8 Best Small Cap Agriculture Stocks to Buy

3. Adecoagro (NYSE:AGRO)  

Number of Hedge Fund Holders: 16

Market Capitalization as of August 9: $1.07 Billion  

Adecoagro (NYSE:AGRO) is a Brazilian agriculture company engaged in dairy operations and the production of food products such as rice and sugar among various other crops. The company owns and operates commercial farms in Argentina, Brazil, and Uruguay. Adecoagro (NYSE:AGRO) also has stakes in ethanol and renewable energy. The company is valued at $1.07 billion as of August 9.

Adecoagro (NYSE:AGRO) plans to increase its farmland through a combination of organic growth, leasing, and strategic acquisitions. The South American agriculture market is projected to expand at an annual rate of 6.3%, reaching $376 billion by 2028. This growth, coupled with an increase in farmland, is expected to enable Adecoagro (NYSE:AGRO) to achieve higher crop yields in the coming years. Additionally, the wetter-than-usual conditions in the South and warmer and drier conditions in the North have improved soil moisture across South America, further enhancing the company’s ability to maximize crop yields.

AGRO also holds a significant competitive advantage by operating one of the most efficient sugar production facilities in Brazil and globally. With the average price of sugar expected to rise by 2.2% to $0.46 per kilogram by this year, Adecoagro (NYSE:AGRO) is well-positioned to capitalize on increased sugar revenue. The company’s sugar production is in excellent condition, boasting a 30% higher total recoverable sugar content. These factors combined suggest that Adecoagro (NYSE:AGRO) is poised for strong financial performance, making it an attractive investment opportunity.

Adecoagro’s (NYSE:AGRO) stock is trading at a forward PE of 5.47, a 68.54% discount to its sector, and analysts expect the company’s earnings to grow by 11.6% this year. Industry analysts have a consensus on the stock’s Buy rating, setting an average share price target at $13.92, which represents a 30% upside potential from its current level. As of the first quarter, the stock is held by 16 hedge funds and the stakes amount to $166.77 million. Route One Investment Company is the largest shareholder in the company with stocks worth $127.97 million as of March 31.