12 Best Ethanol Stocks to Buy According to Hedge Funds

7. Adecoagro S.A. (NYSE:AGRO)

Number of Hedge Fund Investors: 17

Adecoagro S.A. (NYSE:AGRO) is a leading South American agricultural company. Its operations include the production of energy, sugar, ethanol, land transformation, dairy operations, and the cultivation of crops and other agricultural products. The business is divided into three segments: Land Transformation, Sugar, Ethanol and Energy, and Farming. In the Ethanol and Energy segment, sugarcane is grown and then processed in owned sugar mills to produce ethanol. The stock is up by more than 15% YTD, making it among the best ethanol stocks.

The goal of Adecoagro S.A. (NYSE:AGRO) is to maximize the production of Hydrous Ethanol, a blend of ethanol and water used in automobiles and for industrial uses. The firm has been aggressively growing its capacity to produce ethanol. The company’s strategic focus on Hydrous Ethanol is fueled by higher margins and an increasing preference for this product over other types of ethanol.

Adecoagro S.A. (NYSE:AGRO)’s revenue jumped 41.8% year over year in Q4 2024 due to record-breaking sugar production, which produced 832,000 tons of sugar with a 52.2% sugar mix and set a new crushing record. The dairy and rice industries also performed well due to stronger yields and higher selling prices. Without affecting debt or expansion plans, shareholder returns rose dramatically in 2024, with $102 million distributed, which was $32 million more than the distribution policy. A further indication of better operational efficiency was the cash costs, which decreased to 12.7 cents per pound of sugar equivalent, an 8% decrease from the previous year.

The market forecast for ethanol is still attractive because of the advantageous pump parity compared to gasoline, which creates an appealing price environment and strong demand.