Is Arts-Way Manufacturing Co. Inc. (NASDAQ: ARTW) Stock a Buy?

By Kirsteen Mackay

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Arts-Way Manufacturing Co. Inc (NASDAQ: ARTW) is a manufacturing company producing agricultural machinery.

Arts-Way Manufacturing Co. Inc (ARTW) closed at $5.17 after shares jumped by 11.88% during Thursday's session.

What is Art’s Way Manufacturing Company?

Art’s Way Manufacturing Company is an American manufacturer of agricultural machinery.

It sells agricultural products, modular buildings and machine tools. The Agricultural Products segment covers its own-label products including animal feed processing equipment and a crop production line.

Art’s Way has approximately 140 employees and operates its three business units in three facilities.

The company is seeking opportunities to grow the business organically and may diversify through M&A. The company was founded by Arthur Luscombe in 1956 and is headquartered in Armstrong, Iowa. 

Last year the company launched a new branding initiative and Dave King, Art’s Way CEO, said:

“We’re excited to elevate the Art’s Way brand and promote the impressive work our customers do every day to improve their operations,”

Why ARTW Stock Climbing this Year?

ARTW stock is up over 45% year-to-date and has been on an upward trajectory since January 2020. Over the past year, Arts-Way Manufacturing Co. Inc. (ARTW) has traded between $2.83 and $5.30.

Financial Metrics Today

Market Cap: $23m

Art’s Way’s agricultural products segment saw a 28.6% increase in sales from the 2020 fiscal year and its first profitable year since fiscal 2015.

COVID-19 caused problems for the company but things are picking up. The Modular Buildings segment finished with a profit for fiscal 2021.

Meanwhile, the Tools segment experienced a steady rise in demand. Labor shortages proved challenging but the company has since improved its wage and benefits package.

As of November 30, 2021

  • Consolidated Net Income: $213k

  • Credit Available: $925.4k

Key Comps

Although it has some much larger competitors with greater resources, Art’s Way believes its diversified revenue base, sales presence and customer base helps protect it.

The company currently distributes goods for its Agricultural Products segment primarily through a network of approximately 1,000 US and Canadian independent dealers, as well as overseas dealers in Australia, Japan and the United Kingdom, whose customers require specialized agricultural machinery. 

AGRI's rivals and comparable companies include:

  • Oxbo International Corporation (private)

  • AGCO Corporation (NYSE: AGCO)

  • Kuhn North America (private)

  • Teagle Machinery (private)

  • Deere & Co (NYSE: DE)

  • CNH Industrial (NYSE: CNHI)

Investing in ARTW stock

Art’s Way is seeing growing demand for its agricultural products at the start of fiscal 2022 and believes another year of continued improvement lies ahead.

The COVID-19 pandemic continues to disrupt the global supply chain, labor market, and general economic activity. Nevertheless, the company does not foresee liquidity issues within the next twelve months.

Many retail investors prefer funds to individual stocks as financial professionals operate them with inside knowledge and insight. 

ARTW shares could alternatively be purchased via a mutual fund to potentially reduce investment risk and volatility.

For instance, ARTW stock is currently present in the following mutual funds:

  • Fidelity Extended Market Index Fund

  • Bridgeway Omni Small Cap Value Fund

  • Bridgeway Omni Tax Managed Small Cap Value Fund

  • Vanguard Extended Market Index Fund

  • DFA US Social Core Equity 2 Portfolio

Junior stocks are speculative and prone to volatility, but Art’s Way may benefit from rising commodity prices.

If you are interested in small-cap stocks why not read our IPO coverage.

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In this article:

Topics:
Agricultural and Farm Machinery
Agriculture
Industries:
Industrials

Author: Kirsteen Mackay

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Kirsteen Mackay does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above article.

Kirsteen Mackay has not been paid to produce this piece by the company or companies mentioned above.

Digitonic Ltd, the owner of ValueTheMarkets.com, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of ValueTheMarkets.com, has not been paid for the production of this piece by the company or companies mentioned above.

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