Many people believe gold is the best hedge against a collapsing U.S. dollar, but one currency has outperformed gold over the last 5 years - the New Zealand Dollar. Multiple reports out over the past week indicate that the New Zealand economy will enjoy "Rock Star" status in 2014 as the fastest growing in the world, while other brand new reports project the New Zealand dollar to reach parity with the Australian dollar this year - due to New Zealand's booming agriculture sector!
For U.S. investors, there are two ways to capitalize: If you have access to overseas NZX trading, PGG Wrightson (NZX: PGW) is New Zealand's most iconic agriculture company. It has been around for 160 years and currently has over NZ$1 billion in revenues with 16.5% of New Zealand farmers buying their supplies from PGW's 100 rural supply stores located across the nation. PGW is trading at a 7-week high of $0.42 and paid a dividend last year of $0.032 for a yield of 7.6%. Their 2014 EPS is expected to increase by 100% to $0.04 for a P/E of just over 10, and their dividend could rise to $0.04 for a yield of 9.5%.
If you don't have access to the NZX, Agria (NYSE: GRO) owns a controlling stake in PGW. In fact, PGW's Chairman Alan Lai actually doesn't actually own any PGW shares, but instead owns 45% of GRO's shares outstanding. GRO is currently only $1.47 per share when its PGW shares have a current market value of $1.95 per share or 33% above its current share price! With PGW's EPS expected to double in fiscal 2014 and their first half results being released February 25th, look for GRO to begin exploding towards $2 in the upcoming days. We own 550,000 GRO shares but don't intend to sell until after it rises substantially higher.