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American Vanguard Corp. (AVD), Rollins, Inc. (ROL): Can a Killing Be Made From These Pest Killers?

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Pests that threaten both crops and humans have always been a bane for mankind. Investing in equities tied with pest control hence can be as rewarding as the benefits they bring in terms of improved agricultural productivity and the protection they provide to populations’ well-being.

One such probable choice is American Vanguard Corp. (NYSE:AVD) , a company with a diversified interest in specialty and agricultural products for the crop protection, turf and ornamental markets, and for public health applications. One of its subsidiaries, American Vanguard Corp. (NYSE:AVD) Chemical, has a diverse insecticide product portfolio which includes botanical and corn soil insecticides, as well as non-crop insecticides and public health insecticides. Repellents, soil fumigants, cotton defoliant, herbicides, plant growth regulators, and fungicides including those for non-crop applications are its other products.

A worldwide bug hunt

Rollins, Inc. (NYSE:ROL) is another pest control company to consider. Rollins, Inc. (NYSE:ROL) provides pest and termite control services not only to residential and commercial customers in North America. It also has international franchises in Mexico, Central America, the Caribbean, the Mediterranean, Asia, Europe, the Middle East, and Africa. The company operates via four wholly owned subsidiaries. One of these, Orkins, is reputedly the world’s largest pest and termite control company, with a presence in more than 400 locations.

Rollins, Inc. (NYSE:ROL) reported its 28th consecutive quarter of earnings improvement as its 2013 first quarter revenue grew 3.5% to an unaudited $299.7 million from $289.5 million a year earlier. Net income for the 2013 first quarter was essentially flat at $23.2 million or $0.16 per diluted share, compared year over year with $23.1 million or $0.16 per diluted share.

Weather twist restrains growth

The company’s vice chairman and CEO, Gary W. Rollins, Inc. (NYSE:ROL), said an expected acceleration of pest control sales in the 2013 first quarter didn’t pan out as the past winter turned out to be the coldest with snowfall the greatest in decades. This had a negative impact on profits as the company was staffed for an anticipated pick-up in sales activity.

Notably, Rollins, Inc. (NYSE:ROL) came off with record results in the 2012 first quarter due to the weather turning out as the warmest in more than a century, resulting in increased pest activity. The company remains geared for growth in the balance of 2013, particularly with the summer getting warmer. “Thankfully, the bugs always come back,” the Rollins, Inc. (NYSE:ROL) CEO quipped.

Take more besides bugs

American Vanguard Corp. (NYSE:AVD), on the other hand, has more than bugs to be go after as it posted record results for its 2013 first quarter. Strong demand for its corn herbicides and insecticides drove net sales for the period 39% higher to $121.5 million from $87.3 million a year earlier. The company’s net income advanced 94% to $16.9 million from $8.7 million, and earnings per diluted share rose 90% to $0.59 from $0.31.

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