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Zecco.com » General Investing » Screening & Picking » Agriculture Stocks
Last post 07-04-2008, 11:26 AM by Artura. 6 replies.
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  •  07-03-2008, 5:28 PM 32958

    Agriculture Stocks

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    Recently I have bought some agriculture stocks and they have been hit hard (AGU, CF, SYT).  Anybody have a clue why... And should I stick with them?  To me, they seem like they should continue to do well, but the stock market obviously thinks otherwise. I trust that when the earnings are announced the stocks will begin to rise but I am starting to worry a bit. Advice anyone?

  •  07-03-2008, 6:03 PM 32962 in reply to 32958

    Re: Agriculture Stocks

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    I think the names were hit hard cause everything got hit, and the things that get hit the hardest are the ones that run up the fastest.  The Ag sector has had some great returns but it is also a speculative play.  Here is a decent article to look at: http://www.fool.com/investing/general/2008/06/30/will-the-agriculture-sector-bust.aspx.  I was thinking about getting into the Ag thing, but I am already in solar which is another speculative play.  I think a good way to get in on Ag without a pure play is Dupont or Dow Chemical (which I own), you get some exposure, a nice dividend, and low volatility.  Good luck with your Ag plays.

  •  07-03-2008, 8:40 PM 32972 in reply to 32962

    Re: Agriculture Stocks

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    I have followed AGU, MON, MOS, POT, and IPI since Dec. '07.  I have made a lot of money on AGU and IPI.  The thing that I have noticed is that they are all good companies, and their products are in huge demand (think China, India, North America).  These companies have all taken nice pullbacks.  I remember when I first bought AGU, it was at $72.  I went down to $50.  I bought more, bringing my average price to $60, and sold at $74.  I just purchased 245 shares of IPI today.  Don't think these are good companies?  Look at their balance sheets and income statements.  Don't think Ag is still a play for another year?  Think high corn prices, inflation fears, midwest flooding, huge demand across the world (think even more about pestilence, famine, drought, etc.)  Stick with these companies for a little bit longer.

  •  07-03-2008, 8:44 PM 32973 in reply to 32972

    Re: Agriculture Stocks

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    Don't forget the evil ethanol mandate.  When 30% of our corn is used to produce 3% of our fuel it means we still need to grow more and more food for consumption.  This means more seed, more fertilizers, more pesticides, more machinery (DE).  Ag is the way to go.

  •  07-03-2008, 10:10 PM 32977 in reply to 32958

    Re: Agriculture Stocks

    Reply Quote
    slacount10:

    Recently I have bought some agriculture stocks and they have been hit hard (AGU, CF, SYT).  Anybody have a clue why... And should I stick with them?  To me, they seem like they should continue to do well, but the stock market obviously thinks otherwise. I trust that when the earnings are announced the stocks will begin to rise but I am starting to worry a bit. Advice anyone?

     

    All three of those are basically in the same sector. You might want to think about diversifying. Especially AGU and CF, they are both fertilizer companies. SYT isn’t much different.

     

    Beyond that, with fuel prices so high, everything using fuel will have a harder time making money.

     

    If your looking at the AG market itself, you might want to consider a commodity ETF like “iShares S&P GSCI Commodity-Indexed (ETF).” Although, commodity prices may be due for a pullback themselves.

     

     

     

  •  07-04-2008, 10:11 AM 32995 in reply to 32977

    Re: Agriculture Stocks

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    Sal, I understand that I am not very diversified, but that is because I am using my portfolio as a focused fund basically.  I really thought that AG stocks were the way to go, and I still do. I want to own many AG stocks so I can make as much money off of it as I can.  But I also own some other stocks.  RIMM, MTL, XTO, FLS. 

  •  07-04-2008, 11:26 AM 32999 in reply to 32958

    Re: Agriculture Stocks

    Reply Quote
    Most commodities have had this pull back (you should see my coal and steel stocks . . . ouch! )  I have been waiting for this to buy back into the ag stocks and double down on what stocks I could not unload before pull back.  Demand and the global story on ag is real.  Remember that just as a profit is unrealized unless you take it, so is a loss.  If you believe the story and are comfortable with your research then buy more and hang on.
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