Why Warren Buffett is Loading Up on This Agricultural Giant

During the course of 2012, investing in agricultural stocks proved to be tricky. One of the nation's worst droughts on record up-ended the business model of so many companies as crops wilted and cattle were brought to premature slaughter.

 

Yet there were a few beneficiaries of the drought.

Back in July, I suggested that Bunge (NYSE: BG) and Ingredion (Nasdaq: INGR) would prosper, and in that time, they've scored gains of 22% and 42% respectively.

Back then, I looked at another major agricultural play, but sensed that it was too soon -- perhaps the back half of 2013 and into 2014 was the time to really focus on this company, I thought.

Warren Buffett has other ideas. He's already loading up on shares of Archer Daniels Midland (NYSE: ADM), acquiring 6 million shares in the fourth quarter of 2012 at an average price of $27.

Shares have risen a bit further since, and show signs of breaking out of a longstanding trading range.

Though the turnaround for Archer Daniels is several quarters away, Buffett and others have begun buying now. (more)

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