Using discounted free cash flow as a primary valuation tool comes with certain drawbacks. Looking at the reaction to American Vanguard's (NYSE:AVD) warning on second quarter earnings brings one of the biggest back to mind - namely, that sell-side analysts and buy-side investors don't look at stocks this way and it can create significant disruptions for more long-term-oriented investors. While American Vanguard shares are going to sit in the sin bin for a while now, and a lot of the positive 2013 momentum may be sapped from this stock, relatively little about the long-term has changed.
Rain Has Soaked The Story
It's not exactly news that cold (relatively speaking) and rainy weather has had a definite impact...
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