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What follows is a list of agricultural companies with various degrees of upside. I am most bullish on Potash and Mosaic due to their larger exposure to potash, which I believe can face a better supply-and-demand correction than what the markets are suggesting. These two producers have low multiples while being led by impressive management teams. As incomes rises, especially in emerging markets, the demand for food will increase both earnings and multiples higher.

Potash (NYSE:POT)

Potash trades at a respective 11.9x and 10.2x past and forward earnings with a dividend yield of 1.5%. Consensus estimates for Potash's EPS forecast that it will decline by 1% to $3.47 in 2012 and then grow by 9.8% and 2.1% in the following two years. Assuming a multiple of 14x and a conservative 2013 EPS of $3.78, the stock would hit $52.92 for 36.7% upside.

Potash is the global leader in fertilizer and controls 20% of all of the output and thus has strong control over pricing. Potash margins, however, have fallen significantly from a year ago due to a rise in supply. At the same time, I believe that the market is failing to account for the effects of a full recovery on global demand.

Mosaic (NYSE:MOS)

Mosaic trades at a respective 10x and 9.2x past and forward earnings with a dividend yield of 1.1%. Consensus estimates for Mosaic's EPS forecast that it will fall by 0.2% to $4.40 in 2012 and then grow by 15% and 9.3% in the following two years. Assuming a multiple of 14x and a conservative 2013 EPS of $5.03, the stock would hit $70.42 for 51.5% upside.

During the third quarter earnings call, management noted a challenging environment but emphasized how investments well position the firm. Trends in phosphate look promising while demand has started to pick up in potash above expected levels. The 27% decline in net sales for potash during the third quarter, however, has set the bar low for high risk-adjusted returns.

Archer Daniels Midland (NYSE:ADM)

Archer Daniels trades at a respective 16x and 10.1x past and forward earnings with a dividend yield of 2.2%. Consensus estimates for ADM's EPS forecast that it will decline by 26.2% to $2.56 in 2012, and then grow by 22.3% and 11.2% in the following two years. Assuming a multiple of 12x and a conservative 2013 EPS of $3.08, the rough intrinsic value of the stock is $36.96 for 16.2% upside.

The main catalyst for the company is an industry cut back on supply and labor. At the same time, consumer expenditure uncertainty will drive volatility across the oilseed and corn markets. Accordingly, I recommend a "hold" on ADM for right now.

Source: 3 Agriculture Stocks With Double-Digit Upside