The recent share price decrease of Federal Agricultural Mortgage (NYSE: AGM ) creates an opportunity to re-establish a long position in the financial entity. I currently have a position in two series of preferred shares issued by the financial institution, but theHe is the leader of the investment group European Small Cap Ideas which offers exclusive access to actionable research on appealing Europe-focused investment opportunities not found elsewhere. The a focus is on high-quality ideas in the small-cap s ...

Group 1 - Federal Agricultural Mortgage Corporation (NYSE:AGM) is considered one of the most undervalued financial stocks by Wall Street analysts [1] - CEO Bradford T. Nordholm will retire on March 31, 2027, and Zachary N. Carpenter has been appointed as President and COO, effective immediately [1][2] - Under Nordholm's leadership since October 2018, the company doubled its annual earnings and increased its business volume to over $30 billion [2][4] Group 2 - The Board's decision for Carpenter's promotion followed a year-long evaluation process, which included amendments to Nordholm's employment agreement [3] - Carpenter's base salary and long-term incentive eligibility were increased as part of the transition plan [3]

With significant revenue and dividend growth, Federal Agricultural Mortgage Corporation (NYSE:AGM) makes our list of the 20 Best Stocks to Buy and Hold for a Lifetime. Carpenter Will Immediately Assume Greater Responsibility as CEO Following Nordholm’s Retirement, Federal Agricultural Mortgage Corporation (AGM) Announces On September 25, 2025, Federal Agricultural Mortgage Corporation (NYSE:AGM) announced that Carpenter will immediately assume greater responsibility as CEO following Nordholm’s retirement ...

Core Insights - The Zacks Rank focuses on earnings estimates and revisions to identify strong stocks, while also considering value, growth, and momentum trends [1] - Value investing is a preferred strategy for finding undervalued stocks through fundamental analysis and traditional valuation metrics [2] Company Analysis - Federal Agricultural Mortgage (AGM) is highlighted as a strong value stock, currently holding a Zacks Rank of 2 (Buy) and a Value grade of A [3] - AGM has a Price-to-Sales (P/S) ratio of 1.27, which is lower than the industry average P/S of 1.89, indicating potential undervaluation [4] - The combination of AGM's strong earnings outlook and favorable valuation metrics positions it as one of the market's strongest value stocks [5]

Core Insights - Joseph Jones, a professor with over fifteen years of market study experience, emphasizes portfolio construction from a dividend growth investor's perspective [1] Group 1 - The insights expressed in the research are solely those of Joseph Jones and do not represent the views or financial interests of his employer [1]

Summary of Federal Agricultural Mortgage (AGM) Update / Briefing September 03, 2025 Industry Overview - The briefing focuses on the agricultural sector, specifically the USDA's farm income and wealth statistics for 2025, highlighting the financial health of farmers and the impact of government payments on farm income [80][81]. Key Points and Arguments 1. **USDA Data Release**: The USDA's revision for farm income is a significant event, with expectations of changes in net cash farm income and government payments [33][80]. 2. **Net Cash Farm Income Forecast**: The USDA forecasted net cash farm income for 2025 at $180.7 billion, representing a downward revision of approximately 5-7% from previous estimates [98][100]. 3. **Government Payments**: There is a notable decrease in government payments, with a drop of $3 billion, which may be attributed to timing issues and changes in program qualifications [116][119]. 4. **Crop and Livestock Performance**: - Livestock revenues are expected to increase significantly, particularly in beef and dairy sectors, while crop receipts remain largely unchanged from previous forecasts [113][115]. - The overall profitability across sectors shows livestock up slightly, while crops are down, reflecting market conditions [90]. 5. **Increased Costs**: - The USDA anticipates a $30 billion increase in cash expenses for farmers, driven by higher feed costs and interest expenses [122][128]. - Feed costs are projected to rise from $62 billion to over $68 billion, indicating increased financial pressure on farmers [125]. 6. **Debt Levels**: - Total debt is expected to rise by $30 billion in 2025, with real estate debt increasing significantly, reflecting higher borrowing needs among farmers [135][136]. - The debt-to-asset ratio may begin to rise, but remains below historical levels from the 1980s, indicating a relatively stable financial environment [146]. 7. **Market Sentiment**: Farmers are experiencing a shift in sentiment as they begin to see better-than-expected crop yields, leading to a more optimistic outlook despite lower prices [57][59]. Additional Important Insights 1. **Equity and Asset Values**: The USDA revised down the total value of real estate assets by $45 billion, despite an increase in farmland values, indicating a complex market dynamic [134]. 2. **Family Living Expenses**: Family living expenses are rising and may not decrease as quickly, contributing to overall financial strain on farmers [150][151]. 3. **Regional Variations**: There are regional differences in crop performance, with some areas, like the West Coast, seeing better prices for specific crops such as almonds [156]. This summary encapsulates the critical insights from the briefing, providing a comprehensive overview of the current state of the agricultural sector as reflected in the USDA's latest data.

Core Viewpoint - Federal Agricultural Mortgage (AGM) is currently positioned as a more attractive investment option compared to Zillow Group (ZG) based on various valuation metrics and earnings outlook [3][7]. Valuation Metrics - AGM has a forward P/E ratio of 10.18, significantly lower than ZG's forward P/E of 43.50, indicating that AGM may be undervalued [5]. - The PEG ratio for AGM is 0.93, while ZG's PEG ratio stands at 1.41, suggesting that AGM offers better value relative to its expected earnings growth [5]. - AGM's P/B ratio is 1.73, compared to ZG's P/B of 3.87, further highlighting AGM's relative undervaluation [6]. Earnings Outlook - AGM is exhibiting an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model, indicating a positive trend in earnings estimate revisions [3][7].

Group 1: Earnings Performance - Federal Agricultural Mortgage (Farmer Mac) reported quarterly earnings of $4.32 per share, exceeding the Zacks Consensus Estimate of $4.29 per share, and up from $3.63 per share a year ago, representing an earnings surprise of +0.70% [1] - The company posted revenues of $100.51 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.11%, compared to year-ago revenues of $89.87 million [2] - Over the last four quarters, Farmer Mac has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - Farmer Mac shares have declined approximately 12.3% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $4.40 on revenues of $98.12 million, and for the current fiscal year, it is $17.30 on revenues of $391.66 million [7] Group 3: Industry Context - The Zacks Industry Rank indicates that the Financial - Mortgage & Related Services sector is currently in the bottom 9% of over 250 Zacks industries, suggesting potential challenges for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - The company achieved record results with core earnings growing 19% year over year, reaching $47,400,000 [5][6] - The net effective spread increased over 12% compared to the same period last year, totaling $93,900,000 [5][6] - Total outstanding business volume surpassed $30,000,000,000 for the first time [5][6] Business Line Data and Key Metrics Changes - The infrastructure finance line of business grew by $644,000,000, reaching $10,400,000,000 [16] - The renewable energy segment saw a 122% year-over-year increase, growing by $332,000,000 to nearly $2,000,000,000 [16] - The broadband infrastructure segment increased by $200,000,000, totaling $1,200,000,000 [17] - The agricultural finance line of business volume increased by $188,000,000, reaching $20,200,000,000 [18] Market Data and Key Metrics Changes - The company reported a strong demand for electric power and renewable energy investments, contributing to the growth in the infrastructure finance line [16] - The agricultural economic tightening and potential trade policy changes are expected to drive loan purchase growth in the agricultural finance segment [18][19] Company Strategy and Development Direction - The company is focusing on diversifying its loan portfolio into newer lines of business such as renewable energy and broadband infrastructure [6][12] - The strategic decision to repurchase shares was made to enhance capital management, increasing the authorized repurchase amount from $9,800,000 to $50,000,000 [11][12] - The company aims to optimize its capital position while maintaining a strong liquidity and capital level [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the overall health of the portfolio, citing strong asset quality metrics [6][10] - The company is closely monitoring industry and credit conditions in light of new government policies [11][14] - Management remains optimistic about future growth, supported by a diversified business mix and effective risk management practices [22] Other Important Information - The company recorded a net provision for losses of $7,800,000, influenced by specific borrower relationships and downgrades in the infrastructure finance line [8][9] - The passage of HR1 legislation is expected to positively impact the company and its stakeholders, particularly in the agricultural sector [14][19] Q&A Session Summary Question: What is the outlook for spreads? - Management indicated that the outlook for spreads remains stable, with growth in newer segments contributing positively [26][31] Question: Can you elaborate on the tax credits mentioned? - The tax credits reduce tax expenses, resulting in an effective tax rate below the statutory rate for the quarter [36][37] Question: What is the impact of HR1 on farm and ranch loan demand? - The provisions in HR1 are expected to provide savings to farmers, although they may not significantly alter the company's earnings projections [44][45] Question: What are the details of the $7,800,000 credit provision? - The provision included a $2,800,000 charge-off related to two loans, one of which has since recovered [63][66] Question: How does the share repurchase fit into capital allocation priorities? - Share repurchase is viewed as an opportunistic tool, separate from the company's consistent dividend strategy [73][80]

Financial Performance Highlights - Farmer Mac achieved core earnings of $93331 thousand YTD 2025[66] - Net Effective Spread was $183883 thousand YTD 2025[66], with a Net Effective Spread percentage of 118%[66] - The company maintained a Tier 1 Capital Ratio of 136% in Q2 2025[38] - Farmer Mac's revenue has a 10-Year Compound Annual Growth Rate (CAGR) of 112%[21] Business Segments - Farm & Ranch Finance segment reported a net volume of $182 billion[30], contributing to 33% of the overall segment volume[30] - Corporate AgFinance segment had a net volume of $2 billion[30], accounting for 26% of the segment volume[30] - The Renewable Energy segment's net volume was $19 billion[30], representing 7% of the total segment volume[30] - P & U Infrastructure Finance segment recorded a net volume of $73 billion[30], making up 20% of the segment volume[30] Capital and Dividends - Core Capital above the Statutory Minimum was $602106 thousand in Q2 2025[66] - The company has increased quarterly dividend payments for 14 consecutive years[42], with a 7% year-over-year increase in 2025[42] Credit Quality - Farmer Mac's average charge-offs are 002% of assets, outperforming the Banks average of 016% and the Farm Credit System average of 009%[46] - The average portfolio Loan-to-Value (LTV) was 47% as of June 30, 2025[44]