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Reaping Rewards in Agriculture
CNBC.com | July 02, 2008 | 09:26 AM EDT

With soft commodity prices at record highs, is it time to invest in the sector?

Agriculture stocks are still good long-term investments, but investors should be wary of the short term, as a correction for the sector may be due, according to Alexis Dawance, fund manager at Global-Cap.

Dawance prefers smaller companies to large-cap companies like Potash [ POT 121.16  -1.72 (-1.40%) ] and Mosaic [ MOS 58.42  -1.14 (-1.91%) ] as they have had a "tremendous ride," making shares are "pretty expensive" currently.

"We fear that these names are over-owned, therefore we prefer smaller companies who have bought some land and are doing some exploration," Dawance told "Power Lunch Europe".

Bunge [ BG 62.01  +0.02 (+0.03%) ] is one stock Dawance likes.

It is one of the oldest grain traders in the world and was and recently acquired the international sugar trading and marketing division from Britain's Tate & Lyle, as well as buying Corn Product International [ CPO 34.37  +0.04 (+0.12%) ] , which puts it in a good position, according to Dawance.

"They have capable abilities to source the commodity, to move it, to process it. They are really a true global company and the valuation is not demanding."

Chicken producer Pilgrims Pride (PPC) [ PPC 10.61  +0.17 (+1.63%) ] is another investment opportunity, according to Dawance.

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