Agro Sector Ideas

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>>> Deere & Company (NYSE:DE)

https://www.insidermonkey.com/blog/13-best-farmland-and-agriculture-stocks-to-invest-in-according-to-hedge-funds-1401620/

Number of Hedge Fund Holders: 41

Deere & Company (NYSE:DE), also known as John Deere, is a prominent American manufacturer specializing in agricultural, turf, construction, and forestry equipment. The company is well-known for its innovative technology-driven products, such as the Autonomous 8R Tractor, See & Spray systems, and E-Power Backhoe. Deere & Company (NYSE:DE) ranks among the best agriculture stocks to buy.

In the fourth quarter of fiscal 2024, which ended on October 27, 2024, Deere & Company (NYSE:DE) reported a net income of $1.24 billion, or $4.55 per share. This represents a significant decline from the $2.36 billion earned in Q4 2023. For the full fiscal year, net income dropped to $7.1 billion, down from $10.16 billion in fiscal 2023. Despite these declines, Deere & Company’s (NYSE:DE) margins in 2024 remained strong, exceeding 18%, reflecting improvements made since adopting its smart industrial operating model in 2020.

Deere & Company (NYSE:DE) faced challenges this year, with worldwide net sales and revenues falling by 28% in Q4 to $11.14 billion, and a 16% decrease for the full year at $51.71 billion. These declines were primarily due to reduced shipment volumes across various segments, including a 38% drop in Production & Precision Agriculture sales. However, Deere & Company (NYSE:DE) has proactively adjusted its operations to better align with current market conditions.

Despite these setbacks, the company continues to invest heavily in research and development, maintaining record levels of spending to drive innovation and product development. In 2024, Deere & Company (NYSE:DE) introduced a variety of new and exciting solutions, including connected machines, engaged acres, and Autonomous Acres. The company’s See & Spray technology has successfully covered over one million acres this year, significantly reducing herbicide use by an average of nearly 60%.

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>>> Tractor Supply Company (NASDAQ:TSCO)

https://www.insidermonkey.com/blog/13-best-farmland-and-agriculture-stocks-to-invest-in-according-to-hedge-funds-1401620/

Number of Hedge Fund Holders: 29

Tractor Supply Company (NASDAQ:TSCO) is an American farm supplies company and the largest rural lifestyle retailer in the US. The company offers agriculture, lawn and garden maintenance, home improvement, livestock, equine, and pet care equipment and supplies. Tractor Supply Company (NASDAQ:TSCO) ranks among the best farmland and agriculture stocks to invest in according to hedge funds.

In the third-quarter financial results for 2024, which ended on September 28, Tractor Supply Company (NASDAQ:TSCO) reported net sales of $3.47 billion, reflecting a modest increase of 1.6%. This growth was primarily driven by the opening of 16 new stores during the quarter. Additionally, gross profit rose by 3.2% to $1.29 billion, with gross margins improving to 37.2% due to lower transportation costs and effective product cost management.

Despite a challenging retail environment, Tractor Supply Company (NASDAQ:TSCO) is advancing its Life Out Here strategy and focusing on enhancing customer loyalty and expanding market share. The company has invested significantly in its store layouts, with nearly 50% of its locations now featuring the Project Fusion design and over 550 garden centers. These investments are expected to yield long-term growth and improve customer engagement.

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>>> Ingredion Incorporated (NYSE:INGR)

https://www.insidermonkey.com/blog/13-best-farmland-and-agriculture-stocks-to-invest-in-according-to-hedge-funds-1401620/

Number of Hedge Fund Holders: 26

Ingredion Incorporated (NYSE:INGR) is a leading global ingredient solutions provider and a major player in the farmland and agriculture sector. The company turns grains, fruits, vegetables, and other plant-based materials into valuable products and solutions for the food, beverage, animal nutrition, brewing, and industrial markets. Ingredion Incorporated (NYSE:INGR) has shown strong financial performance and strategic growth initiatives, making it an attractive option for investors.

In the third quarter of 2024, the company reported impressive results with a 26% increase in reported operating income and a 29% increase in adjusted operating income. The adjusted earnings per share (EPS) rose to $3.05, marking a 31% increase from the previous year. This growth was driven by effective contract management and operational excellence across all segments, which experienced double-digit operating income growth.

Despite facing challenges such as input and wage cost inflation, Ingredion Incorporated (NYSE:INGR) successfully adjusted pricing through multiyear contracts with customers, which helped recover margins. The company also achieved structural savings through its cost-to-compete program, which aims to deliver $50 million of run-rate savings by the end of 2025.

Additionally, Ingredion Incorporated (NYSE:INGR) ramped up production at its facilities in Cali, Colombia, and Mexico City after optimizing operations with minimal capital expenditures. Looking ahead, the company is committed to investing in capacity expansion and network optimization projects. These initiatives are designed to support the company’s long-term growth strategy while maintaining a strong focus on cost management. This focus on enhancing production efficiency positions Ingredion Incorporated (NYSE:INGR) well for future growth.

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>>> 13 Best Farmland and Agriculture Stocks To Invest In According to Hedge Funds


Insider Monkey

December 3, 2024


https://www.insidermonkey.com/blog/13-best-farmland-and-agriculture-stocks-to-invest-in-according-to-hedge-funds-1401620/


In this article, we will look at the 13 best farmland and agriculture stocks to invest in according to hedge funds.

Revolutionizing Agriculture: Technology in Modern Farming

The farmland and agriculture sector is crucial for global food security and economic stability. As the world population continues to grow, the demand for food increases, necessitating innovative practices in agriculture and farming. Recent trends indicate a significant shift towards technology-driven agriculture, which aims to enhance productivity while promoting sustainability.

In the first quarter of 2024, McKinsey surveyed around 4,400 farmers across Europe, India, Latin America, and North America to understand the factors influencing their profitability and technology adoption. The firm conducted a similar survey in 2022. The findings indicate that while farmers are increasingly adopting technology, the pace remains slow, with a three-percentage-point rise since 2022 in those using or willing to use at least one new digital tool to improve operations.

North American farmers lead in technology adoption. In the US, 61% of farmers are using or willing to adopt digital agronomy. Additionally, 51% are using or willing to adopt precision agriculture hardware, and 38% are adopting remote-sensing technologies. Latin America showed the most significant growth in technology adoption, with a remarkable ten-percentage-point increase from 2022 to 2024. Farmers around the world are more inclined to adopt new technologies that directly improve operations. According to the data, digital agronomy and precision agriculture hardware are the most popular technologies around the world.

The survey highlights that in the US, larger farms are 45% more likely to adopt agricultural technology compared to smaller farms. This trend can be attributed to the greater scale needed for a favorable return on investment (ROI) in agtech. Despite the challenges posed by rising input costs and extreme weather conditions, farmers are looking towards sustainable practices and innovative technologies to enhance their productivity and profitability. Organizations that provide technology and services have a unique opportunity to cater to farmers’ diverse needs across different regions.

With this background in mind, let’s take a look at the 13 best farmland and agriculture stocks to invest in according to hedge funds.

Methodology

To compile our list of the 13 best farmland and agriculture stocks to invest in according to hedge funds, we used the Finviz and Yahoo stock screeners to find the largest farmland and agriculture companies. We also reviewed our own rankings and consulted various online resources.

From an initial pool of more than 30 farmland and agriculture stocks, we focused on the top 13 stocks most favored by institutional investors. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s Q3 2024 database of 900 elite hedge funds. The 13 best farmland and agriculture stocks to invest in are ranked in ascending order based on the number of hedge funds holding stakes in them, as of Q3 2024.

Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

13. Ingredion Incorporated (NYSE:INGR)

Number of Hedge Fund Holders: 26

Ingredion Incorporated (NYSE:INGR) is a leading global ingredient solutions provider and a major player in the farmland and agriculture sector. The company turns grains, fruits, vegetables, and other plant-based materials into valuable products and solutions for the food, beverage, animal nutrition, brewing, and industrial markets. Ingredion Incorporated (NYSE:INGR) has shown strong financial performance and strategic growth initiatives, making it an attractive option for investors.

In the third quarter of 2024, the company reported impressive results with a 26% increase in reported operating income and a 29% increase in adjusted operating income. The adjusted earnings per share (EPS) rose to $3.05, marking a 31% increase from the previous year. This growth was driven by effective contract management and operational excellence across all segments, which experienced double-digit operating income growth.

Despite facing challenges such as input and wage cost inflation, Ingredion Incorporated (NYSE:INGR) successfully adjusted pricing through multiyear contracts with customers, which helped recover margins. The company also achieved structural savings through its cost-to-compete program, which aims to deliver $50 million of run-rate savings by the end of 2025.

Additionally, Ingredion Incorporated (NYSE:INGR) ramped up production at its facilities in Cali, Colombia, and Mexico City after optimizing operations with minimal capital expenditures. Looking ahead, the company is committed to investing in capacity expansion and network optimization projects. These initiatives are designed to support the company’s long-term growth strategy while maintaining a strong focus on cost management. This focus on enhancing production efficiency positions Ingredion Incorporated (NYSE:INGR) well for future growth.

12. The Scotts Miracle-Gro Company (NYSE:SMG)

Number of Hedge Fund Holders: 28

The Scotts Miracle-Gro Company (NYSE:SMG) is a multinational manufacturer of branded consumer lawn and garden products, including fertilizers, plant foods, and pest control solutions. The Scotts Miracle-Gro Company (NYSE:SMG) ranks among the best agriculture stocks to invest in according to hedge funds.

The Scotts Miracle-Gro Company (NYSE:SMG) has faced challenges in recent years, including high debt and an unsustainable cost structure due to fluctuating demand post-pandemic. However, the company took significant steps to mitigate these issues by cutting over $400 million in operating expenses. The company also restructured its Hawthorne Gardening Company to make it smaller and more profitable. These measures helped The Scotts Miracle-Gro Company (NYSE:SMG) maintain its dividend and avoid issuing new shares.

Fiscal 2024 marked a significant recovery for the company as it shifted its focus to future growth. In its fiscal fourth quarter of 2024, The Scotts Miracle-Gro Company (NYSE:SMG) reported total net sales of $414.7 million, an 11% increase compared to the previous year. The US Consumer segment saw remarkable growth, with sales rising by 54% to $309.7 million, primarily due to improved shipment timing.

The Scotts Miracle-Gro Company (NYSE:SMG) plans to invest at least $200 million annually in advertising and marketing to achieve consistent growth of around 3% each year. The company aims to improve gross margins into the mid-30% range and reduce its debt leverage to approximately 3x by the end of fiscal 2027.

In fiscal year 2025, The Scotts Miracle-Gro Company (NYSE:SMG) intends to expand its Miracle-Gro Organic line and introduce new products, reinforcing its commitment to sustainability. The company also aims to introduce a new O.M. Scotts & Son natural lawn fertilizer and grass seed, featuring eco-friendly packaging. With a clear strategy focused on innovation and efficiency, The Scotts Miracle-Gro Company (NYSE:SMG) is well-positioned for future growth.

11. Vital Farms Inc. (NASDAQ:VITL)

Number of Hedge Fund Holders: 28

Vital Farms Inc. (NASDAQ:VITL) is a food and agriculture company that specializes in producing ethically sourced eggs and dairy products. The company partners with family farms to offer a variety of products, including shell eggs, butter, hard-boiled eggs, and liquid whole eggs, which are available in over 24,000 stores across the United States.

In its third-quarter financial results for 2024, Vital Farms Inc. (NASDAQ:VITL) reported a remarkable 31.3% increase in net revenue, reaching $145 million compared to $110.4 million in the same quarter last year. This growth was primarily driven by higher sales volumes, reflecting strong consumer demand for its products. Vital Farms Inc. (NASDAQ:VITL) has managed to achieve a 31% increase in sales over the first nine months of 2024, showcasing its robust performance.

Looking forward, Vital Farms Inc. (NASDAQ:VITL) is focused on expanding its operations to support its ambitious goal of reaching $1 billion in net revenue by 2027. In June 2024, the company announced plans to open a new Egg Central Station (ECS) facility in Seymour, Indiana. This facility will enhance their egg washing and packing capabilities and build on the success of their existing operations.

Over the past three years, Vital Farms Inc. (NASDAQ:VITL) has demonstrated impressive growth, with a compound annual growth rate (CAGR) of 34% for revenue and an astonishing 111% CAGR for net income. Additionally, analysts are optimistic about the company’s future, holding a consensus buy rating on the stock and setting a one-year price target of $41.00, indicating a potential upside of 21% from current levels. With strong financial results and ongoing investments in capacity expansion, Vital Farms Inc. (NASDAQ:VITL) is well-positioned for future success, making it an attractive option for investors seeking opportunities in the farmland and agriculture sector.

10. Tractor Supply Company (NASDAQ:TSCO)

Number of Hedge Fund Holders: 29

Tractor Supply Company (NASDAQ:TSCO) is an American farm supplies company and the largest rural lifestyle retailer in the US. The company offers agriculture, lawn and garden maintenance, home improvement, livestock, equine, and pet care equipment and supplies. Tractor Supply Company (NASDAQ:TSCO) ranks among the best farmland and agriculture stocks to invest in according to hedge funds.

In the third-quarter financial results for 2024, which ended on September 28, Tractor Supply Company (NASDAQ:TSCO) reported net sales of $3.47 billion, reflecting a modest increase of 1.6%. This growth was primarily driven by the opening of 16 new stores during the quarter. Additionally, gross profit rose by 3.2% to $1.29 billion, with gross margins improving to 37.2% due to lower transportation costs and effective product cost management.

Despite a challenging retail environment, Tractor Supply Company (NASDAQ:TSCO) is advancing its Life Out Here strategy and focusing on enhancing customer loyalty and expanding market share. The company has invested significantly in its store layouts, with nearly 50% of its locations now featuring the Project Fusion design and over 550 garden centers. These investments are expected to yield long-term growth and improve customer engagement.

9. Corteva Inc. (NYSE:CTVA)

Number of Hedge Fund Holders: 33

Corteva Inc. (NYSE:CTVA) is a pure-play agriculture company that provides farmers around the world with a comprehensive range of seed and crop protection products and services. The company is focused on helping farmers maximize productivity to enhance yield and profitability. With a strong portfolio of well-known brands and an innovative product pipeline, Corteva Inc. (NYSE:CTVA) is well-positioned for growth in the agriculture sector.

In its third-quarter results for 2024, the company reported a 10% decrease in net sales compared to the previous year. However, Corteva Inc. (NYSE:CTVA) saw a 3% increase in volume, driven by an 11% rise in Crop Protection volume, particularly in Latin America and North America on demand for new products and spinosyns. This growth was partly offset by lower seed volumes due to reduced corn planting in Argentina. Despite facing an operating loss in Q3, management remains optimistic, expecting to achieve over $400 million in savings from its controllables this year.

Corteva Inc. (NYSE:CTVA) is focusing on differentiated and new technologies that warrant premium pricing. In 2025, the company plans to introduce several hundred new hybrids and varieties globally, which will help farmers improve yields and productivity. Additionally, on a year-to-date basis, Corteva Inc. (NYSE:CTVA) has received over 150 crop protection registration approvals across nearly 50 countries, indicating robust demand for its innovative solutions.

Corteva Inc. (NYSE:CTVA) announced a significant breakthrough on November 18, 2024, with the introduction of a proprietary non-GMO hybrid wheat technology. This innovation could increase yield potential by 10% while using the same amount of land resources and offers improved drought resistance, yielding up to 20% more in water-stressed conditions. Such advancements are crucial for global food security and position Corteva Inc. (NYSE:CTVA) as a leader in addressing agricultural challenges. These strategic initiatives and advancements make CTVA a compelling investment opportunity in the agriculture sector, as it continues to drive innovation and support farmers’ needs effectively. Corteva Inc. (NYSE:CTVA) ranks among the best agriculture stocks to buy.

8. Bunge Global SA (NYSE:BG)

Number of Hedge Fund Holders: 33

Bunge Global SA (NYSE:BG) is a prominent player in the agribusiness sector, connecting farmers with consumers by providing essential food, feed, and fuel. The company specializes in oilseed processing and supplies specialty plant-based oils and fats used in various products, from animal feed to cooking oils.

On October 5, 2023, Bunge Global SA (NYSE:BG) announced that the company’s shareholders approved its merger with Viterra. This acquisition will create a more robust global agribusiness entity, enhancing Bunge’s (NYSE:BG) operational capabilities and expanding its market reach. The integration process is progressing well, with expectations to finalize the merger by late 2024 or early 2025. Viterra Limited is a major marketer and handler of grains and oilseeds with a strategic network of agricultural storage, processing and transport assets. This combination will diversify Bunge’s (NYSE:BG) operations across different geographies and crops.

Financially, Bunge Global SA (NYSE:BG) reported a diluted earnings per share (EPS) of $1.56 for Q3 2024, down from $2.47 the previous year. While Agribusiness and Refined and Specialty Oils showed strong performance, the overall results were impacted by a difficult global margin situation. The company remains focused on its core operations, as evidenced by its recent sale of a 50% stake in BP Bunge Bioenergia on October 1, 2024. This decision allows Bunge Global SA (NYSE:BG) to concentrate on its primary business areas while offloading non-core ventures.

Bunge Global SA (NYSE:BG) is also investing in new facilities, such as a palm and specialty oils facility in Avondale, Louisiana, which will enhance its service capabilities in North America. These strategic initiatives position Bunge as a compelling investment opportunity in the farmland and agriculture sector, particularly as it navigates current market challenges and prepares for future growth.

7. Nutrien Ltd. (NYSE:NTR)

Number of Hedge Fund Holders: 33

Nutrien Ltd. (NYSE:NTR) is a prominent Canadian agriculture and fertilizer company, recognized as one of the world’s largest producers of potash and nitrogen fertilizers. The company plays a critical role in the agricultural sector by providing essential crop inputs and services to farmers globally.

In June 2024, during its Investor Day, Nutrien Ltd. (NYSE:NTR) set ambitious performance targets for 2026, focusing on improving earnings and cash flow. The company has made good progress and now aims to achieve $200 million in operational efficiencies by 2025, one year ahead of schedule. These efficiencies will be realized through cost reductions across both retail and corporate operations.

In the first nine months of 2024, Nutrien Ltd. (NYSE:NTR) reported an adjusted EBITDA of $4.3 billion, driven by higher retail earnings, increased fertilizer volumes, and lower operating costs. The company has already boosted sales volumes by 1.3 million tons this year through the first 3 quarters of 2024, with plans to increase potash and nitrogen production by an additional 2 to 3 million tons compared to 2023 levels.

Nutrien Ltd.’s (NYSE:NTR) strong health is further demonstrated by its commitment to returning value to shareholders. As of November 5, 2024, the company repurchased 1.5 million shares for approximately $75 million in the latter half of the year. This move reflects Nutrien’s dedication to enhancing shareholder value. The company’s strategic focus on operational efficiency and growth positions it well for future success.

6. The Mosaic Company (NYSE:MOS)

Number of Hedge Fund Holders: 34

The Mosaic Company (NYSE:MOS) is a leading global producer of concentrated phosphate and potash fertilizers, playing a vital role in the agriculture industry. The company extracts, produces, and supplies millions of tonnes of high-quality fertilizers each year, significantly supporting farmland and agricultural productivity.

In the third quarter of 2024, The Mosaic Company (NYSE:MOS) reported revenues of $2.8 billion, a 21% decrease from the same quarter last year, primarily due to lower selling prices. However, the company achieved a net income of $122 million, a significant recovery from a net loss of $4 million in Q3 2023. This turnaround demonstrates The Mosaic Company’s (NYSE:MOS) resilience and ability to address challenges such as weather-related disruptions.

The company is strategically focusing on capital allocation to enhance its growth potential. The company has completed several projects that require minimal capital investment but promise high returns. Notable achievements include the completion of an 800,000-tonne Riverview MicroEssentials capacity conversion and the 500,000-tonne Esterhazy potash compaction project in Q2 2024.

Looking ahead, The Mosaic Company (NYSE:MOS) plans to enhance its milling capacity by 400,000 tonnes with the Esterhazy Hydrofloat project, expected to be completed by mid-2025. Additionally, a new 1 million-tonne blending facility in Palmeirante, Brazil is expected to be finished by the third quarter of 2025.

To improve efficiency, The Mosaic Company (NYSE:MOS) is working on cost reduction initiatives aimed at achieving a $150 million run rate by the end of 2025. The company also expects to lower its 2024 capital expenditures by $200 million compared to 2023 levels. Additionally, in the first nine months of 2024, The Mosaic Company (NYSE:MOS) returned $415 million to shareholders.

With its strong market position, commitment to operational improvements, and focus on shareholder returns, The Mosaic Company (NYSE:MOS) represents an attractive investment opportunity.

5. Archer-Daniels-Midland Company (NYSE:ADM)

Number of Hedge Fund Holders: 34

Archer-Daniels-Midland Company (NYSE:ADM) is an American multinational corporation specializing in food processing and the trading of agricultural commodities. As one of the largest agricultural processing companies globally, the company plays a vital role in connecting farmers with markets, producing ingredients for food, beverages, supplements, and animal feed.

In the third quarter of 2024, which ended on September 30, the company reported earnings before income taxes of $108 million, a decline of 90% compared to the same quarter last year. This drop was primarily due to falling prices for key crops like corn and soybeans, which have hit near four-year lows. Additionally, Archer-Daniels-Midland Company (NYSE:ADM) faced a non-cash impairment charge of $461 million related to its investment in Wilmar.

Despite these challenges, Archer-Daniels-Midland Company (NYSE:ADM) remains a strong player in the market. The company declared a cash dividend of 50 cents per share on November 8, 2024, marking its 372nd consecutive quarterly payment. This long-standing commitment to returning value to shareholders highlights Archer-Daniels-Midland Company’s (NYSE:ADM) stability and reliability.

To address current market conditions, the company is focusing on improving productivity and operational efficiency. In the second quarter of 2024, Archer-Daniels-Midland Company (NYSE:ADM) initiated projects aimed at achieving $500 million in cost reductions over the next two years. These efforts are expected to significantly improve savings by the end of 2024.

The combination of a strong dividend history, ongoing cost-saving initiatives, and a solid market position makes Archer-Daniels-Midland Company (NYSE:ADM) an attractive investment opportunity in the farmland and agriculture sector.

4. Tyson Foods Inc. (NYSE:TSN)

Number of Hedge Fund Holders: 37

Tyson Foods Inc. (NYSE:TSN) is an American multinational food corporation that ranks among the best farmland and agriculture stocks to invest in. The company works closely with independent livestock and poultry farmers and owns well-known brands such as Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, and State Fair.

In the fourth quarter of 2024, Tyson Foods Inc. (NYSE:TSN) reported sales of $13.56 billion, marking a 1.6% increase from the previous year. The company’s GAAP operating income surged to $525 million, a remarkable turnaround from a loss of $463 million in the same quarter last year. Adjusted operating income also rose significantly to $512 million, reflecting a 117% increase compared to the prior year.

Tyson Foods Inc. (NYSE:TSN) is focused on enhancing its operational excellence by modernizing its processes and leveraging technology. The company plans to invest in digital capabilities, using big data and artificial intelligence (AI) to improve decision-making and customer engagement. This strategic focus on innovation helps Tyson Foods Inc. (NYSE:TSN) expand its market reach and better serve consumers.

Furthermore, Tyson Foods Inc. (NYSE:TSN) has maintained strong liquidity, with approximately $4 billion available as of September 28, 2024. This financial strength allows the company to invest in growth opportunities.

With its robust financial performance, commitment to innovation, and strong market position, Tyson Foods Inc. (NYSE:TSN) stands out as an attractive investment opportunity. According to Insider Monkey’s database, TSN has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 37 in Q3 2024, up from 27 in the previous quarter.

3. CF Industries Holdings Inc. (NYSE:CF)

Number of Hedge Fund Holders: 39

CF Industries Holdings Inc. (NYSE:CF) is an American producer of hydrogen and nitrogen products, primarily used in clean energy, emissions abatement, and agricultural fertilizers. The company manufactures and distributes essential fertilizers like ammonia, urea, and ammonium nitrate, which are crucial for enhancing crop yields.

For the first nine months of 2024, CF Industries Holdings Inc. (NYSE:CF) reported net earnings of $890 million or $4.86 per diluted share, down from $1.25 billion or $6.42 per diluted share in the same period of 2023. Despite this decline, the company produced approximately 7.2 million tons of gross ammonia, slightly up from 7.0 million tons in the previous year. This production increase reflects CF Industries Holdings Inc.’s (NYSE:CF) ability to maintain strong operational performance amid fluctuating market conditions.

Net sales for the first nine months of 2024 were $4.41 billion, a decrease from $5.06 billion in the same period of 2023. This drop was mainly due to lower average selling prices. However, sales volumes remained stable due to higher ammonia sales from a recently acquired Waggaman ammonia production facility.

The company is also investing in strategic initiatives aimed at sustainability and growth. Notably, CF Industries Holdings Inc. (NYSE:CF) is advancing projects related to low-carbon ammonia technologies and carbon capture at its facilities in Donaldsonville and Yazoo City. These initiatives not only align with global sustainability goals but also position CF Industries Holdings Inc. (NYSE:CF) as a leader in environmentally friendly solutions. Additionally, CF Industries Holdings Inc. (NYSE:CF) has been proactive in returning value to shareholders, repurchasing 14.4 million shares for $1.13 billion during the first nine months of 2024.

With its robust production capabilities, commitment to innovation, and focus on sustainability, CF Industries Holdings Inc. (NYSE:CF) presents a solid investment opportunity for those looking to invest in farmland and agriculture stocks.

2. Deere & Company (NYSE:DE)

Number of Hedge Fund Holders: 41

Deere & Company (NYSE:DE), also known as John Deere, is a prominent American manufacturer specializing in agricultural, turf, construction, and forestry equipment. The company is well-known for its innovative technology-driven products, such as the Autonomous 8R Tractor, See & Spray systems, and E-Power Backhoe. Deere & Company (NYSE:DE) ranks among the best agriculture stocks to buy.

In the fourth quarter of fiscal 2024, which ended on October 27, 2024, Deere & Company (NYSE:DE) reported a net income of $1.24 billion, or $4.55 per share. This represents a significant decline from the $2.36 billion earned in Q4 2023. For the full fiscal year, net income dropped to $7.1 billion, down from $10.16 billion in fiscal 2023. Despite these declines, Deere & Company’s (NYSE:DE) margins in 2024 remained strong, exceeding 18%, reflecting improvements made since adopting its smart industrial operating model in 2020.

Deere & Company (NYSE:DE) faced challenges this year, with worldwide net sales and revenues falling by 28% in Q4 to $11.14 billion, and a 16% decrease for the full year at $51.71 billion. These declines were primarily due to reduced shipment volumes across various segments, including a 38% drop in Production & Precision Agriculture sales. However, Deere & Company (NYSE:DE) has proactively adjusted its operations to better align with current market conditions.

Despite these setbacks, the company continues to invest heavily in research and development, maintaining record levels of spending to drive innovation and product development. In 2024, Deere & Company (NYSE:DE) introduced a variety of new and exciting solutions, including connected machines, engaged acres, and Autonomous Acres. The company’s See & Spray technology has successfully covered over one million acres this year, significantly reducing herbicide use by an average of nearly 60%.

1. FMC Corporation (NYSE:FMC)

Number of Hedge Fund Holders: 41

FMC Corporation (NYSE:FMC) is a leading American agricultural sciences company that focuses on developing and marketing essential products like herbicides, insecticides, and fungicides. FMC ranks among the best agriculture stocks to buy according to hedge funds.

In Q3 2024, FMC Corporation (NYSE:FMC) reported revenues of $1.07 billion, marking a 9% increase compared to Q3 2024. This growth was driven by higher sales volumes and effective cost management strategies, which helped the company turn around from a net loss of $4 million in Q3 2023 to a net income of $66 million in Q3 2024. The introduction of innovative products, such as a new fluindapyr-based fungicide in Brazil, Argentina, and Paraguay, has significantly contributed to this revenue boost.

The company’s commitment to improving its financial health is evident in its aggressive cost-saving measures. FMC Corporation (NYSE:FMC) has raised its restructuring savings target for 2024 to between $125 million and $150 million, with an aim to achieve over $225 million in gross savings by 2025. This includes realigning manufacturing operations and reducing costs through attrition.

Additionally, FMC Corporation (NYSE:FMC) announced that it had completed the sale of its Global Specialty Solutions business on November 1, 2024, allowing it to concentrate more on its core crop protection business. This strategic move is expected to enhance operational efficiency and focus resources on high-potential areas. With robust revenue growth, improved profitability, and a clear focus on core agricultural products, FMC Corporation (NYSE:FMC) presents an attractive investment opportunity in the farmland and agriculture sector.

Overall, FMC ranks first among the 13 best farmland and agriculture stocks to invest in according to hedge funds. While we acknowledge the potential of farmland and agriculture companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FMC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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>>> Deere Shares Surge on Optimism Farm Gloom Will Lift in 2025


Bloomberg

by Michael Hirtzer

November 21, 2024


https://finance.yahoo.com/news/deere-sees-lower-2025-profit-124230338.html


(Bloomberg) -- Shares of Deere & Co. jumped to the highest level in more than a year as investors in the biggest farm machinery maker looked past a disappointing profit outlook amid speculation that the slump in agriculture is poised to turn.

The maker of iconic green and yellow tractors reported fourth-quarter earnings that topped expectations, but said net income for fiscal 2025 will be between $5 billion and $5.5 billion. That’s below the $5.83 billion average of analyst estimates compiled by Bloomberg.

The full-year guidance “is ugly, but expectations were already very low,” according to Vital Knowledge analyst Adam Crisafulli. In one positive sign, North American inventories declined, showing that “destocking is taking hold,” Baird analysts including Mircea Dobre said in a note.

The company’s shares rose as much as 8.2%, the most intraday since February 2023.

The sector has been suffering as sales have dropped from peak levels of 2022, when Russia’s invasion of Ukraine sent crop prices soaring and gave farmers more to spend on gear. Rivals CNH Industrial NV and AGCO Corp. earlier this month reduced their sales forecasts as results missed estimates. Companies have been cutting production to deal with the high dealer inventories.

Traders and executives have been looking for signs of an end to the industry downturn. Farmer sentiment bounced in October on optimism that economic conditions will improve, according to the Purdue University and CME Group’s Ag Economy Barometer. CNH, whose brands include red Case IH and blue New Holland tractors, earlier this month said 2025 could be the bottom of the cycle.

Excessive amounts of used machinery continue to drag on demand for new equipment. Cory Reed, president of worldwide agriculture and turf at Deere, told investors on an earnings call that the situation is improving, though “it’s too early to call an inflection point on used equipment.”

Deere also said it was too soon to know any impacts from President-elect Donald Trump’s policies. He has threatened tariffs on any products Deere makes in Mexico and sells in the US — a potential wild card even as farmer sentiment recently has been rising.

Chief Executive Officer John May said on the call that more than 75% of what Deere sells in the US is assembled domestically. “So we feel really positioned well,” he said.

Deere has been shifting into high-tech machines such as autonomous plows and a sprayer that automatically detects weeds. However, farmers who recently harvested crops with grain and oilseed prices trading near four-year lows have been putting off machinery purchases after many upgraded in 2022.

US sales of agriculture tractors continued their decline in October, falling about 14% from the previous year, the Association of Equipment Manufacturers said in a report.

Deere expects sales in its largest production and precision agriculture segment to be down about 15% in fiscal 2025, while prices are seen up 1%.

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>>> Gladstone Land Corp (NASDAQ:LAND) is a McLean, VA-based specialty REIT, founded in 1997. It owns farmland and related properties in major agricultural U.S. markets and leases or lease-backs its properties to farmers. Gladstone presently owns 168 farms with 112,000 acres across 15 states. Gladstone Land also owns 49,000 acre-feet of banked water in California worth approximately $1.5 billion. About 40% of Gladstone Land's acreage is utilized for organic produce. Its acreage is 99.4% leased.

Gladstone has paid out 135 consecutive monthly cash distributions since its January 2013 IPO and has increased its dividend 34 times over the last 37 quarters.

On May 7, Gladstone Land released its first quarter operating results. FFO of $0.14 missed the estimate of $0.15 and was below the FFO of $0.17 in Q1 2023. Revenue of $20.252 million missed the consensus estimate of $22.307 million and was below revenue of $21.202 million in Q1 2023.

On June 11, Alliance Global Partners initiated coverage on Gladstone Land with a Buy rating and announced a price target of $16. Oppenheimer rates Gladstone Outperform and also has a $16 price target. Gladstone Land was recently trading at $13.60.

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(June 13, 2024)

https://finance.yahoo.com/news/analysts-just-initiated-coverage-four-173951591.html


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>>> This NFL Legend Has Built A Wine Empire, Calls It Fun But Not Easy


Benzinga

by Deidre Woollard

Jul 31, 2024


https://finance.yahoo.com/news/nfl-legend-built-wine-empire-110008283.html


This NFL Legend Has Built A Wine Empire, Calls It Fun But Not Easy

Not every football player leaves the NFL and finds their footing in an entirely different business. In fact, many NFL players lose much of their wealth in the years after retirement. Drew Bledsoe, a number one draft pick and the former quarterback for the New England Patriots, is one who has managed to have a fantastic second act in a field that many of us dream of getting into: the wine business.

In an interview with Jason Raznick on The Raz Report podcast, Bledsoe explained that he didn't venture into entrepreneurship until he retired but credits having good financial advisors along the way for "not letting me do anything super stupid" and saying no to him frequently. Once he retired, Bledsoe and his wife Maura decided to pursue their dream. In 2007, they returned to his hometown of Walla Walla, Washington and purchased land in the Walla Walla American Viticultural Area (AVA). They partnered with winemaker Josh McDaniels and focused on growing cabernet sauvignon. Since that initial investment, they have expanded their winery to include five estate vineyards in the Walla Walla Valley.

The Power Of Persistence

After the initial success with Doubleback, the Bledsoes expanded, creating two more labels under the Bledsoe Wine Estates brand. The Bledsoe Family Winery produces accessible varietals, while the Bledsoe|McDaniels Winery was established to offer their version of the Willamette Valley's Pinot Noir. They also expanded into homegrown Syrah, with these limited-production wines available to wine list members.

Bledsoe describes the journey to success in the wine industry as fun but challenging. "It's been super rewarding to see something grow from a single vineyard that we planted with our hands to a company that has 70 employees and over 450 acres of vineyards," he said.

Like any type of investment, investing in the wine business requires time and patience. "Sometimes you are talking a decade before you get to see the literal fruits of your labors," Bledsoe added. Unlike football, where results are immediate, the wine industry requires long-term commitment and resilience.

Bledsoe sees parallels between being a quarterback and owning a business, citing skills such as planning, executing decisions, building a team, and dealing with adversity as lessons.

In addition to his winery businesses in Washington, Bledsoe has invested in real estate in Whitefish, Montana. He describes the market as rapidly growing since he first discovered it in 1996. Speaking about his home, he said it's one of his better investments but one that he will never realize because then he would have to sell, move, and find another house. He said he has dabbled in real estate, with some good and bad outcomes.

When it comes to investing, Bledsoe has primarily left stock investments to his financial advisors, giving him time to devote to what he knows best. Investing in wineries can be a tough business. As Bledsoe mentioned, it's a luxury business that is very tied to the strength of the economy and the vicissitudes of Mother Nature. It also requires tremendous capital and knowledge, both of which Bledsoe has as he focuses on building a wine empire for the long haul.

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>>> Deere may be cyclical, but the stock is a bargain


https://finance.yahoo.com/news/high-hopes-3-dirt-cheap-121500958.html


After an initial surge in early 2021, Deere stock has gone practically nowhere despite achieving record profits last year. Unfortunately, there have been glaring signs that Deere could enter a downturn.

It is a highly cyclical stock. When the company's customers are in expansion mode (and financing is inexpensive), they might be inclined to make a big purchase of its industrial machinery like farming and forestry equipment.

But when the cycle turns, Deere's sales can fall in a flash. The trick is to pay a reasonable multiple based on a company's mid-cycle earnings. Its P/E will look low when it is coming off a strong year and will be high coming off a bad year. Understandably, its P/E looks dirt cheap at just 10.9 -- but earnings are expected to decline over the medium term.

Consensus analyst estimates have Deere earning $22.79 per share in fiscal 2024 and $22 in fiscal 2025, compared to $33.17 in fiscal 2023.

It would be one thing if Deere's stock surged in lockstep with its earnings growth, but it didn't. In fact, earnings have nearly doubled over the last three years while the stock is up just 3%. Deere's earnings could be cut in half, and it would still have a P/E of about 22. It is simply too good a company to be this cheap.

Another reason to get excited about Deere is its earnings trajectory and automation and artificial intelligence advancements. The company has been ramping up research and development spending, investing in autonomous tractors, and automating farm tasks, such as crop spacing and recommended fertilizer use that can save operators money. It is making sizable product improvements that might not impact its bottom line until the next uptick in the cycle.

The stock only yields 1.6%, but that's mainly because it uses both dividends and buybacks to reward shareholders. Over the last five years, the dividend is up over 93% while its outstanding share count is down 12.5%. That's roughly the same pace of buybacks that Apple has done in the last five years, which is impressive considering Apple is famous for buying back a boatload of its stock.

Add it all up, and Deere looks like an excellent value stock to buy now.

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>>> American Icon John Deere Slashing 600 Jobs To Move To Mexico

6-29-24

https://www.msn.com/en-us/money/companies/american-icon-john-deere-slashing-600-jobs-to-move-to-mexico/ar-BB1p7Ue1?OCID=ansmsnnews11


John Deere, the renowned manufacturer of tractors and crop harvesters, has recently announced a significant wave of layoffs.

On Friday, approximately 610 production staff at its plants in Illinois and Iowa were told they would be out of job at the end of summer. The company is letting go 280 workers from a plant in East Moline, Illinois, and 230 from a factory in Davenport, Iowa.

Additionally, about 100 production employees at the company's Dubuque, Iowa, plant will also be impacted.

These layoffs are said to be effective from August 30, as stated in a press release.

The reason cited for these layoffs is the reduced demand for John Deere's products from these particular factories.

The company, which reported profits of $10.166 billion last year, mentioned that rising operational costs and declining market demand necessitate enterprise-wide changes to better position the company for the future.

In light of the layoffs, affected workers will be offered Supplemental Unemployment Benefits (SUB). This will cover approximately 95% of their weekly net pay for up to 26 weeks, depending on their years of service.

They will also receive profit-sharing options and health benefits to assist them during this transition period.

It's the latest round of layoffs that started last fall.

John Deere, known for its iconic green and yellow branding and long-standing history since its establishment in 1837, recently announced a decision to shift the manufacturing of skid steer loaders and compact track loaders from its Dubuque facility to Mexico by the end of 2026.

This move is aimed at adapting its business model, addressing rising manufacturing costs, and enhancing operational efficiencies.

The company has faced previous rounds of layoffs including:

225 at its Harvester Works plant in East Moline
34 at its Moline Cylinder Works factory
150 at a plant in Ankeny, Iowa.

Approximately 500 employees have been let go at its Waterloo plant in Iowa.

Despite these changes, John Deere's market capitalization stood at around $102.81 billion, with significant net sales and revenues reported over the first two quarters of the year.

This comes months after a judge stated that plaintiffs in a lawsuit against John Deere met legal thresholds. Crop farmers and farmers have filed a suit stating that John Deere unlawfully conspired to restrict services for maintenance and repair.

"According to the complaint's allegations, Deere has the ultimate control of the repair services market," Johnston wrote in his 89-page order. "These allegations are not mere legal conclusions. The complaint is chock-full of factual allegations to support this conclusion."

In addition, the agricultural equipment industry is experiencing challenges due to lower crop prices, leading to excess inventory and decreased sales of large agricultural equipment

The Department of Agriculture forecasts a 25.5% decline in farm income this year, adding to the industry's struggles.

These developments come amidst reports that John Deere CEO John May has put his 80-acre horse farm property up for sale, with an asking price of $3.925 million.

As the company navigates market challenges and restructuring efforts, the impact on employees and the broader industry remains a focal point of concern.

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Chart setup - >>> Archer-Daniels-Midland Company (ADM) engages in the procurement, transportation, storage, processing, and merchandising of agricultural commodities, ingredients, flavors, and solutions in the United States, Switzerland, the Cayman Islands, Brazil, Mexico, Canada, the United Kingdom, and internationally. It operates in three segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The company originates, merchandises, stores, and transports agricultural raw materials, such as oilseeds and soft seeds. It also engages in the agricultural commodity and feed product import, export, and distribution; and various structured trade finance activities. In addition, the company offers soybean meal and oil; vegetable and salad oils and protein meals; ingredients for the food, feed, energy, and industrial customers; margarine, shortening, and other food products; and partially refined oils to produce biodiesel and glycols for use in chemicals, paints, and other industrial products. Further, it provides peanuts, peanut-derived ingredients, and cotton cellulose pulp; sweeteners, corn and wheat starches, syrup, glucose, wheat flour, and dextrose; alcohol, and other food and animal feed ingredients; ethyl alcohol and ethanol; corn gluten feed and meal; distillers' grains; corn germ; and citric acids. Additionally, the company provides proteins, natural flavors, flavor systems, natural colors, emulsifiers, soluble fiber, polyols, hydrocolloids, probiotics, prebiotics, postbiotics, enzymes, and botanical extracts; and other specialty food and feed ingredients; edible beans; formula feeds, and animal health and nutrition products; and contract and private label pet treats and food products. It also offers futures commission merchant; commodity brokerage services; cash margins and securities pledged to commodity exchange clearinghouse; and cash pledged as security under certain insurance arrangements. The company was founded in 1902 and is headquartered in Chicago, Illinois.

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>>> Why Vertical Farms worldwide are failing -

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>>> 'Unhealthy dose' of pesticides found in popular produce, new report reveals


Fox Business

by Daniella Genovese

4-18-24


https://www.msn.com/en-us/health/nutrition/unhealthy-dose-of-pesticides-found-in-popular-produce-new-report-reveals/ar-AA1ng5bH?cvid=be3ca3c907324f41e3c5957f5501587a&ei=46


About 20% of all fruits and vegetables examined by Consumer Reports in a new report revealed an "unhealthy dose of dangerous pesticides."

Consumer Reports published the report — its "most comprehensive review" of pesticides in food to date — after analyzing 59 common fruits and vegetables, which included fresh, canned, dried and frozen products.

"Our new results continue to raise red flags. Pesticides posed significant risks in 20 percent of the foods we examined," Consumer Reports said.

CHEMICAL FOUND IN CHEERIOS, QUAKER OATS, OTHER OAT-BASED FOODS LINKED TO POTENTIAL HEALTH ISSUES: STUDY

Bell peppers, blueberries, potatoes and strawberries were included in the report, as well as green beans, which "had residues of a pesticide that hasn’t been allowed to be used on the vegetable in the U.S. for over a decade," according to the report.

"Imported produce, especially some from Mexico, was particularly likely to carry risky levels of pesticide residues," the organization said.

CHLORMEQUAT: WHAT IS THE CHEMICAL FOUND IN CHEERIOS, QUAKER OATS?

Consumer Reports analyzed seven years of data from the Department of Agriculture, which every year tests a selection of conventional and organic produce grown in or imported to the U.S. for pesticide residues.

Certain chemicals are used by farmers to control bugs, fungi and weeds. However, some of these chemicals carry "unacceptable health risks."

Consumer Reports said that certain "notorious pesticides, such as DDT, have been banned in the U.S." but claimed that government regulators have been slow to ban others. Additionally, the outlet argued that when a dangerous chemical is removed from the market, chemical companies and growers, in some cases, start relying on "other options that may be as dangerous."

Consumer Reports said that it has been tracking the use of pesticides on produce for decades and has "seen this pattern repeat itself over and over."

On the other hand, it said pesticides "presented little to worry about in nearly two-thirds of the foods," which included nearly everything that was organic.

According to Consumer Reports' analysis, "the largest risks are caused by just a few pesticides, concentrated in a handful of foods, grown on a small fraction of U.S. farmland."

According to its analysis, about 16 of the 25 fruits and about 21 of the 34 vegetables tested showed low levels of pesticide risk. This means that kids and those who are pregnant can safely consume more than three servings a day of those foods, Consumer Reports food safety experts said.

Ten foods were of moderate risk. This means up to three servings a day were safe to consume.

A dozen foods "presented bigger concerns." This means kids and pregnant women should consume less than a serving a day of high-risk fruits and vegetables. They should also consume less than half a serving per day of very high-risk ones, Consumer Reports said.

"Everyone else should limit consumption of those foods, too," it said.

Consumer Reports created a list of six conventionally grown fruits and vegetables where pesticides pose a serious problem and possible substitutions for them.

Substitutions: organic blueberries did well and fresh domestic strawberries fared okay.

Substitutions: organic bell peppers are the best choice or to consume this food "sparingly."

Hot peppers also posed a "high risk," Consumer Reports said.

Substitutions: sweet potatoes pose a low risk.

Substitutions: snap peas pose a low risk. Organic green beans grown domestically are also a good substitute.

Substitutions: organic kale and mustard greens as well as broccoli all pose a very low risk.

Fresh spinach, which is also a better choice, poses a moderate risk.

Substitutions: organic watermelon. Cantaloupe also poses a very low risk.

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>>> ADM Rises After Revising Years of Internal Unit Sales


Bloomberg

by Gerson Freitas Jr.

March 12, 2024


https://finance.yahoo.com/news/adm-revises-years-internal-sales-111050920.html


(Bloomberg) -- Archer-Daniels-Midland Co. investors appeared to breathe a sigh of relief Tuesday, driving the commodity giant’s shares higher after its delayed annual report didn’t deliver the kind of bombshell financial revelations some had feared.

In its annual report, ADM revised its intersegment sales for the last three years following an internal probe into its financial reporting and disclosed a $137 million impairment charge related to its animal nutrition unit. ADM confirmed in its annual filing that the various adjustments didn’t impact overall earnings.

“ADM could have been worse,” Vital Knowledge wrote in a note after the company provided a long-awaited update on its internal investigation into its financial reporting. It also reported quarterly results, offered guidance for 2024 and announced a $2 billion share buyback, which together helped drive shares higher, it said.

Shares rose as much as 5.6%. ADM’s stock price had earlier fallen about 19% since Jan. 19, the last trading day before it disclosed the investigation.

The adjustments and charge gave investors one of their first indications of the magnitude of the scandal that had wiped out more than $7 billion in ADM’s value since first disclosed earlier this year. Overall, the adjustments “were not as significant as some feared,” analysts for Citi Research said in a note, calling the changes “relatively minor.”

In January, ADM stunned the agricultural trading and processing world when it suspended its chief financial officer, Vikram Luthar, pending a probe into accounting practices at its nutrition unit following a request for information from the US Securities and Exchange Commission. The company said little about the probe in subsequent weeks, before disclosing earlier this month that the “material weakness” it had uncovered in its internal controls wasn’t expected to have a broader impact on earnings.

“The company did not have adequate controls in place around measurement of certain intersegment sales” between its nutrition segment and other key units, Chief Executive Officer Juan Luciano said in the filing. ADM has put in place a plan to remediate this material weakness, it said. Luciano said on an earnings call that he would not take questions about the investigation.

The changes include a $31 million reduction in 2023 segment operating profit for the nutrition unit, and cuts of $68 million and $59 million in 2022 and 2021, respectively. It also restated gross revenues for the segment. In addition, it has released adjusted segment operating profit going back to 2018. The investigation covered the period between January 2018 and September 2023.

To be sure, ADM is not out of the woods yet. The company confirmed in the filing certain current and former employees have received subpoenas from the Department of Justice.

ADM has spent billions expanding its nutrition business since 2014, when it made its biggest-ever acquisition — the $3 billion buyout of European natural ingredient maker Wild Flavors — in a bid to diversify from row crop grains and oilseeds into processed products. ADM also spent about $1.8 billion to buy an animal feed maker in 2019. But the unit’s profits have failed to live up to initial expectations due to weakening demand, including for plant-based food, raising questions about ADM’s big growth bet.

In a separate filing, ADM reported fourth-quarter earnings and offered 2024 guidance. It sees adjusted earnings per share in the range of $5.25 to $6.25 per share, down 18% compared to 2023 using the midpoint of the range.

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>>> Deere & Company (NYSE:DE) -- Number of Hedge Fund Holders: 55

https://finance.yahoo.com/news/14-best-robotics-stocks-buy-194148400.html

Deere & Company (NYSE:DE) is a global manufacturer and distributor of farming equipment, operating in four segments – Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. In 2021, the company announced a definitive agreement to acquire Bear Flag Robotics, a Silicon Valley-based startup specializing in autonomous driving technology for existing machines. The $250 million deal aims to expedite the development and deployment of automation and autonomy in farming.

According to Insider Monkey’s third quarter database, 55 hedge funds were long Deere & Company (NYSE:DE), compared to 56 funds in the prior quarter. Bill & Melinda Gates Foundation Trust is the leading stakeholder of the company, with approximately 4 million shares worth $1.5 billion.

ClearBridge Large Cap Value Strategy made the following comment about Deere & Company (NYSE:DE) in its Q4 2022 investor letter:

“Our industrials holdings produced robust absolute returns for the quarter. While the ISM Manufacturing Index fell in November to contractionary levels, our industrial holdings have largely been able to maintain earnings due to strong competitive positions, historically large backlogs and company-specific drivers. For example, Deere & Company (NYSE:DE) continues to benefit from a strong upgrade cycle as record farmers’ income is driving broad and rapid adoption of the company’s precision agricultural equipment.”

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>>> ADM Delays Annual Report as It Warns on Internal Controls


Bloomberg

by Simon Casey and Gerson Freitas Jr.

March 1, 2024


https://finance.yahoo.com/news/adm-delays-annual-report-warns-123048655.html


(Bloomberg) -- Archer-Daniels-Midland Co. delayed its annual report and indicated that a “material weakness” in its internal controls won’t have a broad impact on earnings.

The Chicago-based company, one of the world’s top agricultural commodity traders, said the issue with internal controls relates to the way it reports sales between segments, according to a regulatory filing Friday. As a result, it doesn’t expect an impact on balance sheets, earnings statements, income or cash flow.

The brief update comes after ADM stunned investors and the commodities trading world earlier this year by placing its Chief Financial Officer Vikram Luthar on administrative leave pending an internal probe. The US Attorney’s Office in Manhattan has launched an investigation into the reporting of inter-segment transactions, people familiar with the matter said last month.

The company’s accounting investigation is centered around its nutrition unit, which makes higher-value products including flavorings and pet-food ingredients.

The filing suggests that a zero-sum outcome to ADM’s investigation “is becoming increasingly likely,” Morgan Stanley analyst Steven Haynes said in a note, adding it’s still not clear how much earnings will be shifted from the nutrition unit to the other company businesses.

ADM’s shares rose as much as 3.1% on Friday, but are still down almost 25% this year.

The probe has also thrown the spotlight on the decade-long push, largely under the leadership of Chief Executive Officer Juan Luciano, to lessen ADM’s dependence on its legacy agricultural commodities trading business.

Read More: ADM Probe Highlights Struggle to Expand Beyond Crop Trading

ADM expanded the nutrition business with its $3 billion purchase of European natural ingredient maker Wild Flavors a decade ago, its biggest-ever acquisition. It also spent almost $1.8 billion buying out French animal feed maker Neovia.

But profits have so far failed to live up to initial expectations due to weak demand, including for plant-based food and animal feed ingredients.

The unit also played an outsized role on recent executive bonuses even as it accounted for a relatively small part of the agribusiness giant’s business.

Read More: ADM Unit Being Probed Helped Make Leaders Over $70 Million

ADM said its form 10-K, which was originally expected in February, will be filed by March 15, within the extension period allowed under US rules. It anticipates correcting certain inter-segment sales that “were not recorded at amounts approximating market.”

ADM also said it’s working to remediate the material weakness, which will be explained further in its annual report.

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Archer Daniels Midland (ADM) -- >>> Scandals


https://en.wikipedia.org/wiki/ADM_(company)


Sherman antitrust violation

In 1920 the US Department of Justice brought suit against the National Linseed Oil Trust for violating the Sherman Antitrust Act. Several co-defendants were named, including the Archer-Daniels Manufacturing Company. The suit alleged all of these companies were acting in collusion to raise prices, citing a spike in linseed oil costs between 1916 and 1918, when the price rose from $.50 per gallon to $1.80.[73]

Price fixing

See also: Lysine price-fixing conspiracy

In 1993, the company was the subject of a lysine price-fixing investigation by the U.S. Justice Department. Senior ADM executives were indicted on criminal charges for engaging in price-fixing within the international lysine market. Three of ADM's top officials, including vice chairman Michael Andreas were eventually sentenced to federal prison in 1999. Moreover, in 1997, the company was fined $100 million, the largest antitrust fine in U.S. history at the time.[74] Mark Whitacre, FBI informant and whistleblower of the lysine price-fixing conspiracy, would also find himself in legal trouble for embezzling money from ADM during his time as an informant for the FBI. In addition, according to ADM's 2005 annual report, a settlement was reached under which ADM paid $400 million in 2005 to settle a class action antitrust suit.[75] The Informant is a nonfiction thriller book based on this event, which was later adapted into the 2009 film The Informant!.[76]

Tax dodging

A noteworthy case of transfer mispricing came to light in 2011 in Argentina involving the world's four largest grain traders: ADM, Bunge, Cargill and LDC. Argentina's revenue and customs service began an investigation into the four companies when prices for agricultural commodities spiked in 2008 and yet very little profit for the four companies had been reported to the office. As a result of the investigation, it was alleged that the companies had submitted false declarations of sales and routed profits through tax havens or through their headquarters. In some cases, they were said to have used phantom firms to buy grain and had inflated costs in Argentina in order to reduce the recorded profits earned in the country.[77] According to the country's revenue and customs service, the outstanding taxes amounted to almost US$1 billion.[78] The companies involved have denied the allegations. To date, the Argentinian tax authorities have not replied to the Swiss NGO Public Eye’s request regarding the current state of the case.[79] In its 2018 annual report to the US Securities and Exchange Commission (SEC), Bunge mentioned provisions which suggest that the case is still ongoing: "[A]s of December 31, 2018, Bunge's Argentine subsidiary had received income tax assessments relating to 2006 through 2009 of approximately 1,276 million Argentine pesos (approximately $34 million), plus applicable interest on the outstanding amount of approximately 4,246 million Argentine pesos (approximately $113 million[80])."[81]

Violation of the Foreign Corrupt Practices Act

On December 20, 2013, the SEC announced that it had charged ADM for failing to prevent illicit payments (bribes) made by its foreign subsidiaries to Ukrainian government officials in violation of the FCPA. Alfred C. Toepfer International Ukraine Ltd. (ACTI Ukraine), plead guilty in the Central District of Illinois to one count of conspiracy in violation of the anti-bribery sections of the FCPA. They agreed to pay $17.8 million in fines. The Department of Justice also entered into a non-prosecution agreement with ADM due to the company's failure to implement a system of internal financial controls, addressing improper payments both in Ukraine and by an ADM joint venture in Venezuela. ADM agreed to pay more than $36 million to settle the SEC's charges, bringing the total amount paid to over $54 million.[82][83]

The Swiss NGO Public Eye elaborated the case.[84][85]

Sonny Perdue land sale

In 2021, an investigation by the Washington Post found that ADM had sold land to incoming Secretary of Agriculture Sonny Perdue in 2017 at a fraction of its estimated value. Ethics lawyers had legal and ethical concerns about the sale, questioning whether it amounted to bribery. According to the Post, ADM "sold the land at a small fraction of its estimated value just as it stood to benefit from a friendly secretary of agriculture."[86]

Accounting practices

In January 2024, ADM disclosed that the SEC requested information regarding its accounting practices at its nutrition business on "intersegment transactions." ADM suspended its CFO, postponed its quarterly earnings report and annual filings, and said it was cooperating with the SEC investigation. In 2020, ADM's board agreed to have bonuses of senior executives tied to the nutrition segment's success—a unit which accounts for less than 10 percent of the company's revenue—replacing the standard practice of tying the award to adjusted earnings. In January 2023, its seven top executives collectively received shares worth about $72 million for exceeding those performance metrics.[87][88]

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>>> Why Archer-Daniels-Midland Stock Plunged 25% This Week


by Steve Symington,

Motley Fool

January 25, 2024


https://finance.yahoo.com/news/why-archer-daniels-midland-stock-234506028.html


Shares of Archer-Daniels-Midland (NYSE: ADM) are down 25% this week, according to data provided by S&P Global Market Intelligence, after the commodities trading company announced a new interim CFO amid an ongoing accounting investigation.

On ADM's abrupt CFO departure

In a press release on Sunday, ADM announced it has appointed Ismael Roig as interim CFO, following a decision by ADM's board of directors to place its previous CFO, Vikram Luthar, on administrative leave, effective immediately.

ADM added that Luthar's leave is pending an ongoing investigation by outside counsel for the company regarding "certain accounting practices and procedures [within] ADM's Nutrition reporting segment, including as related to certain intersegment transactions."

ADM initiated the investigation in response to a voluntary disclosure request from the U.S. Securities and Exchange Commission (SEC).

What's next for ADM investors?

The issue is fast becoming a contentious one; at least one investor has already (perhaps predictably) filed a lawsuit accusing the company of fraud. Various industry watchers have also observed that while ADM's Nutrition segment is responsible for less than 10% of total sales, it also has an outsized influence on the executive team's equity bonus compensation structure.

While the final outcome of the investigation has yet to be determined, ADM management has their work cut out for them in restoring investor trust as long as speculation swirls around the accounting practices in question. Until the public receives more clarity on the issue, it's no surprise to see the stock pulling back in response.

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[wow_happens28]

I had a friend who had a plane and we flew over the "hills" a couple of times. Mt Rushmore was a "No fly " zone, but we could then flow over The Devils Tower near by. It is now a no fly zone. We were lower than the top and had mountain climbers waving at us. it might be because of us that it became a no flu zone. imagine a climber waving at us and losing his grip and ..........

https://www.bing.com/images/search?view=detailV2&ccid=kdX%2bGUe7&id=721BB75CE1D434C86A8C5ACF0556BF3755AE55B0&thid=OIP.kdX-GUe7gcZHTodFP52JxwHaJ4&mediaurl=https%3a%2f%2f3.bp.blogspot.com%2f_e3O7y_5xf2g%2fTFlkcX3CfrI%2fAAAAAAAAADo%2fUumGRDzavsU%2fs1600%2fP7260052.JPG&cdnurl=https%3a%2f%2fth.bing.com%2fth%2fid%2fR.91d5fe1947bb81c6474e87453f9d89c7%3frik%3dsFWuVTe%252fVgXPWg%26pid%3dImgRaw%26r%3d0&exph=1600&expw=1200&q=devils+tower+mt+climbing&simid=608024312982108643&FORM=IRPRST&ck=442E925D302A5864EC851E3003C16C1E&selectedIndex=11&itb=0&qpvt=devils+tower+mt+climbing&ajaxhist=0&ajaxserp=0

https://www.nps.gov/deto/index.htm

[gfp927z]

Yes, I hear ya. I skipped voting for a lot of years, figuring it was a lost cause, and also voted Libertarian a couple times out of frustration.

Btw, Sylvan Lake does look great. My dad was a pilot and one year we saw the Black Hills from the air. It sure looks like a great place to explore -

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[wow_happens28]

I am in Minnesota. Lake Sylvan in the Black Hills is my favorite place on earth. I lived in Rapid City from 1976-1978.What I know about here is I love her politics. I am just afraid we have already lost our country to the antichrist secret societies. I mean, a country electing a man with dementia who was losing big time at 3AM and the computers go off and he wins, and 18,000,000 more people voting than registered? I also feel Trump, a former Democrat(supposedly) is jus an actor now to help the people see what is really going on, preparing us for a new world government based on socialism that is just a nice sounding word for slavery, but slavery it is. With what they got away with, how can anybody stop this big one-party system disguised as 2?

[gfp927z]

As a South Dakota resident, just curious what you think of your current Governor, Kristi Noem? She looks like a potential contender for the VP slot in the coming election (video below). It wouldn't be surprising to see her as Trump's VP, assuming he is on the ticket next Nov -

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[gfp927z]

>>> Deere & Company (DE)


https://www.insidermonkey.com/blog/5-best-mario-gabelli-stocks-other-billionaires-are-also-piling-into-1235826/2/


Number of Billionaire Investors In Q3 2023: 14

Deere & Company (NYSE:DE) is one of the world’s biggest industrial machinery firms known for its tractors, crawlers, and other products. More than three quarters of its stock is owned by institutional investors, indicating a strong foundation but also implying low liquidity.

During September 2023, 55 out of the 910 hedge funds profiled by Insider Monkey were the firm’s shareholders. Deere & Company (NYSE:DE)’s biggest hedge fund investor is Michael Larson’s Bill & Melinda Gates Foundation Trust as it owns $1.4 billion worth of shares.

<<<



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[gfp927z]

Yes, looks like a great board, and brings out one's 'inner disc jockey' lol. I had a college friend who had a DJ slot on the campus radio station, and we all envied him :o)




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[wow_happens28]

Looks like you found a new home at the "fun house", and they enjoy you too. I posted there many for a few years when I was paid, then on happy hour. Tree(real name Forest}, is from Kansas City. He was up here in Minneapolis a few years ago for a couple of weeks for job training and I took him to the Mall Of America, drove by the brand new Vikings stadium and went to a Twins game. he, Larry and POS are nice easy going dudes. B2B is out moving to a new home, but he is a nice old guy too. It is a fun house, no politics, just fun. No bad dudes on the board.

[gfp927z]

>>> Tractor Supply Company (NASDAQ:TSCO)

https://www.insidermonkey.com/blog/5-best-sp-500-stocks-for-dividend-growth-1193160/

5-Year Average Dividend Growth: 28.16%

Number of Hedge Fund Holders: 37

Tractor Supply Company (NASDAQ:TSCO) is an American retail company that specializes in catering to the needs of rural and suburban customers. In the past five years, the company grew its dividends by 28.16% on average. It currently pays a quarterly dividend of $1.03 per share for a dividend yield of 1.89%, as recorded on September 11. It is one of the best dividend stocks on our list with 14 years of consistent dividend growth.

At the end of June 2023, 37 hedge funds tracked by Insider Monkey held stakes in Tractor Supply Company (NASDAQ:TSCO), compared with 39 in the previous quarter. The collective value of these stakes is over $560.7 million.

<<<



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[gfp927z]

Tractor Supply - >>> 2 Fantastic Reasons Tractor Supply Should Continue Harvesting Growth for Investors


Motley Fool

By Will Healy

Sep 22, 2023


https://www.fool.com/investing/2023/09/22/2-fantastic-reasons-tractor-supply-harvesting/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


KEY POINTS

Shares of the rural lifestyle retailer have risen by nearly 62,000% since 1994.

More people are moving to rural America, increasing its addressable market.

The rural lifestyle retailer is not done growing despite a 49-state footprint.


Tractor Supply (TSCO) is arguably an easy stock to write off for most investors. The company's stores are away from population centers, so it is not a fixture in areas where most Americans live.

Moreover, it has built approximately 2,200 stores spread across 49 states and has shown no apparent inclination to expand internationally. Thus, you might assume it is nearing market saturation.

Nonetheless, Tractor Supply has harvested massive returns for investors, and as it continues forward, its growth should continue for the following reasons.

1. Plenty of room for store growth

Tractor Supply has prospered by carving out a niche among rural lifestyle enthusiasts. Its primary demographic consists of the so-called "hobby farmers" who live on a few acres and engage in smaller-scale agriculture. This approach has taken the stock an astounding 61,500% higher since its initial public offering in 1994.

And the company has not hesitated to acquire retailers in related areas, like the separate Petsense chain for companion animals. It has also bought out other chains like Orscheln Farm & Home, which will become additional Tractor Supply locations. Hence, it remains expansion-minded through a mix of sticking to its core concept and serving the pet market.

Rural America has also begun to grow in population. More employees and contractors work remotely, and the pandemic prompted many former city dwellers to move to the countryside, a trend expanding Tractor Supply's addressable market.

2. Strong financials (relatively speaking)

Tractor Supply's financials have shown some resilience. Despite slow comparable-store sales growth in the first quarter, its net sales in the first half of 2023 were $7.5 billion, 8% more than in the same period last year. Net income was $604 million during the first two quarters of the year, though rising operating expenses meant its profits only grew 3% from year-ago levels.

Due to concerns about falling customer spending, Tractor Supply reduced its 2023 revenue estimate to $14.85 billion at the midpoint, down from $15.15 billion. It also adjusted its net income forecast to a mid-range estimate of $1.135 billion, down from $1.15 billion.

The stock has fallen slightly this year, but that did not stop Tractor Supply from raising its dividend by 12% in February, amounting to a near doubling of the payout in two years. With the dividend now at $4.12 per share annually, new shareholders will earn a 1.9% dividend yield, well above the S&P 500's 1.5% payout.

The retailer has hiked its payout every year since introducing it in 2010, raising its profile as a dividend stock, especially with the size of the aforementioned increases. So investors might want to buy it despite its price-to-earnings ratio of 21, a moderate level considering the history of the stock.

Consider Tractor Supply

Despite an extensive 49-state footprint and some recent sluggishness, Tractor Supply is not done returning bumper crops of growth and earnings. The company has many avenues related to its core business that it can take advantage of, especially with a rising rural population.

Even at a moderate valuation, its history of massive growth and a fast-growing dividend should help boost the retail stock. If more urban investors take notice of Tractor Supply's success in the countryside, it could reap a bountiful harvest.

<<<



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[gfp927z]

>>> Tractor Supply -- Paying a 1.8% dividend, rural lifestyle retailer Tractor Supply has the largest yield of this group. Over the last five years, Tractor Supply has seen annualized dividend growth of 28% and maintained a payout ratio of 39%. A company's payout ratio measures the percentage of net income used to pay its dividends each year -- highlighting that Tractor Supply has ample room for increases, even if net income doesn't grow.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


However, the company has increased earnings per share (EPS) by 19% annually since 2013, so it isn't likely the company's profits will stagnate for an extended period. Led by a Neighbor's Rewards Club with over 31 million members -- a figure that grew by 19% from last year -- Tractor Supply's sales are steadier than one might think.

Even as consumer spending tightened in 2023, leading to a drop in seasonal and big-ticket purchases, the company eked out same-store sales growth of 3% thanks to its consumable, usable, and edible (CUE) sales rising by over 10%. These repeat sales help Tractor Supply generate consistent profitability, recording a return on invested capital (ROIC) of 34%. This ROIC places the company in the top decile of the S&P 500 and is an excellent sign for interested investors as stocks with higher ROICs outperform their less-profitable peers.

With a price-to-earnings (P/E) ratio of 22, Tractor Supply trades at a slight discount to its historical averages, making it an elite dividend growth stock to buy and hold forever.

<<<



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[wow_happens28]

Every stock I sold a month ago got wacked today. You mentioned LAND, CDE really went red

https://stockcharts.com/h-sc/ui?s=CDE&p=D&yr=0&mn=8&dy=0&id=p96247580590

[gfp927z]

I see the farmland REITS (LAND, FPI) are getting whacked today, after FPI missed earnings. Looks like a considerable 'whiff', and the stock is down almost 12%. LAND also down 4%. As much as I'd like to have some diversification via the farmland / agro sector, these are just too volatile for my frazzled nerves, lol.

Fwiw, my mom's relatives had a 150 acre farm in Illinois years ago. I guess land qualifies as the ultimate 'hard asset', although increasingly it's being scooped up by big commercial farming outfits, and billionaires like Gates and Bezos.



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[gfp927z]

>>> Russia pulls out of Ukraine grain deal, in potential blow to global food supplies


CNN

by Rob Picheta

July 17, 2023


https://www.msn.com/en-us/news/world/russia-pulls-out-of-ukraine-grain-deal-in-potential-blow-to-global-food-supplies/ar-AA1dXUUQ?OCID=ansmsnnews11;


Russia said Monday it was suspending its participation in a crucial deal that allowed the export of Ukrainian grain, once again raising fears over global food supplies and scuppering a rare diplomatic breakthrough to emerge from Moscow’s war in Ukraine.

The agreement, brokered by Turkey and the United Nations in July 2022, was officially set to expire at 5 p.m. ET on Monday (midnight local time in Istanbul, Kyiv, and Moscow).

Kremlin spokesperson Dmitry Peskov told reporters on Monday that Russia would not renew the pact right now, saying it “has been terminated.”

Russia has for some time complained that it is being prevented from adequately exporting its own foodstuffs, and Peskov cited that objection as the reason for pulling out of the deal. “As soon as the Russian part is completed, the Russian side will return to the implementation of this deal immediately,” he told reporters.

Over the weekend, Russian President Vladimir Putin said that the main objective of the deal – supplying grain to countries in need – “has not been realized,” again complaining that Russia faced obstacles exporting its own food.

Peskov left the door open to reviving the deal in the future, saying that Russia will comply “as soon as the Russian part (of the deal) is completed.”

US Secretary of State Antony Blinken last week accused Russia of using the grain deal “as a weapon.”

A vital deal for global food security

The deal allowed Ukraine to export grain by sea, with ships bypassing a Russian blockade of the country’s Black Sea ports and navigating safe passage through the waterway to Turkey’s Bosphorus Strait in order to reach global markets.

Vessels were inspected before they arrived in Ukraine by Russian, Ukrainian and Turkish officials, to ensure weapons were not being smuggled into Ukraine.

It proved vital for stabilizing global food prices and bringing relief to the developing countries which rely on Ukrainian exports. The impact of the war on global food markets was immediate and extremely painful, especially because Ukraine is a major supplier of grain to the World Food Programme (WFP).

According to the European Commission, Ukraine accounts for 10% of the world wheat market, 15% of the corn market, and 13% of the barley market. It is also a key global player in the market of sunflower oil. The Food and Agriculture Organization (FAO), an UN body, warned at the time that as many as 47 million people could be pushed into “acute food insecurity” because of the war.

Since its implementation, the Black Sea Grain Initiative has allowed for the export of nearly 33 million metric tons of foodstuffs from Ukraine. The World Food Programme has shipped more than 725,000 tons to support humanitarian operations – helping to relieve hunger in some of the hardest hit corners of the world, including Afghanistan, Ethiopia, Kenya, Somalia, Sudan and Yemen.

The rate of exports made under the deal had started to tail off in recent months; UN figures show that May and June were the two months with the fewest metric tons exported since August 2022.

In withdrawing from the pact, the Russian Foreign Ministry said Monday that its government was removing guarantees for safe navigation in the Black Sea.

There are alternative routes for Ukrainian grain and oilseed exports by rail through eastern Europe, but they can’t readily cope with the volume that Ukraine wants to export.

A UN official confirmed to CNN that the UN office in Istanbul, Turkey, received written notice from Russia that they were ending participation on Monday.

The UN official said that their main concern the inevitable human suffering that will result from the deal’s termination: “There is simply too much at stake in a hungry and hurting world.”

Russia’s objections to the deal centered around claims that obstacles to their ability to export foods and fertilizers had still not been eased.

Russian President Vladimir Putin said last Thursday, during an on-camera interview, that “not a single point related to the fact that there are interests of the Russian Federation have not been fulfilled. Despite this, we voluntarily extended this deal many times. Well, listen, that’s enough in the end.”

When asked, Peskov denied that Russia’s decision to allow the deal to lapse was related to Ukraine’s claimed strike on the bridge connecting mainland Russia to occupied Crimea on Monday. “These are absolutely unrelated events,” he said.

Moscow had threatened to pull out of the deal on previous occasions. The pact was on the brink of breaking down in late October and early November 2022 when Russia suspended its participation over drone attacks on the city of Sevastopol. However, Moscow decided to reverse course following mediation in those instances.

Western condemnation

Western officials were quick to condemn Russia’s decision to lapse the deal.

“It is utterly immoral that Russia continues to weaponise food,” Dutch Foreign Minister Wopke Hoekstra said on Twitter. “It is disappointing that #Russia obstructs the extension of the Black Sea Grain Initiative. Extending the deal is important to prevent food prices from rising and to avoid market destabilisation.”

Ursula von der Leyen, president of the European Union Commission, said that she “strongly” condemned Russia’s withdrawal, calling it a “cynical move to terminate the Black Sea Grain Initiative, despite UN & Türkiye’s efforts.”

The deal had caused some tensions in Europe, after the European Union moved to lift all duties on grain from Ukraine via land, to facilitate exports.

Bulgarian Agriculture Minister Yavor Gechev said earlier this year that “Bulgaria is in solidarity with Ukraine, but a local glut is being created on the agricultural market, because instead of export corridors our countries are becoming warehouses.”

To quell the unrest, the EU subsequently adopted a temporary measure that bans wheat, maize, rapeseed and sunflower seed originating in Ukraine from being exported to Bulgaria, Hungary, Poland, Romania and Slovakia – a move that was opposed by Ukrainian President Volodymyr Zelensky.

<<<



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[gfp927z]

>> LAND <<

Not sure what's going on with LAND, but huge-mega volume last Friday.

With the metals, GLD and SLV were both near oversold last week, based on the RSIs (low 30s). So I figure it might be a decent time to add/accumulate some for the longer term.

With the agro plays WEAT and DBA, they both reached overbought with RSIs at mid 70s, so looks like it could be consolidation time. DBA already is, but the WEAT chart looks like it wants to reach the 200 MA first, so will see what happens :o) Lots of wildcard factors when it comes to the agro commodities..




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[wow_happens28]

My plays start our as trades. If they don't work out, I'm gone quickly. I should make some money on LAND, DBA, and WEAT already, even if a sharp pullback comes along. CDE and NEM only about even. I might buy a lotto stock tomorrow, SANW, S&W Seed Co. I can draw top and bottom almost parallel channel lines and it is almost on the upsloping bottom channel. Fundies and not super, but a "seed" company might get a little play off the the grains rising. I hope to get in at $1.15 or below. No buyout rumors, but with food an issue, it could get an offer.

"Bar" needs a good laugh.

Good Night

[gfp927z]

Wheat has the added factor of the Ukraine / Russia war disruptions, so an extra layer of complexity when compared to other grains and agro products.

But I have very little experience with commodities. For my model portfolio I briefly considered DBA, but went with MOO instead, and some of the equipment stocks like Deere. Buffett says to stick to one's core competency, and agro futures is a highly specialized area.

Chart-wise, WEAT has bounced, but longer term the it might be vulnerable to eventually return to test the 2019-20 lows. Just a guess though, only based on the overall chart..

With agro futures, the film 'Trading Places' comes to mind, where they get the forecast report for the orange juice market before it becomes public. Without some info like that, I probably wouldn't venture into the area. But you certainly nailed the bottom and called the recent bounce, so maybe you have 'the knack' :o) Still, better to just use 'play money'.



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[wow_happens28]

gfp, I know you looked at the charts and corn and soy have our performed $WEAT. Time to get caught up?

https://finance.yahoo.com/quote/WEAT/chart?p=WEAT#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-

https://finance.yahoo.com/quote/WEAT/chart?p=WEAT#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-

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>>> Is It Time to Invest in Wheat ETF (WEAT)?


Zacks

Sanghamitra Saha

June 12, 2023


https://finance.yahoo.com/news/time-invest-wheat-etf-weat-170000918.html


The recent surge in wheat prices has caught the attention of investors looking for potential opportunities in the commodities market. The Teucrium Wheat ETF WEAT gained about 2% on Jun 8, 2023, reflecting the growing market interest in this agricultural commodity.

Wheat Production Areas and Optimal Weather Conditions

To make informed investment decisions regarding wheat ETFs, it's crucial to understand the major wheat-producing areas and the weather conditions favorable for wheat production. The top wheat-producing countries include Russia, Ukraine, the United States, India, and Canada.

Investors should note that wheat thrives in temperate climates with adequate moisture during critical growth stages. The ideal weather conditions for wheat cultivation include cool temperatures during germination and early growth, followed by warmer temperatures during grain fill. Sufficient rainfall or access to irrigation is also crucial to support healthy wheat growth.

In this article, we will explore the factors driving the rise in wheat prices and analyze whether it's a good time to buy a wheat ETF.

Collapse of the Kakhovka Dam

One of the primary factors contributing to the recent increase in wheat prices is the collapse of the Kakhovka dam and hydroelectric power station in Ukraine. This unfortunate event occurred in a region of the Dnieper River under Russian control, raising concerns about Ukraine's ability to access affordable supplies of wheat.

Ukraine is a major exporter of wheat, barley, corn, and sunflower oil, with a significant portion of its produce being shipped to developing nations in Africa, the Middle East, and parts of Asia. The disruption in the supply chain has renewed market fears about the stability of Ukraine's food exports, leading to a spike in global wheat prices.

Drought Conditions in the Midwest

Another factor impacting wheat prices is the prevailing drought conditions in the Midwest, particularly in Kansas, which happens to be a significant wheat-producing region. While the market hasn't shown significant concern about the drought yet, if the dry spell persists, it could have a severe impact on the wheat crop supply. Drought can lead to lower yields and poorer quality of wheat, potentially driving up prices further.

The underlying wheat futures looks to reflect the daily changes of a weighted average of the closing prices for 3 futures contracts for wheat that are traded on the CBOT: the second-to-expire contract, the third-to-expire contract and the contract expiring in the Dec. following the expiration month of the third-to-expire contract. The fund charges 22 bps in fees.

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>>> Gladstone Land Reports on China’s Plan to Buy More U.S. Grains and Offers Additional Information on its External Structure


GlobalNewswire

October 14, 2019

Gladstone Land Corporation


https://www.globenewswire.com/news-release/2019/10/14/1929209/0/en/Gladstone-Land-Reports-on-China-s-Plan-to-Buy-More-U-S-Grains-and-Offers-Additional-Information-on-its-External-Structure.html


MCLEAN, Va., Oct. 14, 2019 (GLOBE NEWSWIRE) -- Gladstone Land Corporation (Nasdaq: LAND) (“Gladstone Land” or the “Fund”) reflects on recent reports of China’s plan to buy more grains and clarifies certain aspects of its external fee structure.

The president of the United States announced on Friday that China has agreed to buy “$40 to $50 billion worth of agricultural products” from U.S. farmers. This new agreement is expected to include provisions for certain grains, such as soybeans, corn, and wheat, in addition to other agricultural products.

David Gladstone, President and CEO of Gladstone Land, noted: “We are hopeful that this forthcoming new agreement will make the Midwest growers stronger. While we do not expect China to pay more than market price for these agricultural products, having a large buyer in the U.S. market should lift the sales of many of the crops grown by Midwest farmers and perhaps bring better profitability to the region as a whole. Prior to China moving away from buying U.S. grains, the main problem was an oversupply of grains grown around the world, causing prices to be depressed. Gladstone Land owns over $835 million of farmland; however, less than 5% of our revenues are derived from farms growing these grain crops. This new agreement with China may provide the buying power to allow grain farmers to become profitable enough so that we can explore acquiring additional farmland in the Midwest. However, right now, we are in a wait-and-see position until we can better understand the impact of this new agreement. Many of the farms we own in the Midwest grow organic potatoes, edible beans, and a few other non-grain crops.”

Gladstone Land also offered additional information on the structure of the fees it pays to Gladstone Management Corporation (its “Adviser”) and Gladstone Administration, LLC (its “Administrator”).

“Another subject we want to offer our shareholders additional information on is related to the fees paid to our external Adviser and Administrator, which manage and operate the Fund. To date, the year ending December 31, 2019, has been a stellar period for us, and it is likely to be our best year ever in terms of growth. As a result, we have added certain personnel to manage the Fund’s growing portfolio of farmland and to help the Fund continue to grow. We currently own over 100 farms worth over $835 million. The Adviser is not paid based on the amount of assets owned by the Fund; rather, a base management fee is calculated only on the net book value of the Fund’s common equity, which base excludes all preferred equity. Frankly, the amount of the base management fee historically paid by the Fund to its Adviser has not been enough to cover all of the costs required to manage all of the Fund’s farms. Not only do the employees of the Adviser identify new farms to buy, conduct due diligence on them, and negotiate their acquisitions, but they are also responsible for the management and oversight of the farms subsequent to their acquisition. Such responsibilities include negotiating lease renewals, overseeing capital improvements, such as drilling new wells, and regular site visits to ensure that the farms are being managed and maintained in an acceptable manner. In addition to covering the salaries of these employees, the base management fee paid to the Adviser is also used for certain of the Adviser’s overhead costs incurred in connection with four satellite offices, as well as the Fund’s headquarters, such as office rent, information technology services, software license expenses, and various other office expenses. For the 12 months ended June 30, 2019, the Adviser incurred a loss of approximately $630,000 in its market segment of operating this Fund, with this loss being covered by the Adviser.

“The Administrative fee paid by the Fund covers the salaries of certain administrative personnel, as well as their portion of the same overhead costs noted above. These personnel include a full accounting team (including a CFO) solely dedicated to the Fund, and certain shared personnel, including in-house attorneys, valuation and compliance officers, and their respective staffs. The Administrator does not earn a profit on the administrative fee paid by the Fund, which is by design.

“It is important to note that the Adviser has always rebated the full portion of the base management fee that was attributable to the preferred stock back to the Fund. Further, as a result of an amendment to the agreement with the Adviser entered into in July 2019, the fee paid to the Adviser will no longer include any preferred stock in the calculation. In addition, the Adviser has also frequently credited all or a portion of other fees, including the incentive fee and the capital gains fee, back to the Fund for the benefit of the Fund’s common shareholders. Management of Gladstone Land currently owns over 15% of its common stock and continues to be committed to its common shareholders.

“Every year, the board of Gladstone Land reviews the agreement with its Adviser and the compensation of its management and compares these figures to a compensation survey published by the National Association of Real Estate Investment Trusts, as well as a public peer set. During the 12 months ended June 30, 2019, the aggregate fees paid by the Fund to its Adviser and Administrator to operate and manage the Fund equated to less than 0.4% of the total value of the Fund’s assets. Given the performance of the Fund, and when compared to published compensation surveys and other peers, management believes these fee amounts to be fair and reasonable.”

About Gladstone Land Corporation:

Gladstone Land is a publicly traded real estate investment trust that owns farmland and farm-related properties located in major agricultural markets across the U.S. and leases its properties to unrelated third-party farmers. The Company reports the fair value of its farms quarterly based on values from independent farmland appraisers. The Company currently owns approximately 85,000 acres in 10 different states, valued at approximately $836 million. The farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, figs, olives, pistachios, and other orchards, as well as groves of blueberries and vineyards, which are generally planted every 10 to 20-plus years and harvested annually. The Company may also acquire facilities related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. The Company pays monthly distributions to stockholders and has paid 80 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common stock distributions 16 times over the prior 57 months, and the current per-share distribution on its common stock is $0.0446 per month, or $0.5352 per year. Additional information, including detailed information about each of the Company’s farms, can be found at www.GladstoneFarms.com.

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DBA - >>> ETF Spotlight: Diving Into Invesco’s Agriculture Fund


ETF.com

by Andrew Hecht

September 2, 2022


https://finance.yahoo.com/news/etf-spotlight-diving-invesco-agriculture-080000629.html


While corn, wheat and other agricultural commodities feed populations, they’re also used as pieces on the geopolitical chessboard.

Russia’s invasion of Ukraine has created global grain shortages and pushed prices higher as Russia targets Ukraine’s agriculture and shipping sectors. For example, soft red winter wheat reached an all-time high this year.

The Invesco DB Agriculture Fund (DBA) holds a portfolio of agricultural futures contracts with a significant weighting in soybeans, corn, and wheat. In late August, more than 40% of the ETF’s holdings were invested in the grain and oilseed futures markets.

The odds favor high agricultural prices over the coming months and into next year as the 2022 harvest season begins in the Northern Hemisphere. DBA could be an excellent addition to portfolios for market participants looking for exposure to agricultural markets.

War in Europe’s Breadbasket

When Russia invaded Ukraine in February, the overwhelming force led many to believe the war would end quickly. Russia was wrong in its belief that Ukrainians would welcome the army, and the fighting continues as Ukraine refuses to capitulate.

With Russia and Ukraine serving as Europe’s breadbaskets, grain and oilseed prices have continued to soar.

The above chart highlights soft red winter wheat’s rise to an all-time peak of $14.2525 per bushel in March. At the $8.20 level on Aug. 29, CBOT wheat remains at the highest price since 2012.

The above corn futures chart shows the rise to $8.27 per bushel in April, only 16.75 cents shy of the 2012 record high. At over $6.80 per bushel in late August, corn futures stand at the highest price since 2013.

Fertile Acreage Into Minefields

The war has turned fertile acreage into minefields. Russia is the world’s biggest exporter of wheat and the sixth-biggest corn exporter. Ukraine is the fourth-leading corn exporter, and Russia is sixth. The Black Sea ports have become a battlefield, preventing the normal flow of grains to worldwide consumers.

A prolonged war leaves open the possibility of worldwide shortages, famine and continued inflation. As the world population nears 8 billion, supplies will struggle to keep pace with demand.

And let’s not forget soaring fertilizer prices.

DBA Is Liquid, Diversified

While the Fed and other central banks worldwide have addressed inflation with higher interest rates, food supplies are a supply-side economic issue. Monetary policy can influence the demand side of the economy, but it has little impact on supply-side issues in the food and energy sectors.

The most direct route for a risk position in agricultural commodities is via the futures and futures options traded on the CME’s CBOT division and other worldwide exchanges. DBA provides an alternative to the futures arena as it owns futures contracts in the leading agricultural commodities. At the $20.79 per share level, DBA had over $1.59 billion in assets under management. The ETF trades an average of over 1.4 million shares daily and charges a 0.93% management fee.

The Trend Is Your Friend

After reaching a pandemic-inspired low of $13.15 per share in June 2020, the trend in DBA has been higher.

The chart above illustrates the path of higher lows and higher highs that took DBA to $23.01 per share in June 2022, a 75% rise from the June 2020 low. At the $20.79 level on Aug. 29, DBA was sitting not far below the recent high.

The trend is always your best friend in markets, and remains higher in DBA. If the war continues, Europe’s breadbasket will not yield the corn and wheat necessary to fulfill worldwide requirements.

Moreover, corn and soybeans are critical inputs in biofuel. Corn is the primary ingredient in U.S. ethanol, and soybeans are required for biodiesel production. With crude oil sitting around the $100 per barrel level and natural gas over $9 per MMBtu in the U.S. and higher in Europe, the highest energy prices in years put additional upside pressure on agricultural commodity prices. DBA could be a perfect addition for ETF investors looking to add agricultural exposure to their portfolios.

Bull markets rarely move in straight lines, and corrections can be substantial. Buying DBA on price dips could be the optimal approach for ETF investors.

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>>> Deere Hoists Guidance After Earnings Beat. Why DE Stock Fell.

Deere earnings topped views on strong farm equipment sales


Investor's Business Daily

APARNA NARAYANAN

05/19/2023


https://www.investors.com/news/deere-earnings-q2-de-stock-caterpillar-outlook/


Deere (DE) guided higher for fiscal 2023 early Friday, after easily topping earnings estimates for its second quarter on healthy equipment demand. DE stock jumped to seize a key level, then reversed lower.

On an earnings call, Deere management indicated that Q2 results benefited from a pull-forward of production from the latter half of 2023.

That led to concerns about a sequential sales decline in the current third quarter, with Q2 marking the year's production peak, analysts said.

Deere may have "to manage inventory levels with lower production, so as to exit the year in good shape given the increasing end market concerns due to lower crop prices," William Blair analyst Lawrence De Maria told IBD in an email.

Tractor maker Deere is seen as a bellwether for the farm economy. It also makes heavy machinery for the construction and forestry markets.

Deere Earnings

Estimates: For the quarter ended April 30, Deere earnings were forecast to grow 26% to $8.58 per share, according to FactSet consensus estimates. Total revenue was seen rising nearly 20% vs. a year earlier to $15.993 billion.

Results: Deere earnings jumped 42% to $9.65 a share, though that's a slowdown from 124% in the first quarter. Revenue swelled 30% to $17.39 billion, above expectations, but still the second straight quarter of slowing sales growth.

Production and precision agriculture sales leapt 53%. Smaller agriculture and turf sales grew 16%. Construction and forestry sales rose 23%.

"Deere continues to benefit from favorable market conditions and an improving operating environment," CEO John May said in the Deere earnings release.

"Though supply-chain constraints continue to present a challenge, we are seeing further improvement," May added.

Outlook: Deere now sees full-year net income of $9.25 billion-$9.50 billion, vs. its prior target of $8.75 billion-$9.25 billion. Analysts had forecast net income of $9.06 billion, FactSet shows.

DE Stock Reverses Lower

Shares of Deere closed down 1.9% to 363.55 on the stock market today, falling back below the 50-day moving average. DE stock had gapped up as much as 6% to 393 in the Friday morning session, clearing the 50-day for the first time since early April.

Deere stock peaked last November and has been trending lower, with the 10-week moving average now below the 40-week line, the MarketSmith chart shows.

Caterpillar (CAT), CNH Industrial (CNHI) and United Rentals (URI) are also heading lower and below key levels. CAT stock was almost unchanged, at 214.79, Friday. CNHI stock lost 0.1% while URI stock rose 1.3%.

'Prudent' Move On Production

Deere management "is prudently limiting production to ensure inventories at the dealer level remain lean," Edward Jones analyst Matt Arnold told IBD Friday.

That "should set up another solid year in 2024," he added.

The move comes with the outlook for Deere's end markets under scrutiny.

The World Bank projects agricultural commodity prices will drop 7% this year and will likely fall again in 2024, the Texas Farm Bureau said on May 18.

Prices for all types of farm equipment soared in recent years for reasons very similar to those that drove automobile prices to record levels. As supply chain issues and demand begin to balance, lower farm commodity prices could place additional pressure on farm equipment sales.

In April, construction giant Caterpillar gave a lackluster outlook for equipment sales as well. United Rentals, which rents out scissor lifts and a range of heavy equipment, turned in a mixed report the same month.

Year to date, Deere stock is down around 15%. It pays a 1.3% dividend yield.

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>> LAND <<

It could get a near term bounce, but chart-wise it might still be too early to call this the definitive bottom. Just a guess though. Based on the chart, it might finally form a bottom in the 12.5 - 15 support range, but a lot depends on the company's news flow, plus the direction of the broader stock market. I haven't followed the stock much in a year or two, so not sure what's going on with them It was a great ride going up, but sure glad I took the easy profits and ran, lol. I figured it might be a good long term buy/hold, and in theory farmland seems like a great diversification tool, but the stock became a momentum rocket ship, and those can come back down to earth hard.

A similar chart is Generac (GNRC), the portable generator company. That looks more convincing that a bottom may be in. It was another great rocket ship a few years ago. I've been tempted to get back in, and the chart finally looks like the bottom 'might' be in.

I follow a bunch of these turnaround type stocks on the 'Contrarian Value' board (link below), though a lot of these had smaller declines and have already rebounded, and might now be ready to consolidate before resuming their recovery.

Contrarian Value -

https://investorshub.advfn.com/Contrarian-Value-Ideas-30183


Fwiw, after having dozens of individual stocks ($500 each), not long ago I reduced the stock allocation in half, from 30% range to 15%, and moved it into the S+P 500 in case a 'fast exit' is required later in the year. I'm figuring we get a decent rally after the debt ceiling issue is resolved (though maybe a drop before then), and then a broader summer rally. But the Fall still looks uncertain, so will have to play it by ear. I'm trying to keep 10-15% invested long term (Core), and then have a 5, 10, or 15% portion as 'flexible', but the strategy is still a 'work in progress'. The temptation is to just sit and collect the safe 5% from $ markets and T-Bills, but the stock market won't stay in limbo forever :o)




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$LAND double bottom?

https://stockcharts.com/h-sc/ui?s=LAND&p=D&yr=5&mn=0&dy=0&id=p80326600778

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Cayman Islands, LOL. Hunter? LOL, we'll neve know.

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>>> How Much U.S. Farmland Does China Really Own? More Than Bill Gates—And Less Than 17 Other Countries


Forbes

by Emily Washburn

Mar 1, 2023


https://www.forbes.com/sites/emilywashburn/2023/03/01/how-much-us-farmland-does-china-really-own-more-than-bill-gates-and-less-than-17-other-countries/?sh=1f4fed6b421f


TOPLINE Chinese purchases of U.S agricultural land sparked concern in Congress among a bipartisan group of lawmakers—but 18 other countries own more American agricultural acres than China.

KEY FACTS

The Department of Agriculture requires foreign entities who buy U.S. agricultural land to file a report within 90 days disclosing what they bought.

Citing staff shortages, the Department of Agriculture didn’t penalize foreign parties for violating reporting rules from 2015 to 2018, prompting 28 lawmakers to criticize the department’s “complete lack of accountability and oversight” Monday in a letter obtained by the Wall Street Journal.

Two bills introduced in the House of Representatives and the Senate argue foreign influence on American agricultural land could affect America’s economy, food supply, and national security.

Concern about Chinese purchases of U.S. agricultural land increased in late January when the China-based Fufeng Group Ltd. was prevented from building a cornmill on land close to a North Dakota Air Force base after officials called it a security risk.

Key Background

China owns roughly 384,000 acres of U.S. agricultural land, according to a 2021 report from the Department of Agriculture. Of that, 195,000 acres, worth almost $2 billion when purchased, are owned by 85 Chinese investors, which could be individuals, companies or the government. The other 189,000 acres were worth $235 million when purchased and are owned by 62 U.S. corporations with Chinese shareholders. Chinese agricultural land ownership only increased about 550 acres from 2015 to 2019. Then ownership jumped 30% from 2019 to 2020, from some 247,000 acres to roughly 352,000. U.S. companies with Chinese shareholders more than doubled their acreage that year, accounting for 102,000 acres of the growth. China acquired another 32,000 U.S. agricultural acres in 2021—not as much as they scooped up in 2020, but 98% higher than their combined growth between 2015 and 2019.

Surprising Fact

Of the 109 countries that own U.S. agricultural land, China ranks No. 18, far behind No. 1 Canada (12.8 million acres) and even and the Cayman Islands (672,000).

Countries Who Own The Most Acres U.S. Agricultural Land

Canada (12,845,000 acres)
Netherlands (4,875,000)
Italy (2,703,000)
United Kingdom (2,538,000)
Germany (2,269,000)
Portugal (1,483,000)
France (1,316,000)
Denmark (856,000)
Luxembourg (802,000)
Ireland (760,000)


Bill Gates owns almost as much U.S. agricultural land as China at 248,000 acres, according to The Land Report. Though the magazine named him the largest private farmland owner in January 2021, the Microsoft founder came under fire in early 2022 when he was briefly barred from purchasing 2,100 acres of North Dakota farmland. Conspiracy theorists suggested Gates was buying up millions of acres of U.S. farmland for nefarious reasons, according to the fact-checking service Snopes, with some claiming that Gates owned 80% of all U.S. farmland. Gates continues to deny any plot, telling Reddit users in January that he owns less than one four-thousandths of U.S. farmland and invests in farms to improve their production and create jobs.

Surprising Fact

Gates is No. 41 on The Land Report’s 2022 list of Americans who own the most land. Amazon founder Jeff Bezos comes in at No. 24 with 420,000 acres, which forms the site of his suborbital spaceflight company, Blue Origin.

What to Watch For

The FARM—Foreign Adversary Risk Management—act, introduced in the House of Representatives and the Senate on January 25, would trigger a Department of Agriculture and Government Accountability Office investigation into foreign influence on America’s agriculture industry. The House Bill is being reviewed by the Committee on Financial Services and the Committee on Agriculture. The Senate Bill is being reviewed by the Committee on Banking, Housing and Urban Affairs.

Further Reading

Weak Oversight of Foreign Farmland Deals Sparks Concern Amid China Purchases (WSJ)

North Dakota Turns Against Chinese Corn Mill Project (WSJ)

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Alamo Group - >>> These three businesses can carry on growing even in the face of a mild recession.


https://www.fool.com/investing/2023/03/28/these-3-growth-stocks-are-screaming-buys-right-now/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Given the uncertainty in the markets and the economy now, it makes sense to start looking at some under-the-radar stocks with growth prospects that don't rely strongly on the economy.

That's the case for buying stocks like infrastructure and vegetation management equipment company Alamo Group (ALG), aviation services company AAR (AIR -1.21%), and electrical products company nVent Electric (NVT 0.19%). All three have solid growth prospects that should tide them through a difficult economy. Here's why.

1. Alamo Group: Don't forget it

It's no secret that the industrial sector has battled surging prices in raw materials and logistics over the last few years, and Alamo Group is not immune to these factors. Moreover, supply chain disruptions and labor shortages have hurt Alamo's ability to deliver products.

Should you invest $1,000 in Alamo Group right now?

For reference, Alamo operates in two divisions. Its vegetation management business supplies mowers and cutters to governmental, agricultural, and commercial turf markets. The industrial equipment division provides infrastructure-maintenance equipment (for snow- and ice-clearing, road sweepers, and the like). As such, Alamo is a play on the need to maintain infrastructure and public spaces.

The key to the investment case for the stock rests on the idea that its end-market demand is likely to hold up relatively well in an economic slowdown. Meanwhile, its cost and supply chain pressures will ease if a slowing economy alleviates stress on the supply chain.

That argument is strengthened by Alamo Group's $1 billion backlog as of the end of the year -- a figure equivalent to 63% of the $1.6 billion in revenue that Wall Street analysts expect for 2023.

Meanwhile, a combination of mid-single-digit sales growth and margin expansion leads Wall Street to expect double-digit earnings growth for the next few years. Trading at 17.6 times earnings estimates for 2023, Alamo Group looks to be an excellent value.

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Unfortunately the list supports the name of Dew's board, "The Rising Influence of Rising Affluence". The big money is taking over many of those points.

RIBT, I believe it will be sold. I'd be thrilled with $3, $2 OK, below $2...... oh well. The last three days some nice buys and raised bids getting their bids. It would be crazy to make big buys before a buyout, SEC might wonder. My guess it is close and a few know.. If so, I might get $2. I still hope for a miracle. I am not buying, BK still possible, like chapter 11. RIBT had a Chapter 11 like 10/12 years ago, same thing happens here. here and the stock goes to .25, but hope for better after that.

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Nice recovery for RIBT :o) Looks like $1 is next target, and then the 50 MA at 1.08.

Thanks for that '13 Trends' article. A good summary of what is driving the food-agro sector these days.

Btw, that other microcap I mentioned, Winmark (WINA), keeps climbing like the energizer bunny.. Not an agro-food play though. I only have 2 shares (lol) since my individual stock positions are limited to $500 range, but still fun to watch :o)

On the agro side, Deere seems like a solid long term holding (I think Dew owns some), and Alamo Group (ALG) is another good one on the agro hardware side. ALG is still a fairly small cap (2 bil mkt cap), and also targets the broader industrial market -


>>> Alamo Group Inc. (ALG) designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide. It operates through two segments, Vegetation Management and Industrial Equipment. Its Vegetation Management Division segment offers hydraulically-powered and tractor - and off-road chassis mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts. This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, and cutting blades. The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators. This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas. <<<



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Thirteen trends driving change in food and agriculture production

https://www.foodbusinessnews.net/articles/23514-thirteen-trends-driving-change-in-food-and-agriculture-production

LA QUINTA, CALIF. — The buying and selling of farm equipment is often seen as an indicator of the overall health of the agricultural economy, and this type of data may provide insight into industry leanings. The Futures Council for the Association of Equipment Manufacturers (AEM) developed a report using this data and other research to identify the 13 trends in agriculture that are expected to greatly impact the ag sector and how food is produced in the future. Curt Blades, senior vice president for industry sectors and product leadership at AEM, recently shared these trends at the National Grain and Feed Association (NGFA) convention in La Quinta, Calif.

“We don’t have to agree with them, but we certainly need to be paying attention to them,” Mr. Blades said, noting some of the trends will have a dramatic impact on the grain and feed industry while others were more adjacent to the industry but were still important to consider.

1. Produce more with less environmental impact
“The population is expected to grow by 2.2 billion people by 2050, but at the same time, there is an increasing amount of pressure to lower our environmental impact,” Mr. Blades said. He pointed to advancing genetics, intentional stewardship and improving mechanics through precision agriculture as key ways to expand production without increasing the environmental load.

2. Optimization of water use
“We’ve got a water problem in the world and certainly in the United States,” Mr. Blades said, adding that agriculture often bears the brunt of the blame for water shortage issues.

“We’ve got some work to do in terms of how we monitor and how we irrigate,” he said.

3. Increased global demand for protein
While discussions about lab-grown meat and plant-based products have gained solid market traction, Mr. Blades said there was no indication demand for animal protein would decrease. In fact, it was projected to double by 2050, he said.

“It’s going to look a little different,” he acknowledged, adding that other products will continue to play an important role in the demand for protein. “But despite all the other headlines you’re going to read, there’s no bit of research that points to the fact that animal protein is not expected to continue on the upward swing for the foreseeable future.”

4. Shorter food supply chain
“It just makes a whole lot more sense to raise your lettuce close to where you’re consuming it because, otherwise, you’re just shipping water,” Mr. Blades said, recognizing how vertical farming initiatives and greenhouse growing systems have fundamentally changed the farming landscape, especially for leafy green vegetables. He also said many lessons were learned from the production successes of the marijuana industry.

“That technology is easily transferable into fruits and vegetables, probably not so much row crops, but there is a lot of interesting things we can learn (from the underground marijuana industry) that can absolutely translate into the food supply chain being dramatically different tomorrow than it is today,” he said.

5. Geographic shifts in production
For different reasons, both genetic advances and climate changes have allowed crops to grow in places they couldn’t grow previously, but the changes are opening possibilities for farmers to diversify.

“It’s a simple reality that the Corn Belt is moving further and further north, and the grain industry needs to prepare for this geographic shift in crop production,” Mr. Blades said.

6. Advanced food traceability helps maintain consumer trust
“If you talk to anyone that is close to consumers, they are demanding traceability and they’re voting with their wallets,” Mr. Blades said, affirming that one of traceability’s main purposes is to improve consumer trust, which has been marred in the past by concerns about food safety and food security. He encouraged businesses to be prepared to provide that traceability if they want to participate in future markets.

7. Farmers adjust in response to emission regulation
Mr. Blades confirmed there was plenty of pressure within the agricultural industry to reduce its carbon footprint, which may lead to targeted investments in equipment and vehicle upgrades to more sustainable alternatives, which might pressure bottom lines.

8. Efforts to decarbonize create adjacent economies
Mr. Blades said the US Department of Agriculture is actively pursuing opportunities to establish multiple income streams at singular farm operations by supporting the development of adjacent industries, especially for carbon markets where farmers could generate and sell carbon credits to private sector buyers.

“We don’t know how it’s going to end, but we certainly know there are going to be industries adjacent to the grain industry that will have dramatic impact on what’s happening in our world today, and we just have to be prepared for it,” he said.

9. Connectivity gap narrows
“All of the promise that we have within precision agriculture relies on constant connectivity of the internet,” Mr. Blades said.

He asked convention attendees to think about the fundamental impact smartphones have had on people’s lives, but many farmers are restricted from capitalizing on this innovative technology because the connectivity has not been available. According to the AEM report, only 25% of farms in the United States currently use connected equipment or devices to access data.

“I think we can only imagine the computing power that comes out of these tractors that’s currently contained inside that tractor and then all of a sudden it’s connected to the cloud, and every other tractor is connected to the cloud,” he said. “It’s amazing what’s going to come out of that.”

10. Artificial intelligence enables insight-driven farming
Mr. Blades said AI was making significant strides and was expected to influence the agricultural industry from both a productivity and sustainability standpoint. Some examples cited in the AEM report include real-time crop condition analysis, maintenance prediction systems and auto-harvesting robots.

11. Resources pour into cybersecurity
“If you haven’t been the victim of a cybersecurity attack yet, well then you’re going to be, so you need to get ready for it,” Mr. Blades said, encouraging attendees to tighten up their cyber security efforts as much as possible since the majority of data breaches result from weak links that often are overlooked. Adherence to security standards will become increasingly vital as farm operations transition to digital platforms.

12. Farm ownership models change
“We used to always joke that the average landowner in Iowa is an 82-year-old widow,” Mr. Blades said, adding, “I don’t know if that’s exactly correct, but it’s probably not too terribly far from the truth.”

For the first time in generations, farm businesses were increasingly being separated from the land, allowing non-operator landlords, typically retired farmers who were unable to successfully pass their operations to subsequent generations, to claim ownership while outside parties can invest in and produce on the land.

13. New business models emerge
“You don’t have to look very far to see the money that is being poured into agriculture,” Mr. Blades said.
Corporations with previously limited or no association to agriculture have begun investing in the sector at an accelerating pace and will likely influence, and eventually evolve, current systems.

“At some point that is going to change everything we’re used to within this industry, and new business models are going to emerge, and I don’t know if that’s a positive or a negative, but it’s certainly an interesting thing for us to pay attention to,” he said.

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>>> AGCO Corporation (AGCO) manufactures and distributes agricultural equipment and related replacement parts worldwide. It offers horsepower tractors for row crop production, soil cultivation, planting, land leveling, seeding, and commercial hay operations; utility tractors for small- and medium-sized farms, as well as for dairy, livestock, orchards, and vineyards; and compact tractors for small farms, specialty agricultural industries, landscaping, equestrian, and residential uses.

The company also provides grain storage bins and related drying and handling equipment systems; seed-processing systems; swine and poultry feed storage and delivery; ventilation and watering systems; and egg production systems and broiler production equipment.

In addition, it offers round and rectangular balers, loader wagons, self-propelled windrowers, forage harvesters, disc mowers, spreaders, rakes, tedders, and mower conditioners for harvesting and packaging vegetative feeds used in the beef cattle, dairy, horse, and renewable fuel industries.

Further, the company provides implements, including disc harrows leveling seed beds and mixing chemicals with the soils; heavy tillage to break up soil and mix crop residue into topsoil; field cultivators that prepare smooth seed bed and destroy weeds; drills for small grain seeding; planters and other planting equipment; and loaders. Additionally, it offers combines for harvesting grain crops, such as corn, wheat, soybeans, and rice; and application equipment, such as self-propelled, three- and four-wheeled vehicles, and related equipment for liquid and dry fertilizers and crop protection chemicals, and for after crops emerge from the ground, as well as produces diesel engines, gears, and generating sets. The company markets its products under the Challenger, Fendt, GSI, Massey Ferguson, and Valtra brands through a network of independent dealers and distributors. The company was founded in 1990 and is headquartered in Duluth, Georgia.

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>>> Deere Stock Growing Like A Weed; EPS Soared 124% Last Quarter


INVESTOR'S BUSINESS DAILY

JAMES DETAR

03/22/2023


https://www.investors.com/news/deere-earns-ibd-rating-upgrade/?src=A00220


Agricultural equipment giant Deere (DE) is crushing it, with a 124% surge in profits last quarter on a hefty gain in sales. Its stock formed a cup-with-handle pattern recently and it may just be waiting for the market turbulence to stop before possibly breaking out. On Wednesday, the Relative Strength (RS) Rating for Deere stock climbed to 72, up from 67.

Deere Stock Key Ratings, Fundamentals Shine

The raised 72 RS Rating means that Deere stock is outperforming 72% of all stocks on price performance. It's a good but not yet great rating. CAN SLIM investors look for stocks with an 80 or higher RS rating when searching for the best stocks to buy and watch. But check out its top-notch fundamentals and other ratings.

Last quarter earnings for the watchlist candidate popped 124% year over year to $6.55 per share, on a 32% rise in revenue to $12.7 billion. The prior three quarters its EPS grew 20%, 16% and then 81%. Sales growth during that period accelerated from 11% to 22% and then 37%.

Just as impressive is the Moline, Ill.-based company's technical strength. It boasts a best-possible 99 Earnings Per Share Rating, putting it in the top 1% of all companies for recent and long-term profit growth. It also sports a 95 Composite Rating and an A SMR Rating (sales+profit margins+return on equity) on an A to E scale with A superb and E dismal.

Big Money Investors Still Cautious

One yellow flag to watch is the E Accumulation/Distribution Rating, a gauge of buying by big money investors like ETFs and mutual funds. The E rating for Deere stock shows that institutional investors will need more convincing before they get on board with Deere. Look for that rating to improve to a C or better.

Deere stock was down fractionally Wednesday afternoon at about 400. It's trying to complete a flat base with a 448.50 buy point. See if it can break out in volume at least 40% higher than normal.

Deere earns the No. 2 rank among its peers in the Machinery-Farm industry group. AGCO (AGCO) is No. 1 and Alamo Group (ALG) is No. 3 in the group. The group itself is a middling No. 84 on IBD's list of 197 industries.

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>>> ALAMO GROUP ANNOUNCES RECORD 2022 FOURTH QUARTER AND YEAR END RESULTS


Yahoo Finance

PR Newswire

February 23, 2023


https://finance.yahoo.com/news/alamo-group-announces-record-2022-211500924.html


SEGUIN, Texas, Feb. 23, 2023 /PRNewswire/ -- Alamo Group Inc. (NYSE: ALG) today reported results for the fourth quarter and year ended December 31, 2022.

Highlights

Fourth quarter net sales of $386.6 million, up 15%

Fourth quarter operating income of $42.7 million, up 53%

Fourth quarter net income of $29.2 million, or $2.44 per diluted share, up 52%

Full year net sales of $1.5 billion, up 13% year over year

Full year operating income of $148.6 million, up 27%

Full year net income of $101.9 million, up 27%

Full year diluted EPS was $8.54, up 27%

Record EBITDA of $195.9 million, up 21% year over year(1)

Backlog of $1.0 billion, up 26% compared to year-end 2021


Fourth Quarter Results

Fourth quarter 2022 net sales were $386.6 million compared to $337.2 million in the fourth quarter of 2021, an increase of 15%. Gross margin improved in the quarter versus the fourth quarter of 2021 by $14.1 million or 17%. Fourth quarter net income improved 52% to $29.2 million, or $2.44 per diluted share, compared to net income of $19.2 million, or $1.62 per diluted share in the fourth quarter of 2021. The Company's backlog at the end of 2022 was in excess of $1.0 billion, an increase of $205.7 million, or 26%, from the backlog at the end of 2021.

The positive results reported for the quarter were achieved as a result of improved product deliveries, as well as a combination of effective price management, an improvement in manufacturing efficiencies, and disciplined control of operating expenses. These results were achieved despite continued headwinds directly related to supply chain disruptions and skilled labor shortages, as well as the negative impact of currency exchange rates on our consolidated financial results.

Full Year Results

Full year 2022 net sales increased to $1.5 billion, up 13% compared to $1.3 billion for the full year 2021. Net income for the year was $101.9 million, or $8.54 per diluted share, compared to net income of $80.2 million, or $6.75 per diluted share in 2021, a year-over-year improvement of 27%.

Throughout 2022, the Company experienced strong demand for its products with the Company setting records for net sales and earnings in each quarter of the year. The Company's record performance was achieved despite the significant material cost increases, supply chain disruptions and skilled labor shortages that the Company experienced during the year. Our results were also negatively impacted by currency translation as the U.S. dollar strengthened against the currencies of international countries where we operate.

Division Results

Vegetation Management

The Vegetation Management Division's fourth quarter 2022 net sales were $232.5 million, up 14% compared to $204.3 million for the same period in 2021. Full year 2022 net sales in this Division were $937.1 million, compared to $812.7 million for the full year 2021, up 15%. The increase in net sales for both the fourth quarter and the full year was driven by strong customer demand for forestry, tree care, agricultural, and governmental mowing products in both North America and Europe.

The Division's fourth quarter operating income for 2022 was $30.2 million, up 67% compared to $18.1 million for the fourth quarter of 2021. Full year 2022 operating income was $108.5 million versus $78.9 million for the full year 2021, an increase of 37%. The Division benefited from strong sales, improved pricing, and effective control of costs and expenses despite ongoing supply chain disruptions, higher material and inbound freight costs, and labor shortages. Outstanding performance in the Division's North American operations was complemented by strong results during the year in the United Kingdom, France, Brazil, and Australia.

Industrial Equipment

The Industrial Equipment Division's fourth quarter 2022 net sales were $154.1 million, up 16% compared to $132.8 million during the same period in 2021. The increase was primarily attributable to higher sales of snow removal products and, to a lesser extent, other product lines within the Division. Insufficient availability of truck chassis and other industrial components continued to constrain the Division's sales growth during the fourth quarter of 2022.

Full year 2022 net sales were $576.6 million compared to $521.5 million for the full year 2021, an 11% increase. Excavators and vacuum trucks were the primary drivers of the sales increase, but all product lines contributed.

The Division's fourth quarter operating income was $12.5 million, up 28% compared to $9.7 million for the fourth quarter of 2021. Full year 2022 operating income was $40.1 million compared to $38.0 million for the full year 2021, an increase of 5%. The Division was negatively impacted throughout 2022 by supply chain disruptions, constrained chassis deliveries, labor shortages, and higher material and inbound freight costs.

Comments on Results

Jeff Leonard, Alamo Group's President and Chief Executive Officer, commented, "It was gratifying to achieve very solid results in the fourth quarter despite the persistent supply chain, cost inflation, and labor shortage headwinds we experienced throughout the year. Our teams once again worked through these challenges and produced record setting results to cap off the best year for sales and earnings in Company history. I'm very proud of our employees and take this opportunity to offer thanks and special recognition for their dedication, persistence, and ingenuity that largely overcame these obstacles and produced nice results in the fourth quarter and for 2022.

"As they had throughout the year, our markets continued to display strength during the fourth quarter. Governmental agencies at the state, county and municipal levels remained in good fiscal health and continued to invest in upgrading their infrastructure maintenance fleets. Activity in our forestry and tree care segment was also strong and demand from the agricultural sector was good, especially for a fourth quarter. Order bookings in the quarter, while down 2% from prior year, were at a very good level. Bookings in our Industrial Equipment Division were sharply higher, while those in our Vegetation Management Division decreased. We ended 2022 with a backlog in excess of $1.0 billion for the first time which provides us good visibility for the first half of 2023.

"Our supply chain performance also improved modestly relative to the third quarter, although more improvement is needed to support accelerated sales growth over the next several quarters. Truck chassis deliveries remained constrained by allocations from the major OEM's, and although the allocation quantities are slowly increasing, they are not yet keeping pace with our requirements. This has driven the backlog in our Industrial Equipment Division higher, and it may be several more quarters before a balance is achieved. Other supply chain bottlenecks in components such as engines, hydraulics and wiring harnesses are easing and our Vegetation Management Division clearly benefited from this in the fourth quarter. Our labor situation also improved during the quarter, although we continue to have many open positions, particularly in manufacturing.

"Throughout 2022, our teams effectively managed pricing to stay ahead of material cost inflation. During the fourth quarter, we benefited demonstrably from this good price stewardship as our operating margin reached 11%, a record for a fourth quarter and, more importantly, the highest level of the year. Our teams also maintained good expense discipline and total fourth quarter operating expenses declined compared to the prior year.

"The combination of double-digit sales growth, price leverage, improving efficiencies, and spending restraint produced the highest quarterly earnings per share in our history. For the full year 2022, the Company also set new records for both sales and earnings. As we look ahead to the balance of 2023, we continue to have confidence in our team's ability to drive further performance improvements. The continued strength of our markets, combined with the size and quality of our backlog supports that confidence, and we believe the Company is well positioned for future success."

Earnings Conference Call

The Company will host a conference call to discuss fourth quarter and year end 2022 financial results on Friday, February 24, 2023 at 10:00 a.m. ET. Hosting the call will be members of senior management.

Individuals wishing to participate in the conference call should dial 877-407-0789 (domestic) or 201-689-8562 (international). For interested individuals unable to join the call, a replay will be available until Friday, March 03, 2023 by dialing 844-512-2921 (domestic) or 412-317-6671 (internationally), passcode 13734940.

The live broadcast of Alamo Group Inc.'s quarterly conference call will be available online at the Company's website, www.alamo-group.com (under "Investor Relations/Events & and Presentations") on Friday, February 24, 2023, beginning at 10:00 a.m. ET. The online replay will follow shortly after the call ends and will be archived on the Company's website for 60 days.

About Alamo Group

Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for vegetation management, infrastructure maintenance and other applications. Our products include truck and tractor mounted mowing and other vegetation maintenance equipment, street sweepers, snow removal equipment, excavators, vacuum trucks, other industrial equipment, agricultural implements, forestry equipment and related after-market parts and services. The Company, founded in 1969, has approximately 4,200 employees and operates 28 plants in North America, Europe, Australia and Brazil as of December 31, 2022. The corporate offices of Alamo Group Inc. are located in Seguin, Texas.

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>>> Tractor Supply: The leader in a quickly growing niche

https://www.fool.com/investing/2023/03/18/market-plunge-why-im-loading-up-on-these-2-stocks/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Worker burnout following the COVID-19 pandemic has played a major factor in a mass migration away from urban areas and into rural areas over the last few years. A full two-thirds (66%) of Americans polled in a recent survey said that they would consider moving to a rural home or a subdivision if telecommuting is possible.

With over 2,200 stores in the U.S., Tractor Supply (TSCO 1.50%) has been and should continue to be the biggest beneficiary of this trend. This is because with more Americans embracing the rural lifestyle, the demand for the company's products has especially shot up in the last few years.

That explains why analysts believe the company's diluted EPS will grow by 10.1% annually through the next five years. Putting this into perspective, that is slightly above the specialty retail industry average earnings growth outlook of 9.4%.

Tractor Supply's 1.8% dividend yield is a bit higher than the S&P 500 index's yield. And considering that the company's dividend payout ratio will be less than 40% for the current fiscal year, this dividend has tons of room for future growth.

Tractor Supply's forward P/E ratio of 20 is much more than the specialty retail industry average forward P/E ratio of 16. But considering its massive tailwinds and remarkable track record of dividend growth, the stock is worthy of such a premium valuation.

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