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Today, Alico, Inc., a Florida-based agribusiness company with a market capitalization of $224 million, announced the launch of a stock repurchase program. The Board of Directors has authorized the buyback of up to $50 million of its common stock, with the program set to expire on April 1, 2028. According to InvestingPro data, the company’s shares currently trade at $29.38, and analysis suggests the stock is currently overvalued.
This strategic move allows Alico to repurchase shares from the open market, through private transactions, or other means, depending on market conditions and the company’s operational requirements. While InvestingPro data shows the company has maintained dividend payments for 21 consecutive years, it also indicates the company is quickly burning through cash. Repurchases will comply with the volume and pricing rules of Rule 10b-18. Additionally, Alico may engage in Rule 10b5-1 plans to facilitate the repurchase process.
However, the company has clarified that the program does not commit Alico to purchase any specific number of shares. The repurchase plan can be adjusted, paused, or terminated at any time at the company’s discretion.
Investors should note that this announcement contains forward-looking statements, which involve risks and uncertainties. The actual results of the stock repurchase program may vary significantly. InvestingPro analysis reveals several risk factors, including negative EBITDA of $1.11 million and a weak overall financial health score. Factors that could influence the outcomes include market conditions and other risks detailed in Alico’s Annual Report and SEC filings, which are publicly available on their website. InvestingPro subscribers have access to over 10 additional key insights about Alico’s financial health and future prospects.
Alico, Inc., listed on the Nasdaq Global Select Market under the ticker ALCO, specializes in agricultural production and has a history dating back to the early 20th century. While the company’s current ratio of 4.84 indicates strong short-term liquidity, the decision to repurchase shares reflects its ongoing efforts to manage capital and potentially increase shareholder value.
The information for this report is based on a press release statement filed with the Securities and Exchange Commission.
In other recent news, Alico, Inc. reported a notable earnings miss for Q1 FY2025, with an earnings per share (EPS) of -$1.20, significantly below the forecasted -$0.28. Despite this, the company achieved a revenue of $16.9 million, surpassing expectations of $11.5 million. Alico has also announced a strategic shift from citrus production to real estate development, filing a development application for Corkscrew Grove East Village, part of a larger master-planned community in Collier County, Florida. This move aligns with the company’s plan to monetize approximately 5,500 acres over the next five years, valued between $335 and $380 million. Additionally, Alico has amended its credit agreement with MetLife (NYSE:MET) Investment Management, adjusting covenants to better align with its operational needs. The company anticipates generating $20 million in land sales for FY2025, with sufficient cash to cover operating expenses through FY2027. Alico’s strategic transformation aims to unlock value from its land holdings, estimated to be worth between $650 million and $750 million, according to CEO John Kiernan.
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