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Astral Foods (ARL.JO)

Consumer · JSE · South Africa

R211.23-7.96% today

Fundamentals

Market capR8.32B
P/E ratio5.2
Dividend yield9.53%
Revenue growth (YoY)+11.4%
Profit margin6.7%
Return on equity29.7%
52-week rangeR168.72 to R283.90

Valuation and ratings

DCF fair valueR473.00
Upside to fair value+123.9%
Analyst target (mean)R290.00
Analyst rangeR290.00 to R290.00
Analysts covering1
Consensus viewnone
Moat score55/100
Overall rating75/100, Strong Buy

Astral Foods trades at R211.23, which is 124% below the R473.00 our discounted cash flow model puts on the business. On that measure alone it screens as undervalued, though a DCF is an argument rather than a measurement, and the market is frequently right about why something is cheap.

Our moat model scores it 55 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.

It changes hands at 5.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.

About Astral Foods

Astral Foods Limited operates as an integrated poultry producer in South Africa and internationally. The company operates through Poultry and Feed segments. It also engages in the marketing, sale, and distribution of fresh and frozen poultry products; broiler genetics and integrated breeder; engaged in the abattoir and further processing operations; and sale of day-old chicks and hatching eggs. The company also produces and sells feed products for farmed animal species; and provides laboratory analytical services to the animal feed industry. It offers its products under the Goldi, County Fair, Festive, Meadow Feeds, National Chicks, Ross, CAL, Tiger Chicks, Tiger Animal Feeds, Mountain Valley, and Earlybird brands. The company was founded in 2001 and is based in Gauteng, South Africa.

Industry: Farm ProductsEmployees: 9,310HQ: South Africa

ARL.JO passes 6 of our 30 screens today

Each screen prints the exact criteria it used, and the circumstances in which it is wrong.

Undervalued on cash flow
Companies trading at least 25% below what our discounted cash flow model says the future cash is worth today.
Deep value, with a pulse
A very low earnings multiple is usually a warning. This screen demands a low multiple AND evidence the business still works.
Dividend powerhouses
Yields above 3%, filtered for the one thing yield screens never check: whether the company can actually afford it.
High return on equity, low debt
A high ROE is easy to fake with borrowing. This screen demands the return without the leverage, which is a much shorter list.
Fortress balance sheets
Companies that owe almost nothing. They will survive things that kill their competitors, and they can buy the wreckage afterwards.
Growth at a reasonable price
Real growth, without the multiple that usually comes attached to it. The middle ground between value and growth, and the hardest place to find anything.

Common questions

Is Astral Foods (ARL.JO) undervalued?

Against our discounted cash flow estimate of R473.00, ARL.JO at R211.23 is 124% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.

What is ARL.JO's P/E ratio?

ARL.JO trades at 5.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.

The full research page for ARL.JO, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.

Open ARL.JO in the appFree guides and screens

Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.