AGCO Corporation (NYSE:AGCO) is a focused play on the rapid growth in food demand (particularly proteins) and an increase in the sophistication of farming methods in China and Africa. This macro trend is generally well understood by investors, but the valuation of AGCO's shares does not appear to reflect the company's superior long-term positioning as the leader in frontier markets. At about 9 times 2013's estimated GAAP EPS of $5.50-5.75, AGCO shares are a highly inexpensive way to gain exposure to the developing world's agricultural boom.
In 2011, AGCO generated about two-thirds of its sales from tractors, 15% from parts, and the remainder from combines, hay and forage, and other agriculture-related products. With such a heavy...
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