Daniel W

Eight GPS Stocks to Help Point Your Portfolio in the Right Direction

Amazing that HEM wasn't mentioned here. It's currently selling for ~15 times 2008 earnings, in an agriculture industry where there is a lack of stocks to match the lack of inventories and which should do well even if global growth slows somewhat.

MOO is a great index of agriculture names but it has yet to include HEM--and the only reason I can see is that until recently it's market cap was to low. (The requirement is at least 150 million, a mark that HEM passed not to long ago.) Without a doubt, HEM is more of a pure play on the booming ag economy than many others included in that fund.

Many others, from indexes and funds to individuals, don't own this one simply because (I think) they don't know about it. But it is, in my opinion, one of the best deals in the ag sector--an opinion that is backed up by lower forward multiples (despite just as good and probably much better growth potential).

The obvious conclusion is that, when the buying starts in earnest (from the sources mentioned above), HEM shares are going much higher. Although it's selling for 3.60 now, 6 dollars seems a reasonable target for 2008. That would be roughly 25x earnings, and also in-line with recent acquisitions in the space.

--Daniel
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