Expiration of corn ethanol subsidy and ethanol import tarrif
The popular conception of AGRO seems to be that it is a play on farming in Brazil and Argentina. The company is so much more. With the lion share of recurring EBITDA coming from sugarcane crushing, and the Company's significant ongoing investment to more than double crushing capacity in Brazil, this stock is mostly a play on sugarcane ethanol. Yes, the farm and crop business produces healthy cash flow as well as inflation hedge, and yes, the land transformation business has benefited from rising farmland prices in the company's key markets. But look at the financials and the significance of its investment in sugarcane crushing capacity and you'll realize how misunderstood this company truly is. The US congress allowing the corn ethanol subsidy and the ethanol import tarrif to expire is a major boon for the Brazilian sugarcane ethanol industry and therefore AGRO. The long term value of AGRO is meaningful no matter the markets conception of the name, but it is most significant when properly understood.
Merrill Lynch updated its AGRO rating in April- Target $14.
Most likely reason for the selloff a breaking of support of $8.60--this fascist, narcissistic nutjob of a President in Argentina. Invite private capital in to overcome national incompeteny, then steal it from those private investors.
Argentina deserves its fate and should never get the first dime of a 'bailout' from other nations until the Bolshevik thieves are voted out.
Kirchner is a real 'woman of the people' -it is said she never wears the same dress twice.
In 2008 Kirchner wanted to raise the export tax on Ag products from 35 to 50%. The farmers almost started a revolution. The measure failed by one vote.
Watch out for this self absorbed witch- she will destroy the Argentinan economy.
And when you add the expiration of tariffs to the new certification of Adecoagro's sugar, ethanol and energy production it all adds up to much improved earnings on 8/1. With the ongoing crop crisis ballooning in the US, forward guidance should be stellar. I'm buying every dip (below 9.50)....
aikido---first buy in AGRO today. Keep the board posted on changes in anticipated cash flow and other fundamental developments. The big question is this --where will the growth come from if acreage stays flat.
Be specific on developments and profit margin in the sugar cane processing for ethanol. Also what are the risks of AGRO being foreign owned, i.e, what are the odds AGRO will suffer if Brazil and Argentina favor companies based in the home country.