Consensus Estimate in all the last four quarters. It delivered a trailing four-quarter earnings surprise of 6% on average.

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