8 Worst Small Cap Agriculture Stocks to Buy

4. AGCO Corporation (NYSE:AGCO)

Number of Hedge Fund Holders: 16

% of Short Float: 7.27%

AGCO Corporation (NYSE:AGCO) is a global manufacturer and distributor of agricultural equipment, including tractors, grain storage solutions, harvesting equipment, and precision agriculture technologies. The company operates in several segments, offering machinery for large-scale farming, specialist agriculture, and livestock operations.

AGCO Corporation (NYSE:AGCO) reported a 24% loss in sales for the fourth quarter that ended December 31, 2024, compared to the fourth quarter of 2023, while revenue for the entire year of 2024 fell 19% year-on-year. The adjusted operating margin was 8.9% for the year, with adjusted EPS falling to $7.50. North American operating income fell by about $77 million, while operating margins shrank by 830 basis points. Furthermore, the company experienced pricing pressure, with a 1% price decrease in Q4, and generated $297 million in free cash flow, roughly $288 million less than in 2023. AGCO also recorded a $350 million goodwill impairment for its PTx Trimble joint venture, which impacted financials.

Despite industry constraints, AGCO Corporation (NYSE:AGCO) made strategic actions, such as divesting its Grain & Protein division and launching its TTX precision technology brand. It increased its PTx Trimble dealer network to over 1,000 while maintaining collaborations with more than 100 OEMs. The company also continued to streamline dealer inventory, whereas surplus stock remained a concern going into 2025.

Looking ahead, AGCO Corporation (NYSE:AGCO) forecasts Q1 2025 to be its lowest quarter, with sales expected to fall by about 32% year-on-year. Production reduction remains a top priority, with output expected to fall 35-40% from Q1 2024 levels. Furthermore, the company faces increasing challenges from a higher projected tax rate of 35-38% and foreign currency opposition, which is likely to cut revenues by $300 million. These hurdles, combined with diminishing profitability and continuing inventory issues, have encouraged short-selling activity, putting it among the worst agriculture stocks.