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Small Agriculture Names You Should Know

In 2005, Calavo and Limoneira executed a cross-equity agreement, in which Calavo acquired a 15.1% stake in Limoneira, and Limoneira became Calavo's second largest shareholder with a 6.9% stake. They continue to hold ownership interests in each other to this day, although Limoneira has somewhat reduced its stake in Calavo over the years.

Other than its stake in Limoneira, Calavo may not be much of an asset play, but it has been putting up some decent numbers. Yesterday, the company announced fourth quarter earnings of 42 cents per share, which exceeded consensus estimates by two cents. Calavo currently trades for about 25 times trailing earnings and 16 times 2013 consensus estimates. The company also yields 2.6%, and its annual dividend, currently at 65 cents per share, has been growing; more than tripling over the past ten years.

I've got to admit I am not a big fan of avocados, but that seems to put me in the minority; certainly in our household. I'd venture to say however, that many investors were unaware that they could actually get investment exposure to the strange, green fruit. At least I think it's a fruit.....

I'll explore additional small agriculture plays in future columns.

At the time of publication the author is long LMNR.

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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