In this article, we will be looking at the 10 best agriculture stocks to invest in. If you want to skip our detailed analysis of the agriculture sector, you can go directly to see the 5 Best Agriculture Stocks to Invest In.
When the pandemic broke out, a range of industries and sectors were horribly impacted and adversely affected, particularly in light of disruptions in global supply chains. The food and agriculture sector is no stranger to these developments and faced unprecedented volatility due to the pandemic. As people stopped going out to eat because of stay-at-home restrictions, demand for food materials from restaurants and the like plummeted, as consumer spending on food dropped by 47% in April last year, as compared to three months prior. At the same time, demand for foodstuffs and agricultural produce rose as more people began cooking at home, as witnessed by a 22% increase in consumer spending on homemade food last March.
Despite the increased volatility in the sector, sustainable agriculture and the agtech sector witnessed a rise in investor support and spending when the pandemic broke out. A TechAccel article claimed that in 2020, about $6.9 billion were poured into 385 companies in the sustainable agriculture and agtech sectors, a stunning increase in comparison to 2017 numbers of $3.4 billion in investment across 245 companies. This, coupled with the fact that demand for agricultural commodities has been rising after the initial setbacks during the starting months of the pandemic, has meant that the agriculture sector has started to become an attractive investment opportunity.
S&P Global has cited US Department of Agriculture statistics indicating that the demand for agricultural products may be rising because of China's grain purchases, with corn imports so far this year having reached an all-time high of 24 million mt. Along with the rising demand for agricultural products, we are also seeing rising prices with US corn, soybean, and wheat costs having risen by about 30-120% in the last one year period until the end of April. Despite this, demand for agricultural products remains robust, and the industry seems set to benefit in the long run, with major agriculture stocks like Caterpillar Inc. (NYSE: CAT), Bunge Limited (NYSE: BG), Archer-Daniels-Midland Company (NYSE: ADM) and The Scotts Miracle-Gro Company (NYSE: SMG) at the forefront. Hence, we have compiled a list of the best agriculture stocks to invest in.
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Without further ado, let's look at the 10 best agriculture stocks to invest in. The stocks added to our list below were selected on the basis of hedge fund sentiment, analysts' ratings, fundamentals, and growth potential based on core business strengths.
Best Agriculture Stocks To Invest In
10. Gladstone Land Corporation (NASDAQ: LAND)
Number of Hedge Fund Holders: 6
Gladstone Land Corporation (NASDAQ: LAND) is a real estate investment trust that operates in the acquisition and ownership of farmland and farm-related properties in American agricultural markets. The company leases its properties to third-party farmers. It ranks 10th on our list of the best agriculture stocks to invest in.
This March, B. Riley Securities raised its price target on Gladstone Land Corporation (NASDAQ: LAND) from $17.50 to $21 with a Buy rating on the shares. Analyst Craig Kucera commented that 2021 would be a year of exceptional growth for the company. Gladstone Land Corporation (NASDAQ: LAND) also acquired yet another 639 gross acres of farmland in California this June for about $24.5 million.
In the first quarter of 2021, Gladstone Land Corporation (NASDAQ: LAND) had an FFO of $0.18, beating estimates by $0.04. The company's revenue was $16.03 million, up 4.93% year over year and beating estimates by $0.80 million. Gladstone Land Corporation (NASDAQ: LAND) has a gross profit margin of 88.95% and has gained 63.89% in the past 6 months and 67.67% year to date.
As of the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in Gladstone Land Corporation (NASDAQ: LAND) worth roughly $7.1 million. This is compared to 11 hedge funds in the previous quarter with a stake value of about $17.29 million.
Like Caterpillar Inc. (NYSE: CAT), Bunge Limited (NYSE: BG), Archer-Daniels-Midland Company (NYSE: ADM), and The Scotts Miracle-Gro Company (NYSE: SMG), Gladstone Land Corporation (NASDAQ: LAND) is a good agriculture stock to buy.
9. Tyson Foods, Inc. (NYSE: TSN)
Number of Hedge Fund Holders: 28
Tyson Foods, Inc. (NYSE: TSN) is a global food company. It processes live-fed cattle and live market hogs, raises and processes chickens, and supplies poultry breeding stock among other services. The company ranks 9th on our list of the best agriculture stocks to invest in.
This May, Tyson Foods, Inc. (NYSE: TSN) was upgraded to Buy at Argus, with a $92 price target on the shares. Analyst John Staszak used the company's positive fiscal second-quarter earnings report to justify the upgrade, commenting that Tyson Foods, Inc.'s (NYSE: TSN) balance sheet and financial resources are highly beneficial for the company, and it will also gain from a rising protein demand. Staszak followed this up by raising his EPS view for the company to $6.20.
In the fiscal second quarter of 2021, Tyson Foods, Inc. (NYSE: TSN) had an EPS of $1.34, beating estimates by $0.21. The company's revenue was $11.30 billion, up 3.78% year over year and beating estimates by $110.31 million. Tyson Foods, Inc. (NYSE: TSN) has a gross profit margin of 14.06% and has gained 13.2% in the past 6 months and 14.25% year to date.
As of the end of the first quarter of 2021, 28 hedge funds out of the 866 tracked by Insider Monkey held stakes in Tyson Foods, Inc. (NYSE: TSN) worth roughly $761 million. This is compared to 38 hedge funds in the previous quarter with a stake value of about $867 million.
Like Caterpillar Inc. (NYSE: CAT), Bunge Limited (NYSE: BG), Archer-Daniels-Midland Company (NYSE: ADM), and The Scotts Miracle-Gro Company (NYSE: SMG), Tyson Foods, Inc. (NYSE: TSN) is a good agriculture stock to buy.
8. FMC Corporation (NYSE: FMC)
Number of Hedge Fund Holders: 32
FMC Corporation (NYSE: FMC) is an agricultural sciences company providing crop protection, plant health, precision agriculture, and professional pest and turf management products. It ranks 8th on our list of the best agriculture stocks to invest in.
This February, Monness Crespi upgraded FMC Corporation (NYSE: FMC) from Neutral to Buy with a $126 price target. The company has also provided Q2 guidance for its EPS and revenue this May, seeing an EPS of $1.68-$1.88 versus estimates of $1.81, and revenue of $1.19-$1.26 billion.
In the first quarter of 2021, FMC Corporation (NYSE: FMC) had an EPS of $1.53, beating estimates by $0.02. The company's revenue was $1.20 billion, also beating estimates by $21.06 million. FMC Corporation (NYSE: FMC) has a gross profit margin of 43.66% and has gained 7.06% in the past year.
As of the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey held stakes in FMC Corporation (NYSE: FMC) worth roughly $499 million. This is compared to 45 hedge funds in the previous quarter with a stake value of about $571 million.
Like Caterpillar Inc. (NYSE: CAT), Bunge Limited (NYSE: BG), Archer-Daniels-Midland Company (NYSE: ADM), and The Scotts Miracle-Gro Company (NYSE: SMG), FMC Corporation (NYSE: FMC) is a good agriculture stock to buy.
7. Nutrien Ltd. (NYSE: NTR)
Number of Hedge Fund Holders: 33
Nutrien Ltd. (NYSE: NTR) is a provider of crop inputs, services, and solutions. The company provides consumers with potash, nitrogen, phosphate, and sulfate products, alongside financial solutions, and ranks 7th on our list of the best agriculture stocks to invest in.
This July, RBC Capital raised its price target on Nutrien Ltd. (NYSE: NTR) from $63 to $69, keeping an Outperform rating on the shares. Analyst Andrew Wong commented that Nutrien Ltd. (NYSE: NTR) is set to benefit from a robust ag environment and rising prices of fertilizers, which will foreseeably raise the company's estimates and cash flow.
In the first quarter of 2021, Nutrien Ltd. (NYSE: NTR) had an EPS of $.029, beating estimates by $0.20. The company's revenue was $4.45 billion, up 11.90% year over year and surpassing the previous quarter's $3.85 billion revenue. Nutrien Ltd. (NYSE: NTR) has a gross profit margin of 26.86% and has gained 15.35% in the past 6 months and 24.22% year to date.
As of the end of the first quarter of 2021, 33 hedge funds out of the 866 tracked by Insider Monkey held stakes in Nutrien Ltd. (NYSE: NTR) worth roughly $895 million. This is compared to 25 hedge funds in the previous quarter with a stake value of about $754 million.
Like Caterpillar Inc. (NYSE: CAT), Bunge Limited (NYSE: BG), Archer-Daniels-Midland Company (NYSE: ADM), and The Scotts Miracle-Gro Company (NYSE: SMG), Nutrien Ltd. (NYSE: NTR) is a good agriculture stock to buy.
Miller/Howard Investments, an investment management firm, mentioned Nutrien Ltd. (NYSE: NTR) in its first-quarter 2021 investor letter. Here's what they said:
“For the most part, performance of the stocks within the Income-Equity Strategies was skewed towards the high-performing market sectors with two exceptions – our consumer discretionary and technology stocks both did better than their broad market peers… We bought Nutrien (NTR), a producer of fertilizer, which we believe should benefit from increasing crop prices.”
6. The Scotts Miracle-Gro Company (NYSE: SMG)
Number of Hedge Fund Holders: 34
The Scotts Miracle-Gro Company (NYSE: SMG) is a manufacturer and seller of consumer lawn and garden products in the US and internationally. It offers fertilizers, grass seed products, pest and disease control products, and other related items. The company ranks 6th on our list of the best agriculture stocks to invest in.
This June, UBS initiated coverage of The Scotts Miracle-Gro Company (NYSE: SMG) with a Buy rating and a $225 price target. Raymond James has also kept its Strong Buy rating on the shares as of this June.
In the fiscal second quarter of 2021, The Scotts Miracle-Gro Company (NYSE: SMG) had an EPS of $5.64, beating estimates by $0.07. The company's revenue was $1.83 billion, up 32.25% year over year and beating estimates by $95.86 million. The Scotts Miracle-Gro Company (NYSE: SMG) has a gross profit margin of 32.75% and has gained 31.39% in the past year.
As of the end of the first quarter of 2021, 34 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Scotts Miracle-Gro Company (NYSE: SMG) worth roughly $445 million. This is compared to 29 hedge funds in the previous quarter with a stake value of about $454 million.
Roubaix Capital LLC, an investment management firm, mentioned The Scotts Miracle-Gro Company (NYSE: SMG) in its fourth-quarter 2020 investor letter. Here's what they said:
“Companies including Scotts Miracle-Gro (SMG) have seen their sales accelerate to unsustainable levels that are not consistent with their mature end markets. We expect sales to slow and eventually give back some of the one-time gains caused by the unusual circumstances of 2020. Further, we question the sustainability of current peak valuations in the face of likely peak sales. We believe companies with such characteristics could face a combination of negative earnings revisions and lower valuations as the demand reality sets in this year. We also anticipate that companies that have benefited from consumers being homebound will see very challenging comparisons in 2021. No doubt, spending on home improvement and furnishing grew at unsustainable rates in 2020.”
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Disclosure: None. 10 Best Agriculture Stocks to Invest In is originally published on Insider Monkey.
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