Sadot Group Inc. (NASDAQ: SDOT)

Sector: Consumer Defensive Industry: Farm Products CIK: 0001701756
Market Cap 2.36 Mn
P/B 0.11
P/E -0.18
P/S 0.01
ROIC (Qtr) -31.57
Div Yield % 0.00
Rev 1y % (Qtr) -99.86
Total Debt (Qtr) 11.59 Mn
Debt/Equity (Qtr) 0.56
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About

Sadot Group Inc., also known as SDOT, operates in the Agri-food commodity supply-chain industry, including farming, commodity trading, and shipping operations. The company's primary business activity is carried out by its largest operating unit, Sadot Agri-Foods, which is a global player in sustainable farming, commodity trading, and shipping of food and feed products. Sadot Agri-Foods competes with well-established companies such as ADM, Bunge, Cargill, and Louis-Dreyfus, also known as the ABCD commodity companies. The company's competitive advantage...

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Investment thesis

Bull case

  • Operating cash flow of (16.98M) provides exceptional 44.58x coverage of minority interest expenses (381000), showing strong core operations.
  • Operating cash flow of (16.98M) provides strong 73.52x coverage of stock compensation (231000), indicating sustainable incentive practices.
  • Robust free cash flow of (11.56M) exceeds capital expenditure of (5.42M) by 2.13x, indicating strong organic growth funding capability.
  • Strong tangible asset base of 72.96M provides 6.30x coverage of total debt 11.59M, indicating robust asset backing and low credit risk.
  • Tangible assets of 72.96M provide robust 33.65x coverage of other current liabilities 2.17M, indicating strong asset backing.

Bear case

  • Operating cash flow of (16.98M) barely covers its investment activities of 5.42M, with a coverage ratio of -3.13, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • High receivables of 29.05M relative to inventory of 154000 (188.66 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of (11.56M) represents just -1.38x of debt issuance 8.39M, suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of (16.98M) barely covers operating expenses of 4.46M with a -3.81 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • Cash position of 581000 provides weak coverage of payables of 35.43M, which is 0.02x, indicating potential working capital stress and supplier relationship risks.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Farm Products
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ADM Archer-Daniels-Midland Co 33.15 Bn 30.75 0.41 9.76 Bn
2 TSN Tyson Foods, Inc. 21.32 Bn 106.61 0.39 8.36 Bn
3 BG Bunge Global SA 15.29 Bn 238.98 0.33 17.78 Bn
4 CALM Cal-Maine Foods Inc 3.98 Bn 1,160.43 2.88 0.00 Bn
5 FDP Fresh Del Monte Produce Inc 2.34 Bn 23.44 0.67 0.34 Bn
6 DOLE Dole plc 1.56 Bn 105.27 0.17 1.33 Bn
7 VITL Vital Farms, Inc. 1.26 Bn 20.76 1.77 0.06 Bn
8 AGRO Adecoagro S.A. 0.87 Bn 37.23 0.63 1.61 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.18 0.83
EV to Cash from Ops. EV/CFO -0.78 2.92
EV to Debt EV to Debt 1.14 3.55
EV to EBIT EV/EBIT -1.70 0.40
EV to EBITDA EV/EBITDA -1.09 -24.51
EV to Free Cash Flow [EV/FCF] EV/FCF -1.15 1.40
EV to Market Cap EV to Market Cap 5.61 3.04
EV to Revenue EV/Rev 0.03 0.77
Price to Book Value [P/B] P/B 0.11 0.54
Price to Earnings [P/E] P/E -0.18 89.91
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -21.77
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 42.88
Dividend per Basic Share Div per Share (Qtr) 0.00 0.97
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.76
Interest Coverage Int. cover (Qtr) -1.46 -31.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7,540.85 -1,577.17
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -39.60 86.77
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 11.26
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -267.69 -87.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -362.56 -202.55
EBIT Growth (1y) % EBIT 1y % (Qtr) -270.46 -99.71
EBT Growth (1y) % EBT 1y % (Qtr) -989.17 -133.79
EPS Growth (1y) % EPS 1y % (Qtr) -558.59 -151.42
FCF Growth (1y) % FCF 1y % (Qtr) -218.08 135.44
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -59.53 -28.83
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 6.36 1.37
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.12
Cash Ratio Cash Ratio (Qtr) 0.01 0.98
Current Ratio Curr Ratio (Qtr) 0.97 2.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.56 -1.90
Interest Cover Ratio Int Coverage (Qtr) -1.46 -31.98
Times Interest Earned Times Interest Earned (Qtr) -1.46 -31.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -1.70 691.86
EBIT Margin % EBIT Margin % (Qtr) -1.68 650.76
EBT Margin % EBT Margin % (Qtr) -2.83 644.45
Gross Margin % Gross Margin % (Qtr) 1.40 -69.17
Net Profit Margin % Net Margin % (Qtr) -2.80 644.34