Anyone that follows renowned investor Jim Rogers has heard him say forget the MBA and become a farmer. This is because he believes that food will be in short supply and prices will go much higher. He also thinks you should move to Asia as that is where the money will be made over the next hundred years. He is probably right on both, but for most people, just dropping everything to become a farmer is about as easy as moving the family to Singapore. So can you buy stocks that generate most of their revenues from the farmland they own? Well, it is not easy, but below are a few companies that do.
Limoneira Company (LMNR) is one of the largest citrus growers in California and one of the largest growers of lemons in the United States. As you might have guessed, the lemon crop supplies the bulk of the agribusiness revenue followed by avocados and oranges. The avocado business can cause some large swings in the company's annual revenues as avocados only produce a large crop every other year. When doing your due diligence, make sure you understand if it is a big crop or small crop year for the avocado business. For instance, revenue from avocados was 75% lower in fiscal year 2009 when compared to 2010. Since this is the second largest crop, it is material. (more)
No comments:
Post a Comment