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The MoneyLine Report is back with more breaking news from the Multi-Billion Dollar Agriculture Sector......July 2002 The MoneyLine Report "A Premium Investor Relations Service" Symbol: AMCG Congratulations to All Who Bought Into HUMT - First Recommended at 0.76 It peaked at $1.10 - a 47% Increase In Only 2 Days - CLICK HERE
Our Featured Stock, American Group, Inc. (OTCBB: AMCG), first appeared on data-stream charts back in Feb. 1999 with the announcement that they were breaking ground on their $1.5 million soil-blending plant in Homestead, Florida. Among the many financial news media to spotlight American Group at the time was CNBC's On the Edge, which featured The American Group in March of 1999, and Investor's TV News Magazine, which interviewed Eric W. Deckinger, president, in July of that same year. Now, AMCG has once again popped-up on our charts, announcing they have now completed their state-of-the-art soil-blending plant, and that it is open for business. For this reason, and the continued underlying strength of the Agriculture Sector, we have upgraded AMCG to a Strong Buy Recommendation.
The American Group, Inc. The American Group Inc. operates subsidiaries in the floriculture and environmental horticulture market, the fastest growing segment of U.S. agriculture, typically increasing an annual $500 million in grower cash receipts. The American Group, Inc. (AMCG) operates two subsidiaries: Torland,
a Canadian harvester and producer of Sphagnum
peat moss, controls a 5000 acre peat moss bog which has an estimated
$450 million in reserve potential and presently exports the majority
of its production to the United States for sale through Agro Soils. These subsidiaries have immediate operating synergies and should result in increasing operating margins during the current fiscal year. The subsidiaries have a present annualized revenue base of about $5.4 million and expect to be profitable this year. Three related markets comprise the AMCG customer base. In Southeast Florida, primarily, commercial nurseries provide a steady year round demand for AMCG's product. Golf courses are being built nationwide, but Florida probably sees more new courses per capita than any other state. The established courses require constant maintenance, so both new and existing courses create a steady year-round demand for custom golf course media as top dressings. Landscaping contractors also create a steady demand for the company's product, which is used in new developments and in maintaining existing developments, both commercial and residential. Building and zoning codes grow continually more stringent, and they require increased amounts of landscaping and larger "green" areas. Other markets include municipal athletic fields, stadiums and parks. For information on AMCG go to www.theamericangroupinc.com.
The Multi-Billion Dollar Market The USDA ranks floriculture and environmental horticulture as the second most important agricultural sector in the U.S. Grower cash receipts from sales of floriculture and nursery crops continued to rise...reaching $13.3 billion in 2001 (Source: FLORICULTURE AND ENVIRONMENTAL HORTICULTURE YEARBOOK -- SUMMARY May 23, 2002 May 2002, ERS-FLO-2002 - Approved by the World Agricultural Outlook Board) Extensive Research completed in June 2000 shows $10.9 billion in grower receipts. Floriculture and environmental horticulture crops ranked as the United States' seventh most-important commodity group behind cattle and calves, dairy products, corn, hogs, and soybeans.(1) By 1998, American grower receipts were valued at $12.1 billion.(2) While these are impressive figures, it must be noted that they only represent a fraction of the over all American "green industry." In 1998, retail expenditures for all floriculture and environmental horticulture products, as estimated by the Economic Research Service, reached $54.8 billion, or $203 per capita.(3) The $54.8 billion makes the U.S. the world's largest market for floriculture and environmental horticultural products. While the U.S. represents the largest market, it is also the largest producer of floriculture and environmental horticultural products. Commercial growers can be found throughout the U.S. However, production tends to be concentrated in the southern states where the climate is more temperate. In fact, ten States account for more than two-thirds of the total U.S. output, Florida accounting for 11% of that. Furthermore, according to a University of Georgia study, the floriculture and environmental horticulture sector ranks as the second most important segment in U.S. agriculture, behind beef and beef products. This study takes into account an industry's total economic output, or the value of the industry and its closely associated business activities, such as product handling, marketing, and distribution.(6) Market Trend, Sales Trends, and more...CLICK HERE
Facts & Comparisons Canada generally exports more than 75% of its peat moss to developed countries around the world with the U.S. and Japan representing the major customer base. Since 1995, the Canadian peat moss industry has exported over 750,000 tons of peat representing more than $210 million in sales. Presently, Canada exports over $240 million of peat moss annually. Premier Horticulture, a subsidiary of Premier Tech and one of the larger peat moss producers in Canada, recorded sales in the amount of $11.88 million. Premier Tech stock trades on the Toronto Stock Exchange between $2.50 and $2.75 Canadian and currently maintain a market cap of approximately $22.7 million U.S. Clearly, the potential production and demand for Canadian peat moss is significantly greater than the current output and represents a very significant opportunity for companies that have both the land potential and expertise to capitalize on the opportunity.
Investor Conclusion The MoneyLine Report has found a growth-driven company in The American Group, Inc. AMCG has completed construction of its Agro Soil mixing and distribution plant allowing for a production capacity of $15 million. If AMCG over the next several years obtains maximum production output from its subsidiary, Agro Soils, and can perform as well as Premier Horticulture, revenues for AMCG will grow to the $15 million-plus range. Gross margins will be approximately 20%, according to management. This would give AMCG earnings of approximately $3 million, or approximately $0.32 per share. At a conservative 10 P/E, which is the average Price/Earnings Ratio for these industries, AMCG would be worth $3.20/share, so you can see why we are excited about this stock. Combine these elements with a public float of less than 900,000 shares and you can understand why we are putting a Strong Buy on AMCG and the $2.75 target price is definitely obtainable. The MoneyLine Report feels that AMCG will grow rapidly with opening of their new soil mixing plant. The MoneyLine Report looks for AMCG to break out very soon.
The MoneyLine Report is an independent newsletter and is not affiliated with American Group, Inc.
The MoneyLine Report is an independent research firm. This report is based on The MoneyLine Report's independent analysis but also relies on information supplied by sources believed to be reliable. This report may not be the opinion of AMCG management. The MoneyLine Report has also been retained to research and issue reports on AMCG and was paid ten thousand dollars by a shareholder of the company. The MoneyLine Report may from time to time buy or sell AMCG common shares in the open market without notice. The information contained in this report is not intended to be, and shall not constitute, an offer to sell or solicitation of any offer to buy any security. It is intended for information only. Some statements may contain so-called "forward-looking statements". Many factors could cause actual results to differ. Investors should consult with their Investment Advisor concerning AMCG. Copyright 2002 © The MoneyLine Report Ltd All Rights Reserved
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