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Investing, Indirectly, in Real Estate

First, there is risk in owning Argentine names, especially considering that country's recent move to seize control of YPF Sociedad Anonima (YPF), the nation's largest oil-and-gas company, from Spain's Repsol (REPYY). Argentina was already a challenging economic environment without a government willing to seize businesses. This only heightened the risk.

Second, and less concerning, the company does have a decent amount of debt, in my view anyway, of about $570 million.

Of course, Cresud was hit hard in the spring, primarily due to fears of nationalization. Shares fell from about $13 in late March to below $7 in June.

While I was initially very concerned about the business environment in Argentina at that time, Cresud shares at $7 and below were simply too good to pass up, for me anyway. I had owned Cresud previously, but closed my position in the $19 range in late 2010. This was a chance to re-enter the name on the "cheap," knowing the risks.

I also own a few domestic agriculture names, although these are even smaller than Cresud. They include Limoneira (LMNR - Get Report), which left the pink sheets to list on NASDAQ in 2010 and is California's largest provider of citrus and avacados.

I also own Alico (ALCO - Get Report), which owns about 140,000 acres in central and southwest Florida and produces citrus and sugarcane and also does some cattle ranching.

LMNR Chart LMNR data by YCharts

ALCO Chart ALCO data by YCharts

Neither is as exciting as Cresud, but not all investors enjoy that kind of excitement.

At the time of publication, the author was long CRESY, LMNR and ALCO.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Jonathan Heller, CFA, is president of KEJ Financial Advisors, his fee-only financial planning company. Jon spent 17 years at Bloomberg Financial Markets in various roles, from 1989 until 2005. He ran Bloomberg's Equity Fundamental Research Department from 1994 until 1998, when he assumed responsibility for Bloomberg's Equity Data Research Department. In 2001, he joined Bloomberg's Publishing group as senior markets editor and writer for Bloomberg Personal Finance Magazine, and an associate editor and contributor for Bloomberg Markets Magazine. In 2005, he joined SEI Investments as director of investment communications within SEI's Investment Management Unit.

Jon is also the founder of the Cheap Stocks Web site, a site dedicated to deep-value investing. He has an undergraduate degree from Grove City College and an MBA from Rider University, where he has also served on the adjunct faculty; he is also a CFA charter holder.
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REPYY $9.93 0.00%
ALCO $22.81 0.00%
CRESY $10.19 0.00%
LMNR $11.93 0.00%
RT $4.72 0.00%


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