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Finding value in this market is getting much harder than it was several months before the big rally -- including today's bump up after the latest "sugar high" delivered by Helicopter Ben. However, there are still some pockets of value out there for those willing to look. I like the ag sector right now as it has had some worries about the recent massive drought, but still sports very low valuations. One stock I like here is AGCO Corporation (NYSE:AGCO), which is still dirt cheap and has insiders who are starting to snap up shares.

Here are some recent positives for AGCO:

  • Insiders have bought almost $3 million worth of new shares over the past couple of months.
  • Consensus earnings estimates have moved up nicely for FY 2012 and FY 2013 over the last two months.
  • Investors are coming to realize that the massive drought in the country is not going to impact farm equipment sales that much.

According to the business description from Yahoo Finance, "AGCO Corporation manufactures and distributes agricultural equipment and related replacement parts worldwide."

Here are four reasons why AGCO is still undervalued at just over $45 a share:

  1. The stock is selling near the bottom of its five-year valuation based on P/E, P/B, P/S, and P/CF.
  2. Analysts consistently underestimate this company's earnings power. AGCO has now beat earnings estimates for 12 straight quarters. The average beat over consensus has been 20% over the past four quarters.
  3. AGCO sports a five-year projected PEG of under 1 (0.63) and sells for less than 8 times forward earnings, a discount to its five-year average (14.9).
  4. From a comparison perspective (using P/E and P/S), it is priced under direct competitors Deere (NYSE:DE) and CNH Global (NYSE:CNH).
Source: Buying This Cheap Ag Stock Along With Insiders