Agria (GRO) is a sure thing to gain 40% within 40 days. Credit Suisse raised GRO $198mm in a 2007 IPO at $16.50 and today it's only $1.44. Whenever a big investor notices GRO, they assume it's still a Chinese sheep breeding company, and dismiss it without looking further. They are totally unaware its original Chinese business was divested, and GRO is now the largest agriculture company in the world's fastest growing advanced economy.
98% of GRO's revenues now come from businesses outside China. A few years ago, with GRO still sitting on the bulk of its cash from its IPO, they acquired a controlling stake in PGG Wrightson, a company founded in 1841 that is currently: 1) The world's largest seeds producer in the Southern Hemisphere. 2) The world's largest seller of crossbred wool. 3) New Zealand's largest seller of lamb/sheep, dairy livestock, and cattle. 4) New Zealand's largest agricultural Real Estate broker. 5) The owner/operator of 100 rural supply stores serving farmers across all of New Zealand.
PGG Wrightson is publicly traded on the NZX in New Zealand under the symbol PGW.NZ, and it has been exploding in recent days, finishing trading last night at a new 11 month high of NZ$0.44. GRO's Agria Asia subsidiary owns 379.07mm PGW shares or 50.22% of the company. These shares have a market value of NZ$166.79mm or USD$138.44 mm. GRO owns 80.81% of Agria Asia, valuing its PGW stake at NZ$111.87mm. With 55.38mm O/S, GRO's PGW interest is now worth $2.02 per share, 40% above its current share price.
Yahoo lists GRO as having $167mm in debt and $42mm in cash, but these figures are WRONG. Excluding the debt of PGW, GRO's debt is only $85.1mm. Including GRO's restricted cash set aside for debt repayment, GRO has $76.8mm in cash. GRO's net debt is only $8.3mm. GRO will explode to $2+ soon, with PGW releasing earnings Feb 25 and its EPS in 2014 expected to double. We so far have bought 550,000 GRO shares and don't intend to sell until GRO is trading where it belongs.
I have been looking for an AG stock to buy, hate the risk in some of the small operations in foreign countries. I trust New Zealand. Going on my watch list for a LOOK SEE, but it's almost a penny stock? Ag business in New Zealand, Australia have very good potential for feeding the world.....thanks for the tip.