Agricultural development is one of the most powerful tools to end extreme poverty, boost shared prosperity, and feed a projected 10 billion people by 2050. Growth in the agriculture sector is two to four times more effective in raising incomes among the poorest compared to other sectors.
I think agriculture stocks Bunge Global SA (BG), Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY), and MariMed Inc. (MRMD) might be worth keeping track of this year.
The world’s population is growing and is expected to reach 10 billion by 2050. An increase in the population creates more demand for food. According to the World Bank, the anticipated surge in global food demand is driven by the need to feed a projected global population of 9.70 billion by the year 2050.
Moreover, according to the MarkNtel Advisors research report, the global Augmented reality in agriculture Market is estimated to grow at a CAGR of 50.2% until 2029.
It owes to the rapidly increasing population, raising the pressure on the food supply and investment globally to elevate agriculture to bring the most out of the farming industry. The use of AR technology in agriculture is expected to facilitate the farmers to decrease crop wastage & increase production at a robust pace.
Furthermore, growing inclination of the worldwide population toward consuming a protein-rich diet is consequently increasing the adoption of cutting-edge technologies such as the IoT, machine learning, AI by aquaculture farm owners. The global smart agriculture market is expected to grow at a CAGR of 9.4% until 2028.
With these favorable trends in mind, let's delve into the fundamentals of the three Agriculture stocks.
Stock #3: Bunge Global SA (BG)
BG is a global agribusiness and food company with operations in various sectors. It offers agricultural commodity products, oils, fats, sugar, ethanol, and corn milling products, organized into four segments: Agribusiness; Refined and Specialty Oils; Milling; and Sugar and Bioenergy.
On November 15, BG and Musim Mas Group announced a collaboration to promote sustainable practices among smallholder farmers in Sambas, West Kalimantan, Indonesia. Co-funded through 2025, the partnership aims to train over 1,000 independent smallholders in the sustainable production of palm oil.
BG’s forward EV/Sales of 0.31x is 81.3% lower than the 1.68x industry average. Its forward P/S of 0.24x is 79.1% lower than the 1.14x industry average.
In the fiscal third quarter that ended on September 30, 2023, BG’s gross profit increased 17.7% year-over-year to $1.05 billion. Its total segment EBIT grew 2.8% from the year-ago value to $584 million. Its net income increased 1.6% from the prior-year quarter to $389 million.
BG’s revenue and EPS are expected to be $15.36 billion and $2.84 for the fiscal fourth quarter (ended December 2023).
BG gained 7.3% over the past nine months to close its last trading session at $99.16.
BG’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, which translates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
BG has an A grade for Growth and a B in Value. It is ranked #2 out of 23 stocks in the Agriculture industry.
For additional BG’s Momentum, Quality, Stability, and Sentiment ratings, click here.
Stock #2: Cresud Sociedad Anónima, Comercial, Inmobiliaria, Financiera y Agropecuaria (CRESY)
Headquartered in Buenos Aires, Argentina, CRESY is an agricultural company that engages in the production of agricultural commodities in Brazil and other Latin American countries. The company operates through Agricultural Business, and Business Urban Properties and Investments segments.
CRESY’s trailing-12-month EV/sales of 2.88x is 73.9% higher than the 1.66x industry average. Its trailing-12-month P/B of 0.83x is 65.3% lower than the 2.39% industry average.
CRESY’s agricultural business revenue decreased 11.9% year-over-year to ARS36.70 billion ($45.51 million) in the fiscal first quarter that ended September 30, 2023. However, its profit for the period increased 531% year-over-year to ARS78.97 billion ($97.21 million). Its EPS increased 392.7% year-over-year to ARS58.88.
CRESY’s shares have gained 41.6% over the past three months but declined marginally over the past month to close the last trading session at $9.09.
The stock has an overall C rating, equating to a Neutral in our proprietary rating system. CRESY also has a C grade for Value, Stability, Quality, Sentiment, and Growth. It is ranked #8 in the same industry.
To see additional POWR Ratings for Momentum, click here.
Stock #1: MariMed Inc. (MRMD)
MRMD engages in cultivation, production, and dispensing of medicinal and recreational cannabis in the United States and internationally.
On December 4, 2023, MRMD announced it had begun manufacturing and processing cannabis products in its new processing kitchen in Mt. Vernon, Illinois.
In terms of forward P/S, MRMD’s 0.71x is 82.1% lower than the 3.39x industry average. Its 6.55x forward EV/EBITDA is 50.9% lower than the 13.33x industry average.
MRMD’s revenue for the third quarter ended September 30, 2023, increased 14.5% year-over-year to $38.80 billion. However, its non-GAAP EBITDA decreased 29.1% year-over-year to $6.10 million. Its non-GAAP net loss came in at $4.30 compared to a income of $2.70 million in the previous-year quarter.
The stock has gained 2.9% intraday but declined 26.2% over the past three months to close the last trading session at $0.29.
It’s no surprise that MRMD has an overall rating of C, which translates to a Neutral in our POWR Ratings system. MRMD also has a C grade for Value, Stability, and Quality. It is ranked #9 in the same industry.
Beyond what is stated above, we’ve also rated MRMD for Momentum, Sentiment, and Growth. Get all MRMD ratings here.
What To Do Next?
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BG shares were trading at $96.80 per share on Tuesday afternoon, down $2.36 (-2.38%). Year-to-date, BG has declined -4.11%, versus a -0.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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