Alliance Grain Traders Posts Improved Results

This company’s trajectory remains pointed in the right direction.

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One of the most intriguing recovery stories in the Canadian small-cap space reported results earlier today.  And the results indicate that the company remains on the road to prosperity.

Alliance Grain Traders (TSX:AGT) checked in with improved results over the year ago period in several critical categories.  Not only were revenues, EBITDA, and earnings up substantially, the company exhibited the continuation of the trend towards an improved cash conversion cycle.

Days inventory outstanding fell to 73 days during the quarter, down from 86 days for the full-year 2012 and 80 days for the second quarter last year.  Days accounts receivable also improved to 69 days, down from 76 in 2012 and 74 in last year’s second quarter.

These figures serve as indication that indeed Alliance Grain Traders’ business is normalizing.  Should this trend continue, the company’s earnings power is significantly higher than where it currently stands, a consideration that the market is currently overlooking.

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Fool contributor Iain Butler owns shares of Alliance Grain Traders.  The Motley Fool does not own shares in any companies mentioned at this time.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

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