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Adecoagro: Undervalued And Poised For A Breakout As Commodities Cycle Higher

Jul. 31, 2023 11:18 AM ETAdecoagro S.A. (AGRO)BG, CRESF, CRESY, SAP:CA, SAPIF, WEAT17 Comments


  • Adecoagro emerges as a major player in the production of crops, rice, dairy, sugar, ethanol and renewable energy in Latin America.
  • It distinguishes itself by output diversification, vertical integration and, in recent years, growth.
  • This analysis suggests that Adecoagro appears to be in the middle of an unfolding agricultural commodity up-cycle, and that it is still undervalued.
  • I do much more than just articles at The Natural Resources Hub: Members get access to model portfolios, regular updates, a chat room, and more. Learn More »
Countryside landscape with cows grazing, La Pampa, Argentina

Foto4440/iStock via Getty Images

Recent news concerning the disrupted Black Sea grain trade once again sent grain ETFs, such as Teucrium Wheat ETF (WEAT), surging, as illustrated in Figure 1. Additionally, the Indian government banned the export of non-basmati white rice

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This article was written by

Laurentian Research profile picture
Laurentian Research is a resource industry veteran with a Ph.D. in geoscience and decades of investment experience. He leads the investing group The Natural Resources Hub, with an aim of helping membes uncover undervalued opportunities in the energy and mining sectors with multi-bagger potential. He is also passionate about helping members find dividend growth opportunities from long-term growth industries. Members get weekly newsletters, proprietary in-depth analyses, trade alerts, model portfolios, private access to him, and a community of fellow investors to share investment ideas with. Learn more >> Members get weekly newsletters, proprietary in-depth analyses, trade alerts, model portfolios, private access to me, and a community of fellow investors to share investment ideas with. Learn more about The Natural Resources Hub today and start growing your wealth alongside Laurentian Research!

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AGRO over 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (17)

Just what the world needs, more sugar. Wonder how much rainforest was cleared for these farms?
Laurentian Research profile picture
@KevinFB Thank you for sharing your concern.

Zero rainforest has to be cleared to do business at AGRO. The land they own is in Argentina, Uruguay, and southern Brazil, hundreds of miles south of the Amazonian rainforest.

AGRO also produces renewable power from sugarcane waste. They convert sugar into ethanol to sell to make greenists happy, if sugar is in lower demand.

In short, this is the best stock a green-conscious person can hope for.
@Laurentian Research Thanks for the reply and your concern. I will look into its operation GPSs to verify.
All in all, a good write-up.
Laurentian Research profile picture
@KevinFB Thanks.
Would appreciate it if you could let us in this comment board know your findings.
Terra Brazilis profile picture
46% of revenues are from Sugar and Ethanol. I wish they would diversify further... I do hold this, Bunge and Nutrien as agriculture plays. Long.
Laurentian Research profile picture
@Terra Brazilis Thank you for sharing your take.

AGRO seems to be allocating capital preferentially to the dairy business, where I expect more growth going forward. As you're wishing, I too look forward to seeing more diversification in the next few years.
I love your picks!
Laurentian Research profile picture
@Pasha Keeling Thank you for the feedback.

At The Natural Resources Hub (TNRH: seekingalpha.com/... ), we focus on picking the long-term winners to help Members build and keep wealth.
Laurentian Research profile picture
My stock picking criteria are discussed here:

My recent article on another soft commodity play - Suzano - can be found here:
@Laurentian Research I bought that one on your recommendation, too. Thanks again!
Laurentian Research profile picture
@Pasha Keeling Hopefully, these agricultural ideas will play out in the next few years as the cycle further unfolds, although nothing is assured in investing.
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