BrasilAgro Is A Bet On Commodities Bullishness At These Prices

Summary

• BrasilAgro owns and cultivates profitable agricultural lands in Brazil, Paraguay and Bolivia. The company's holdings are profitable even during downward portions of the cycle.
• BrasilAgro acquired most of its lands in the 2000s, when prices where much cheaper, and carries a lot of undervalued land. Management has also carried great cost reductions.
• However, those extraordinary profits cannot be projected to the future because BrasilAgro has not continued purchasing cheap land.
• On a purely operational basis, BrasilAgro can generate between $11 and $25 million in net income per year. That is a long shot from a market cap of $650 million.
• Until BrasilAgro confirms that it can acquire cheap land again, I ask for a depressed price on the company.

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BrasilAgro - Companhia Brasileira de Propriedades Agrícolas (NYSE:LND) is a Brazilian land developer with operations in Brazil, Paraguay and Bolivia. The company specializes in soybean, corn, sugarcane, bean, cotton, and cattle.

Last December, I wrote

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.