Zacks Investment Ideas feature highlights: Potash, CF Industries Holdings, Deere and AGCO - Press Releases
23 Dicembre 2011 - 9:30AM
Zacks
For Immediate Release
Chicago, IL – December 23, 2011 – Today, Zacks Investment Ideas
feature highlights Features: Potash Corporation (
POT), CF Industries Holdings ( CF), Deere
& Company ( DE) and AGCO ( AGCO).
4 Cheap Agriculture Stocks for
2012
After several years of strong earnings growth and skyrocketing
share prices, suddenly the agriculture stocks don't look so
hot.
The sell off began earlier in 2011 and hasn't stopped. As a
result, the fertilizers and the farm equipment manufacturers are
now dirt cheap as investors have fled the sector.
What's going on? Didn't we just hear that the emerging market
middle class is spending more on food and is adopting the western
diet which means higher food prices from here until the end of
time?
Supply and Demand Story Still Intact
Nothing has changed in the supply/demand story. Farmers are
still running full throttle even though 2011 was a record year for
farming income in the United States. The outlook is still very
positive for further growth in 2012.
In the farming equipment category, demand is expected to remain
strong, especially for high horsepower equipment. Farm-machinery
sales are projected to rise between 5% and 10% in 2012.
With the agriculture stocks being beaten down in the last few
months, that means this could be an opportunity to buy into the
agriculture sector at very attractive levels.
The following four companies have solid earnings with some
growth expected in 2012. But they are also extremely cheap, with
forward P/Es well under the S&P 500 average of 12.7.
4 Cheap Agriculture Stocks for 2012
1. Potash Corporation ( POT)
Potash is one of the largest fertilizer companies in the world.
This Zacks #3 Rank (hold) produces about 20% of the world's potash
as well as phosphates and nitrogen.
Forward P/E: 10.9
2011 expected EPS growth: 80%
2012 expected EPS growth: 19%
2. CF Industries Holdings ( CF)
CF Industries is the second largest nitrogen fertilizer maker in
the world. This Zacks #2 Rank (buy) is also the third largest
publicly traded phosphate producer. With a low single digit P/E,
this is the cheapest the stock has been, on a valuation basis,
since the Great Recession.
Forward P/E: 6.1
2011 expected EPS growth: 162%
2012 expected EPS growth: 2%
3. Deere & Company ( DE)
Deere manufactures farm and construction equipment in 30
countries worldwide. This Zacks #2 Rank (buy) has been in business
since 1837. It just posted a record fiscal 2011. It's bullish on
fiscal 2012 as well.
Forward P/E: 9.9
Fiscal 2012 expected EPS growth: 17.2%
Fiscal 2013 expected EPS growth: 6.7%
4. AGCO ( AGCO)
AGCO manufactures agriculture equipment, including tractors,
combines, sprayers and forage equipment through distributors in 140
counties. The CEO recently commented that demand is still strong in
the emerging markets.
Forward P/E: 9.5
Fiscal 2011 expected EPS growth: 88.4%
Fiscal 2013 expected EPS growth: 13.4%
Feeding the World
Diets and food consumption patterns are changing as the global
middle class grows. Yet the agriculture stocks have sold off like
no one is going to be eating tomorrow. With valuations as low as
they are, the agriculture stocks are a good value buy heading into
2012.
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AGCO CORP (AGCO): Free Stock Analysis Report
CF INDUS HLDGS (CF): Free Stock Analysis Report
DEERE & CO (DE): Free Stock Analysis Report
POTASH SASK (POT): Free Stock Analysis Report
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