10 Worst Farmland and Agriculture Stocks to Buy According to Short Sellers

2. AGCO Corporation (NYSE:AGCO)

Number of Hedge Funds: 16

Short % of Float: 8.01%

AGCO Corporation (NYSE:AGCO) globally distributes, manufactures, and designs agricultural machinery and precision ag technology. Operating through brands like Fendt, Massey Ferguson, and Valtra, the company offers a diverse portfolio of tractors, grain storage systems, precision farming solutions, and seed processing equipment.

Looking at the financials, AGCO’s adjusted operation margin stood at 8.9%, while adjusted EPS was $7.50 in 2024. The tractor and equipment sales were globally impacted when the agricultural machinery sector witnessed its worst downturn since 2009. Despite this, highlighting the company’s ongoing transformation efforts and cost-management strategies, AGCO delivered a relatively strong margin performance.

Additionally, AGCO Corporation’s (NYSE:AGCO) newly established supply agreement with SDF aims to strengthen its low-mid horsepower tractor portfolio under the Massey Ferguson brand, which sets a significant milestone for the company. Expected to launch around mid-year, the company announced in early 2025 that this partnership will allow SDF to produce proprietary tractors of up to 85 horsepower. Aligning with the company’s Farmer-First approach, this step is set to improve AGCO’s presence in the segment and enhance market share.

By leveraging its PTx Trimble joint venture, AGCO Corporation (NYSE:AGCO) has set a goal to achieve $2 billion in Ag sales by 2029. However, elevated dealer inventories and continued product cuts persist, along with other near-term challenges. To decrease surplus inventory, the company intends to underproduce retail demand in the first half of 2025. Furthermore, the company anticipates a slight decrease in capital expenditures to $375 million and an increased tax rate of 35%-38% in 2025.

Despite industry-wide challenges and boosted short-selling activity, the share of AGCO Corporation (NYSE:AGCO) has risen 6.2% year-to-date, reflecting the company’s resilience amid the challenging environment. However, concerns have been raised about its near-term profitability due to weak demand and ongoing inventory corrections, which places it among the worst farmland and agriculture stocks to buy according to short sellers.